Living in Singapore as an expat can come with its own set of financial challenges that are not applicable to locals. From various tax considerations, to dealing with foreign exchange rates, it’s often quite challenging for expats to ‘DIY’ their financial planning. Therefore, it’s important to find a financial planner, or advisor, that has experience with clients that also have these niche issues. Here’s a few things to look out for when you choose a financial advisor:

1. Their qualifications & regulations

This is not just applicable for expats, but for anyone seeking financial advice in Singapore. Financial advisors need to be licensed and regulated by the Monetary Authority of Singapore (MAS) to legally give advice, and the investments & products they are selling should be regulated by MAS, too. Even offshore investments in Singapore must follow these regulations; if they are not, you run the risk of not being legally protected should anything go wrong.

2. Their independence & ties

There are two types of advisors in Singapore- independant & tied. If someone is independent, it means that, even though they probably work for a specific firm or financial institution, they are able to recommend various investments, insurance etc. from many companies. A tied advisor can only recommend products from the financial institution or insurance company they work for. I started off my journey as a Private Wealth Manager being tied to a local firm, and I found that this limited my ability to help my clients, particularly expats. Now that I work as an IFA (independent financial advisor), I find that I am able to help expat clients a lot more, as various investments will have different tax considerations, and certain insurance products may be better for expats from certain countries, whilst others are not. It’s totally up to you whether you work with a tied or independent advisor, but I do think that planning can be limited if you are only able to have investments from one company.

3. Their experience with working with expats

Look for a financial advisor who has experience working with expats in Singapore, and who understands the unique financial considerations that come with living abroad. Many local advisors or those who solely work with locals, will not be aware of capital gains tax considerations when an expat repatriates, and a surprise tax bill can be detrimental to investment planning. Retirement planning for expats can be complicated due to factors such as differing retirement ages, pension eligibility, and social security contributions. Advisors that have little experience working with expats may not be familiar with these specific considerations and how they can impact an expat client’s retirement goals. For example, I am able to assist my clients who are British or have worked in the UK, with their retirement planning and pensions. The same goes with Australians, as we have investments that are tax-efficient in these countries, and have tax experts on-hand to advise on this portion of their financial planning. Generally, if you are an expat, it’s good to work with an advisor who will be able to understand your unique situation & goals. You can always ask the advisor what kind of clients they work with, or if they have any case studies to share on clients in similar situations as you.

4. Discuss fees and charges upfront

Generally, in Singapore, fee-based advice is not very common. Whilst this is usual in western countries, in Singapore most advisors are paid either a commission, or an on-going fee, let’s discuss the slight differences between the two:

• Commissions are paid to the advisor usually upfront, either when you buy an insurance product or an investment. This cost is factored into the premiums that you are paying, along with the company the advisor works for paying a chunk, too. Because these commissions are generally upfront, you may see that the charges are very large in the first couple of years. Due to this, if you are buying a product, be it investment or insurance, that does not require a lot of transactions, you may not always get the same level of service as you did at the start.
• On-going fees are usually a percentage of the advisors funds under management. They will get a % on whatever monies their clients have entrusted with them. Because these fees are on-going, there is an obligation by the advisor to give you on-going advice and service. This generally tends to lead to a synergy in yours & advisors interest, because as your money grows, so does their pay!

A couple more fees to look out for are transaction and trailer fees; these fees are normally triggered when you buy or sell out of a fund or investment, or switch your portfolio, and a % is paid to the advisor. It is key to be aware of all fees and charges and that your advisor is transparent.

This means that you could have many meetings with your advisor before they actually receive their pay, so do consider if this is the route you would like to go down.

5. Their personality

To me, this may be one of the most important points; you are going to be working with this person for a very long time, therefore it’s best to choose someone that you feel understands and listens to you. As an expat, you may have specific financial goals or concerns that you need help addressing. Make sure the financial advisor you choose communicates clearly and is responsive to your needs. If you are someone who is a novice in investing, you may not like talking about all the ‘buzz words’ of investing, and would appreciate someone communicating to you in an easy-to-understand way. On the flip-side, if you are a bit more knowledgeable and would like investments in specific areas, it’s good to find an advisor that can discuss and educate you on these topics, along with giving their professional opinion.

To conclude, many may think that there isn’t a need for talking to an advisor; they’d rather watch YouTube videos, or talk to their friends and family about finances. But a financial planner should be giving their professional, unbiased opinion. They will be able to objectively look at your goals and financial situation objectively, and construct a clear plan bespoke to you. Always remember that being an expat comes with its own unique situations, and you should look for an advisor that understands that.