Advisers must do due diligence for HNWs
If financial planners want to capitalise on the rising proportion of offshore wealth, they must do their due diligence and provide sound advice spanning multiple jurisdictions, according to GlobalData’s HNW Offshore Investment survey.
Despite recent data leaks and scandals like Paradise Papers, the proportion of high net-worth (HNW) individuals who invest offshore has risen from 11.2 per cent in 2014 to 16.9 per cent this year, and they’re seeking new homes for their wealth to achieve benefits from global diversification and gain tax efficiencies along the way.
They survey showed that 24 per cent of European investors offshore the largest proportion of their wealth to achieve tax efficiencies, while 41 per cent of North Americans invest the largest proportion offshore to diversify.
Senior wealth analyst, Heike van den Hoevel, said understanding why HNW investors offshore their wealth was paramount to capitalising on the rising proportion of offshore wealth.
“This means providers have to focus on uncorrelated or less correlated risks when promoting offshore investments to potential clients,” he said.
Van den Hoevel said while demand for tax advice was on the rise, the days of illicit structures have passed, and providers must do the due diligence to avoid reputational and financial damage associated with scandals.
AUTHOR
Anastasia Santoreneos
Recommended for you
Former Iress chief executive, Andrew Walsh, has been promoted to chair of a boutique Sydney advisory firm, having stepped down from the same position at Mason Stevens.
Results are out for the latest sitting of the ASIC financial advice exam, with the pass rate falling for the second consecutive sitting.
Adviser losses for the end of June have come in 143 per cent higher than the same period last year, and bring the total June loss to over 350.
ASIC’s enforcement action is having an active start to the new financial year, banning a former Queensland financial adviser for 10 years in relation to fees for no service conduct.
