What should I expect from my financial planner?
Question:
I have lived in Israel for the last 6 years, but still want to keep some of my investments abroad. What should I expect from the financial professionals that are helping me with my international investments?
Cautious Investor
Sent (September 1, 2007)
Answer:
By: ACL
Dear Cautious Investor,
Your question is very relevant, especially as it is difficult to deal with the Israeli laws that change constantly. In addition, there are overseas issues that need compliance, such as the international anti-money laundering requirements and the US Patriot Act.
The following points should be considered when choosing an investment & financial professional to assist you with your overseas investments:
- You relate well to that person, and trust him/her.
- That person is professionally qualified for the task.
- That person is licensed in order to provide the appropriate advice and thus be able to supply 1st grade investment products. In this regard, since you are living in Israel, the investment professional would need to hold a license from the Israel Securities Authority.
- That person is only working with reputable financial institutions.
- That person performs a thorough needs analysis, which would take into account your personal circumstances, your family circumstances & your financial circumstances.
- That person performs a risk profile analysis, assessing your personal risk profile.
- That person issues you a written investment proposal, based on the results of the needs analysis and the risk profile performed.
- The investment proposal should be appropriately diversified, in terms of asset allocation, currency allocation and country allocation. This will help to reduce the overall investment risk of your proposed investment strategy.
- The investment proposal should take into account the Israeli & overseas tax ramifications of any proposed investment strategy. Failure to do so, can result in material tax liabilities in the future.
- The investment proposal should take into account estate planning issues & inheritance tax issues, as they would apply to your particular circumstances.
- The investment vehicle recommended should be easy to manage. This is very important as Israel is far from the world investment markets, and there are very often time-zone differences, which make communication difficult.
- That person is available in the future to help you monitor the proposed investment strategy, and implement changes as they are needed
If your current financial professionals do not meet all these criteria, you need to ask yourself why not?