Offshore investing and international banking is only for the rich, as a vista of flexible diversification opportunities are now available for all local investors.
This is according to head of Offshore Services for Standard Bank Wealth International, Michael Nudlbichler, who said that the building blocks towards an international banking and investing solution need to be put in place early to ensure a slice of money or assets are housed safely offshore in a trusted jurisdiction.
From diverse “seafarer” accounts for students leaving school and working on a yacht sailing the seven seas for a few years, to older professionals realising they don’t have enough money offshore – recent advances are opening the door to user-friendly international banking and investing solutions, he said.
“The reasons for taking money offshore will vary per individual,” said Nudlbichler.
“For instance, someone may not have assets but is earning a decent salary and wants to travel overseas at a certain future date. Their planning for this goal would need to start today to ensure they have the money and transactional capability to do this.
“The more important reason to go offshore, of course, is to reduce risk by diversifying savings, and essentially about retiring wisely. It is simply too risky to only rely on a few local stocks in a portfolio to secure a happy retirement. One uncertain market event and you will be left picking up the pieces and not being able to retire comfortably – if at all,” said Nudlbichler.
However he noted that South Africans are still more prone to spending than saving.
“Ideally, we need to see a culture shift when it comes to saving. It should become quite normal to save 15-20% of what you make and then not touch it. This just goes towards savings and within that, would be the perfect mix of local and offshore to suit the needs of the individual or family,” said Nudlbichler.
However rand weakness is not a reason to rush offshore, said Nudlbichler.
“You see this time and time again – the rand falls out of bed and suddenly people want to rush offshore. That is purely a knee-jerk response as you will never be able to predict the path of a currency – though the rand has tended to weaken over time.
“The reasons to invest or purchase assets or set up a trust offshore are far more diverse and long-term in nature – but ultimately they relate to ensuring you retire wisely and can meet a long-term financial goal,” he said.
Instead he outlined seven of the questions you should be asking to determine if you need to adopt an international banking solution:
1.Do you spend a lot of time working or traveling abroad?
2.Do you receive income in multiple currencies and would like to access this from one central place?
3.Do you invest in multiple currencies across different countries?
4.Do you want to send money to your family who live abroad?
5.Do you want to diversify your savings to protect yourself from currency fluctuations?
6.Do you want to be able to make payments in multiple currencies?
7.Do you want a simple solution to managing your finances that it is accessible 24/7?
“Our universal banking approach and reach overseas enables quick access to international banking solutions, while our goals-driven investment approach allows you to take a long-term view of your investments, while simultaneously meeting your short-term lifestyle needs.
“As mentioned, this overall plan has to include offshore investing as a key component, or else future financial outcomes will be placed in severe jeopardy,” said Nudlbichler.