Financial advisor for off shore investments

[Brenden_E]

First a bit of context on why this is a challenging prospect for myself.

I know many individuals, my parents included, that were given financial advice that was more beneficial to the advisor in terms of commission, rather than in the best interest of the individual. I also have also been exposed to the internal workings at Old Mutual on how they took an entire generation for a ride, making a fortune while returning much less than they could have. It's all about the money and companies return as little as they can get away with. That's life.

So when it comes to financial advisors I'm skeptical. However, I'm not silly enough to think of myself as a financial expert that can make the best decision all by my lonesome. So where does one find a financial expert that you know will help you to make the best decision for you?

 

[AlphaBravo]

I share your views, I've been a 'victim' of commission driven 'financial advise' as well, Liberty was the underwriter at the time.
I've just taken matters in my own hands, bought Satrix products directly, trade on easy equities and the like. I do believe, even in my own ignorance of the subject, I'm still better off than if I contracted a financial advisor.

 

[Markd]

I think the best thing for you to do is try and educate yourself so that you aren't reliant on someone to tell you what to do. If you don't know anything about the thing you are talking about, it's easy for the seller to take you for a ride, whether its offshore investment, bicycles, lawnmowers or anything else!

Recently Standard Bank gave me a tax free investment account, where I am able to invest up to R30,000 per year in a range of ETF's (Exchange Traded Funds). I started looking at all the options, then doing google searches for 'best performing etf 2018' etc. And what I found was great - a selection of low-cost, passively managed funds that invest in companies in Europe, the US, the UK etc. Some are index trackers. So I've picked a few and I am putting a monthly amount into them to see how they do. This way I am effectively getting that 'offshore' exposure, doing the trades locally, and paying something like R11 per trade.

I'd highly recommend you look at this for yourself, as apparently, very few actively managed funds actually perform better than passive trackers over the longer term (10+ years). Diversify across a number of ETF's to spread your risk a bit (most of the ones I'm looking at are high-risk/high-return) and see how you crack on.

 

[Markd]

I share your views, I've been a 'victim' of commission driven 'financial advise' as well, Liberty was the underwriter at the time.
I've just taken matters in my own hands, bought Satrix products directly, trade on easy equities and the like. I do believe, even in my own ignorance of the subject, I'm still better off than if I contracted a financial advisor.

I've been looking at Liberty purely for Life Cover and Dread Disease cover only. That's essentially insurance though. Investments I handle myself per my other post.

 

[Alton Turner Blackwood]

Most of us just DIY and eliminate "advisors" completely

 

[Brenden_E]

Most of us just DIY and eliminate "advisors" completely

I prefer to DIY myself too in most of everything. But in this specific instance I do feel unequipped to make the best decision. That it's not pocket change also gives the decision significantly more gravitas.

 

[f2wohf]

I’d say start reading a few book and serious blogs about investment, always have a balanced portfolio to mitigate risks and DIY starting slowly with a balanced combination of ETFs.

 

[Markd]

I prefer to DIY myself too in most of everything. But in this specific instance I do feel unequipped to make the best decision. That it's not pocket change also gives the decision significantly more gravitas.

Brendan, a financial advisor is going to ask you about your time horizon, and what you want to do/get with the money you have to invest. Then they show you the funds they have, get you to invest, and charge you a percentage administration fee every year, and maybe some transaction fees.

Now we flip the coin. You want to invest a portion of the money offshore. You find 3/4/5 ETF's and put down some relatively small investments. It costs you next to nothing, and there are no annual fees based on the amount invested. You let those ride for a year, you come back and look at performance, and MAYBE you make some changes, but ideally you just let it ride. You are in control.

When you give it to an advisor you go "here's my money, I guess I pick this and that funds, please dont lose my money". And then you forget about it and hope they dont screw up. And generally they dont, but the question is do they perform better than you would, and the answer is in most cases the difference probably wouldnt be big at all - you'll probably do better. If you're worried start smaller and scale up - you don't have to pop it all at once.

 

[Brenden_E]

Brendan, a financial advisor is going to ask you about your time horizon, and what you want to do/get with the money you have to invest. Then they show you the funds they have, get you to invest, and charge you a percentage administration fee every year, and maybe some transaction fees.

Now we flip the coin. You want to invest a portion of the money offshore. You find 3/4/5 ETF's and put down some relatively small investments. It costs you next to nothing, and there are no annual fees based on the amount invested. You let those ride for a year, you come back and look at performance, and MAYBE you make some changes, but ideally you just let it ride. You are in control.

When you give it to an advisor you go "here's my money, I guess I pick this and that funds, please dont lose my money". And then you forget about it and hope they dont screw up. And generally they dont, but the question is do they perform better than you would, and the answer is in most cases the difference probably wouldnt be big at all - you'll probably do better. If you're worried start smaller and scale up - you don't have to pop it all at once.

It's slightly more complicated. My wife has quit her job, getting paid out and moving overseas. So we have to invest all that money somewhere right now. It's not trivial amounts. Even in a % difference in performance could mean hundreds of thousands.

Unfortunately the timeline doesn't allow me to test the water - we have to hit the ground running. And with such large amounts at stake, I'm sure you can understand my reservations.

 

[f2wohf]

It's slightly more complicated. My wife has quit her job, getting paid out and moving overseas. So we have to invest all that money somewhere right now. It's not trivial amounts. Even in a % difference in performance could mean hundreds of thousands.

Unfortunately the timeline doesn't allow me to test the water - we have to hit the ground running. And with such large amounts at stake, I'm sure you can understand my reservations.

In this case, pay yourself a financial advisor who is not paid through commissions and warrants and is forbidden to take commissions.

Don't buy the products through him to make sure there's no commission and buy it yourself, just tell him to advise you in what to invest.

Double and triple check what he says and proposes before going forward.

It seems to be what these guys do: https://www.ultimafp.co.za/what-we-offer/fee-based-services/

I don't know them, don't use them, nor recommend them but just found them on Google to give you an idea.