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Do You Have a Neglected International Portfolio Bond or Savings Plan?

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This article is brought to you by Infinity Financial Solutions.

FAR TOO OFTEN, I come across expats who set up a portfolio bond (lump sum investment vehicle) or a regular savings program some time ago, yet have no idea how their underlying portfolio is performing, typically with no information forthcoming from the financial adviser who initially set them up.

Obviously, this is a concern. A portfolio needs regular monitoring. Asset classes may need to be rebalanced as they fluctuate away from the desired level of exposure, and adjustments may need to be made in response to an individual’s changing circumstances or to factor in a change in their tolerance to risk. I have often found that many of those with such plans aren’t fully aware of how they are structured and may also have misunderstood the level of flexibility they were once promised.

Savings programs and portfolio bonds can offer huge tax advantages for Brits returning to the UK at a later date, but this obviously only applies if you’ve actually enjoyed growth in the first place! It is imperative that within a portfolio bond you select not only a portfolio that is well-structured, but also invest in funds that can be readily converted to cash, avoiding certain investments that can take several weeks to be sold, by which point the market may have retracted.

UK investors should also be wary of investments such as ‘structured notes’ held within a bond, that may incur punitive tax charges when returning to the UK. Bonds owned since the 2000/2001 tax year may be subject to an anti-avoidance tax of 15% per annum on a ‘deemed gain’ even if in reality there has been none. This may mean an investor is forced to sell at a loss before the structured note maturity date to avoid punitive taxation. If you are concerned, it is best to talk to a professional adviser about how this may affect you.

It is also worth looking into the charging structure of these kinds of investment vehicles, as some apply an ongoing percentage-based fee indefinitely. In cases such as these, it makes sense to look into alternative investment platforms which are potentially more cost-efficient and could help reduce the ‘performance drag’ on your returns.

In 2012, Infinity Solutions appointed the Tilney Group, an award-winning investment company based in Mayfair, London, as our investment partners. This decision was made in response to concerns over questionable levels of regulation here in Southeast Asia and financial advisers constructing portfolios often without having the relevant expertise. Tilney’s credentials speak for themselves – they currently manage in excess of £20 billion in assets and are fully UK regulated – giving us the confidence that our clients’ portfolios are in the best hands. They offer the opportunity to invest in the offshore structures mentioned above with portfolios that are actively managed and daily traded.

If you’d like a review of your current set-up or would like to learn more about Tilney, please feel free to get in touch.

Sam is a UK-qualified Independent Financial Adviser and strives to raise the standards of international financial planning in Malaysia. He has been based in KL since 2009 and represents Infinity Solutions Ltd in partnership with UK-based Wealth Manager – Tilney Group. You may direct any inquiries to [email protected] or call +6017.3499 686

This article was originally published in The Expat magazine (December 2017) which is available online or in print via a free subscription.

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