A significant number of Indians regularly travel abroad (NRIs) for various opportunities. Their stay abroad varies from short term to long term. Some of them may take Citizenship from another country but still keep the OCI/PIO card to keep their connection with their motherland. For this increasingly mobile community with assets across countries, financial planning, money management and taxation become extremely challenging.
What are the complexities involved?
There are multiple reasons for the complexities
- Management of assets across multiple countries
- Opportunities to build a best-in-class portfolio across geography
- Tax compliance (e.g. FBAR, FATCA and PFIC for US residents) of another country can have a material impact on which asset to own and in which country
- Taxation on Global income for Indian tax residents and other country tax residents (e.g. the US)
- Frequent changes in NRI status require compliance with the Indian FEMA act and Indian Income tax act and corresponding regulations of another country
- Different Tax considerations for qualified Retirement accounts (e.g. 401 K, IRA and Roth in the US and NPS in India) in another country
- Tax filing in two countries with different tax years (e.g. the US follows calendar year whereas India follows April to March) requires additional effort in the gathering different sets of data and application of DTAA for participating country
What is the expectation from the Financial Advisor?
A typical Financial Advisor is expected to design a financial solution that is customized for a single country keeping in mind investment opportunities and taxation in that country.
Since NRIs have the need to manage assets across multiple countries, they need Financial Advisors who understand the nuances of investment opportunities and taxation in multiple countries.
It is also expected that the Financial Advisor help clients in finding solutions for related needs e.g. taxation. While the Adviser himself may not be qualified to provide advice in all relevant areas, he should be able to leverage his ecosystem of partners to recommend the right subject matter experts.
Many of the NRIs move frequently across countries and they need a financial plan which is sustainable during those transitions. Some of the NRIs have a clear plan around their stay in multiple countries and they want to weave a good financial solution around those stays.
In real life, it is very difficult to find such a Financial Advisor who can cater to these complex requirements. But an Advisor who has an appreciation of various investment opportunities in the respective country including Retirement schemes, Tax-advantaged and Tax-deferred schemes will be able to provide a better solution.
Financial Advisors who have significant experience in handling NRI clients should be preferred. The experience in servicing NRIs clients across multiple stages of the life cycle and from various countries adds to the maturity of the offering.
How should you go about finding such a Financial Advisor?
Since financial advice for investment in India is always part of the financial solution for an NRI, the starting point will be to look for a Financial Advisor who is capable of giving good advice for investments in India. SEBI has mandated SEBI Registered Investment Adviser (Investment Adviser) to give financial advice in India. Go through the article How to Select the Best Financial Advisor in India to filter Advisors.
From the list of the filtered Financial Advisors, look for the Advisors who have requisite knowledge and experience in advising clients in the country of residence outside India. An Advisor who himself has been an NRI and is familiar with the nuances of financial planning and investment in other countries will do a better job.
Browse through the digital medium to look for recommendations, people reviews, feedback and testimonials to narrow the list.
Go through the website of the select Financial Advisors to understand their thought processes, biases and operating model to identify the final list.
Talk to each of the Financial Advisors from the final list to evaluate your compatibility with the Advisor and then finalize one. Vetting from a person who has already taken services of the Advisor will give you peace of mind.
We can help
We at FinMyn specialize in servicing NRI clients. In a very short period, we have advised clients across multiple countries. We have the necessary skill and experience to provide the best possible financial solutions.
- I am the only person with whom you will engage during the contract period hence the engagement is high touch with quality deliverables.
- I have done my MBA in Finance from Carlson School of Management, (Minneapolis, USA) which comes in handy in managing international investments across countries.
- I myself was an NRI and have lived a considerable amount of time abroad in multiple countries. I leverage that experience for designing better financial solutions for my clients.
- I keep a limited number of clients for deeper relationships.
- Our engagement model is strategic. We nurture a long-lasting relationship. If you want to move out of the contract and come back, you are more than welcome. Once a client always a client.
- Your google business review about our services is my keepsake which I strive to earn hard.
Note – RIA, SEBI Registered Investment Adviser, Investment Advisor, Financial Advisor, and Financial Planner are used interchangeably in the industry. For ease of use and standardization, the writer has chosen “Financial Advisor”.
The writer is a SEBI Registered Adviser and Founder of FinMyn (https://finmyn.com). He provides Fee-Only Financial Planning and Investment Advisory services.
He has advised many NRI clients based out of the US, Europe, the Middle East, South East Asia and Australia.
To know more about him, click on https://finmyn.com/about/.