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Topics Your Expat Advisor Should Cover in Your Annual Review


As a U.S. expat, you face unique financial challenges. While it’s important for everyone to regularly review and update their financial plans, it’s especially vital for Americans living abroad to keep up with evolving circumstances, tax regulations and life changes. At a minimum, be sure to cover the following topics in an annual review meeting with your international wealth manager and tax advisor.

#1 – Any changes that occurred in your life over the past year

Your financial plan should be a dynamic document that’s regularly revised to remain up to date with any developments in your life and financial situation. Work with your international wealth manager to update your plan based on changes to your employment, health, family situation (such as a marriage or the birth of a child), assets (such as receiving an inheritance, whether foreign or locally) and overall financial objectives. Your wealth manager will use this information to make necessary updates to your financial plan and investment portfolio in order to help ensure they continue to meet your ever-evolving needs.

#2 – Investment performance and allocation

Your international wealth manager should provide an annual review of your investment performance and assess your portfolio’s progress in helping you achieve your objectives. Part of this review should look at your investment allocation to determine whether any changes should be made based on current market conditions, your risk tolerance, your time horizon or any recent changes to your goals or personal financial situation. Investment strategies aren’t just determined by these factors — needs and circumstances must also be considered in order to ensure your bespoke investment strategy fits your goals.

This review is especially important for U.S. expats to help ensure you continue to avoid common expat investing mistakes that could significantly impact your portfolio, such as investing in a passive foreign investment company (PFIC).

#3 – Fees

If your advisor doesn’t proactively offer full transparency into his or her fees, you may have a problem. If not properly accounted for, investment and advisory fees have the potential to significantly erode your long-term savings potential, which is why it’s critical to understand all fees you’re paying. Your advisor should be upfront and honest about the fees he/she is charging to help manage your financial life, using low-cost investment products wherever possible.

If you’re working with other professionals, such as tax advisors or an estate planning attorney, it’s important to regularly review their fees as well.

#4 – Progress toward your financial goals

What’s the point of working with an advisor if he/she isn’t helping you achieve your personal financial goals? At least once a year, your international wealth manager should provide a recap of your progress, inclusive of tax planning and estate planning, and update you on next steps.

#5 – Goals for the upcoming year

Your annual review meeting is also an opportunity to establish your short-term goals for the upcoming year. Do you anticipate any changes to your personal financial life over the course of the year? Be sure to bring these up with your wealth manager and discuss strategies for incorporating short-term goals and/or challenges into your overall financial plan.

#6 – Banking and currency considerations

Managing your finances as a U.S. expat involves dealing with foreign currency, banking regulations and international money transfers. Your advisor should conduct an annual review to help ensure you’re managing your banking and currency needs in an efficient and cost-effective manner, maintaining appropriate local bank accounts and minimizing foreign exchange fees.

#7 – Compliance with foreign financial reporting requirements

As a U.S. expat, it’s important to ensure you remain in compliance with various reporting requirements, such as those associated with foreign bank accounting reporting (FBAR), the Foreign Account Tax Compliance Act (FATCA) and a multitude of other IRS tax documents. Your advisor should provide guidance to ensure you remain compliant with all U.S. and foreign regulations in order to avoid potential penalties and legal issues.

#8 – Tax regulations and compliance

Properly managing your tax exposure is one of the most difficult financial challenges faced by many U.S. expats. Making a mistake can be extremely punitive, impacting your financial outcomes for years to come.

Your international wealth manager should regularly review your tax situation and provide guidance to help you optimize your taxes across multiple jurisdictions. Specific topics to cover include, but aren’t limited to, FBAR requirements, tax filing status, pre-country move planning, retirement income optimization, country specific tax considerations, foreign tax credits and double-taxation treaties.

#9 – Risk management

As a U.S. expat, you face unique risks. On an annual basis, your advisor should review your strategies for dealing with unforeseen events, such as a medical emergency, natural disaster or job loss. As your situation changes over time, you may need to make adjustments to your emergency funds, insurance coverage and/or estate planning strategies to help ensure you continue effectively managing the risks you face.

Are you looking for an international wealth advisor to help you navigate the challenges you face as an American abroad? Creative Planning International is here for you. We work with U.S. expats and cross-border families to help maximize their wealth and avoid costly mistakes. As expat fiduciary advisors, we understand the complex interaction of multi-jurisdiction tax and regulatory regimes and take into account currency management, diversification, tax and other considerations as we help you plan and invest for the future.

If you’re an American living abroad and could use some help optimizing your financial life, request a meeting with a member of our team.

This commentary is provided for general information purposes only, should not be construed as investment, tax or legal advice, and does not constitute an attorney/client relationship. Past performance of any market results is no assurance of future performance. The information contained herein has been obtained from sources deemed reliable but is not guaranteed.


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