With news that five men have been convicted in the UK of defrauding expatriates of up to two million pounds in an elaborate and carefully created bogus investment scheme, it seems that never has advice about how to protect yourself and your wealth from offshore investment scams been more readily required.
The fact of the matter is, there are potentially great options and alternatives for the saving, banking and investment of your wealth offshore, depending on your own personal circumstances – but because few expatriates have an in-depth international understanding of money matters, there are a few rogue individuals who seem keen to exploit this fact and scam some people out of their savings.
If you’re living overseas already or are thinking about going to live, work or retire abroad, there are some incredibly simple, commonsense ways that you can ensure you never fall prey to fraud. At the same time, there are ways you can gain access to the best advice available to assist you when it comes to the protection or enhancement of your wealth, thanks to the very real expatriate advantage that exists – and thanks to those international advisers who are qualified, reputable and genuine…
Expatriates Defrauded of Nearly £2 Million
Five people in the UK have just been convicted of defrauding international expats out of almost £2 million through a company they set up called Prudential Commercial Investments, according to the website IFA Online. The scam was apparently very well orchestrated, with supporting investment and sales literature and the company’s website all being produced to the very highest standards for example. This was a sophisticated fraud it seems, and one that was difficult to spot at face value…so how can expats ensure they never fall foul of such a scheme again?
Well, the good news is that those who perpetrated this crime are now behind bars for a long time – and there are some simple steps that you can take to make sure anyone giving you advice is qualified to do so, and that you’re doing the best that you can for your wealth.
Simple Steps to Protect Yourself from an Offshore Investment Scam
The initial key to protecting yourself and your wealth from an offshore investment scam is to understand what is and is not legal and legitimate about going offshore. So, you need to know that for many people there are ways they can access offshore and international opportunities once they leave their nation of domicile behind and become tax resident overseas. The main advantages to taking such opportunities relate to: -
i) The diversification of investment assets
ii) The diversification of underlying investment or banking currencies
iii) Having access to international advisers, brokerages or money managers and
iv) Being able to do so much more with one’s wealth as regulations differ all over the world.
However, the release of all of these fetters can also mean that there is less regulation out there to protect you – so if you don’t quite know what you’re doing, you’re perhaps less well protected by rules that would otherwise highlight to you that the path you want to follow may not be advantageous.
So, what you need to remember is that you have a very real obligation to understand essential aspects such as your tax position and requirements to declare assets, income, interest earned and so on to the government in the country you’re living in, working in and perhaps even domiciled in. Additionally, you have to take on the responsibility of doing due diligence on anyone who offers you advice, and on any scheme, solution, account or investment suggested to you or which you come across.
Yes, there are great opportunities available for the international investment of wealth – but whether you are eligible to take advantage of these opportunities and whether these opportunities are right for you as an individual based on your risk profile, investment objectives, tax position and nation of residence or domicile for example, is something that you have to work carefully to assess correctly.
Knowing Where to Start to Protect Yourself and Your Wealth
1) Understand your tax status and all obligations on you for the declaration of your position for tax purposes. Ignorance is not an excuse. To gain assistance in this area you can call on the likes of international accountants and qualified financial advisers. However, be sure to check each individual’s credentials and accreditation. Requesting this information is standard, therefore no professional should be reluctant to give it to you.
2) Understand your personal objectives for the management and enhancement of your wealth. If you’re living abroad and looking for an international way to manage your money day-to-day, perhaps an offshore bank account would be the perfect solution for you. Perhaps the establishment of an offshore company or trust structure and the creation of an offshore bank account for that company through which you mange your money would be overkill. If you’re looking for a savings solution for your pension whilst you’re working abroad, there are perhaps offshore solutions that offer you greater flexibility than continuing with your onshore pension. By taking the time to think about what you want, you can then know that when you sit down with an adviser or perhaps peruse solutions online, you’ll be able to understand when you’re directed or led to a given solution. If you haven’t thought through your financial options and objectives, you can maybe be led astray by someone who will perhaps play on your naivety and make wild and false predictions and promises or just ‘simply’ direct you to a solution that is not right for you right now.
3) Only consider working with and trusting an international financial adviser who understands that expatriates have a potential advantage, that their tax status can be complex, that their international lifestyle can mean certain solutions are or are not suitable for them and who will look at you holistically and as an individual.
4) Make sure any adviser you trust is qualified and backed by a legitimate and established brokerage.
5) Do due diligence on the adviser and the brokerage.
6) Ensure your adviser works with you, completes a full fact find, understands your risk profile and matches proposed solutions to your own requirements.
7) Go through each proposed solution carefully. Work out whether it does indeed match your requirements. Make sure any account or solution is based in a reputable nation or offshore jurisdiction. Make sure the finance house or bank proposed is legitimate and secure.
8) And finally - never, ever, ever hand over any money to your adviser or the brokerage they work for. You make investments or place funds on deposit directly with the institution you invest, save or bank with – your adviser is not a third party intermediary who handles money.
By following all of these common sense steps you will be doing absolutely everything you possibly can to protect yourself and your wealth.
As stated, there are many fantastic and exciting opportunities potentially available offshore – you just have to make sure you’re eligible for them, they are right for you and they are legitimate. If you would like our assistance in finding the information or advice that you’re seeking, visit our expatriate financial services section. We are a publication supporting the provision of information and advice to expats, where possible we will do our best to fulfil your individual requirements for assistance. Note however that we are not financial advisers, and if you therefore contact us seeking professional advice, we will endeavour to introduce you to those who are qualified to legally assist you.
