Wealth planning needs of internationally mobile clients

  • Describe the growth trends among the high net worth community and their wealth planning needs.
  • List the tax implications for multi-jurisdictional individuals and what they need to know about fund accessibility.
  • Identify what impact regulation will have and the concerns and goals of the next generation of HNWIs.

This includes knowing whether a current structure is recognised in another jurisdiction and how it would be taxed. For example, trusts are not recognised in France despite their wide use in the UK. 

6) Regulation

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The last decade has seen sweeping changes to the regulatory framework, particularly surrounding the financial services world. An example of such change is in the introduction of GDPR, impacting financial services providers and individuals alike.

With added focus on tax and legal reporting, and stricter rules on how personal data is used, stored and processed, data protection will transform how an adviser operates, but will also impact the amount of information available to advisers, and where that information can be used or sent.

Handling regulatory changes – and the pace of change – as an individual is a big task. However, there are some financial solutions that can act like an ‘an umbrella fund’, allowing the investment in different funds with reduced administration to happen one place, under a single asset for the HNWI.

7) Does family come first?

Whether clients are young, married, divorced, with children – or none of the above – knowing who the people that will benefit from their estate are, will allow you, as their adviser, to plan efficiently for the future as the tax implications for different classes of beneficiaries can be stark.

Equally as important is knowing where these individuals are. Many HNW families are spread across countries and continents.

Therefore, cross-border planning and cross-border solutions are key to implementing structures that will follow them across the globe, but also those who will benefit from their estate – and subsequent generations. 

Suggest a financial product that can be used to allocate wealth to particular people as beneficiaries or, as in the UK, put into trust to cater for future generations who may not be born, particularly where trustees have ongoing duties to produce, preserve and manage generational wealth.

8) Identifying concerns and goals

Understanding what is important to your HNWI clients will help identify the solutions matching those needs.

A mobile HNWI might value efficient estate planning, legal and tax compliance, asset protection and growth, reduced reporting and administrative burdens, tax deferral or structured family succession.

As in point one, Generations Y and Z (those aged 18 to 35) tend to think differently about advice, putting value on unique or tailored advice to them and their circumstances.

They want ‘goals based advice’ and frequently insist in understanding, and controlling, the financial advice they receive.

Growing up in the ‘digital revolution,’ this includes advice on demand, anywhere and at any time. As older generations age, these groups will one day make up the largest percentage of HNWIs with the format and audience of advice changing with it.