There are various reasons why people take financial advice; for help investing or with their pension, tax queries, estate planning guidance etc. What many do not realise, however, is that their choice of adviser may be the most important financial decision they need to make.
This is even more important when moving to or living in Portugal, since you need an adviser who can analyse your situation and guide you through all the financial planning steps you need to take to successfully manage your wealth in Portugal. Achieving long-term financial security and peace of mind in a new country with unfamiliar tax and succession regimes is harder than in your home country.
You need a holistic strategic financial plan based on your situation and aims, then ongoing, proactive support as circumstances evolve and regulations and investment climates change.
With all this in mind, here are some points to consider when looking for a financial adviser.
A personal service
Your financial planning should be based on your personal situation – country of residence, plans, family situation, estate planning wishes, time horizon, investment risk tolerance and objectives.
Successful wealth management takes all these into account. Your adviser should get to know you, asking questions and establishing your risk profile before making recommendations or trying to sell you an investment. You want to build a good relationship with your advisory firm, so they’ll be around to support you right through retirement, perhaps guiding your heirs in the future.
Size and longevity
A firm with a history of longevity gives you peace of mind that they are likely to be there as long as you need them.
And the larger the firm, the more specialists they have covering the various services you need – local financial advisers, technical tax experts, pension professionals, investment analysts. In-house teams can seamlessly work together to provide integrated wealth management advice.
This is important. For example, how you hold your investments can impact how much tax you pay and how easily they can be passed onto your chosen heirs. So rather than using different firms and receiving isolated advice, you benefit from a comprehensive, strategic financial plan covering all aspects.
A larger firm will also have more resources to apply effective compliance procedures to ensure regulatory rules are adhered to. It will be in a position to keep on top of changing regulations, such as tax – as we’ve just seen here with the non-habitual residence regime suddenly coming to an end – and pensions, analysing how clients are affected and establishing compliant solutions where necessary.
Local advice and knowledge
Using an adviser who lives and works in Portugal proves highly beneficial.
They have personally experienced living in Portugal and how local taxation impacts residents. They have in-depth understanding of Portugal’s tax and succession regimes and the legitimate planning opportunities.
It is unlikely your UK adviser will know the ins and out of local regulations in Portugal or keep on top of all reforms. Continuing with your UK adviser could result in you buying inappropriate investments, paying more tax than necessary, or your beneficiaries having to deal with unnecessary complications.
Another important issue is regulation. Prior to Brexit, UK advisers and financial firms could ‘passport’ services into EU countries. This has ended, so unless your UK adviser has taken the effort and expense of getting set up and regulated in Portugal, they would not be in a position to provide authorised advice to residents of Portugal.
Regulation and qualifications
Investing, pensions, estate planning and taxation are technical subjects which require specialist understanding. Ensure your advisory firm has professionals with officially recognised qualifications who keep up to date with regulatory changes and maintains high professional standards.
In the UK, for example, the Level 4 Diploma in Regulated Financial Planning meets the UK Financial Conduct Authorities (FCA) qualification requirements. Although you’ve moved abroad, your adviser should still have to achieve a similar level of qualification.
For security and peace of mind, choose a firm which is authorised to provide advice in Portugal and abides by national and international regulations. When investing, check that both your adviser and the investment managers they recommend are regulated.
Once you find an adviser who meets the above requirements, the rest of your financial planning in Portugal should follow smoothly on. You won’t need to worry about neglecting key aspects or keeping up with tax reforms. Your adviser will talk you through all the issues you need to consider, helping you weigh up your options before taking final decisions. They’ll then keep you updated on reforms that impact you.
You can leave the hard work to them, and enjoy your new life in Portugal with peace of mind.
Keep up to date on the financial issues that may affect you on the Blevins Franks news page at www.blevinsfranks.com.
By Adrian Hook
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Adrian Hook is a Partner of Blevins Franks in Portugal and has been providing holistic financial planning advice to UK nationals in the Algarve since 2008. He holds the Diploma for Financial Advisers (DipFA) and is a member of the London Institute of Banking and Finance (LIBF).