Advisers must do due diligence for HNWs
If financial planners want to capitalise on the rising proportion of offshore wealth, they must do their due diligence and provide sound advice spanning multiple jurisdictions, according to GlobalData’s HNW Offshore Investment survey.
Despite recent data leaks and scandals like Paradise Papers, the proportion of high net-worth (HNW) individuals who invest offshore has risen from 11.2 per cent in 2014 to 16.9 per cent this year, and they’re seeking new homes for their wealth to achieve benefits from global diversification and gain tax efficiencies along the way.
They survey showed that 24 per cent of European investors offshore the largest proportion of their wealth to achieve tax efficiencies, while 41 per cent of North Americans invest the largest proportion offshore to diversify.
Senior wealth analyst, Heike van den Hoevel, said understanding why HNW investors offshore their wealth was paramount to capitalising on the rising proportion of offshore wealth.
“This means providers have to focus on uncorrelated or less correlated risks when promoting offshore investments to potential clients,” he said.
Van den Hoevel said while demand for tax advice was on the rise, the days of illicit structures have passed, and providers must do the due diligence to avoid reputational and financial damage associated with scandals.
AUTHOR
Anastasia Santoreneos
Recommended for you
ASIC has shared data on its licensing activity during the 2023–24 financial year, including how many were cancelled or suspended.
Australia’s largest financial advice licensee has led adviser growth over the past week, while 15 new entrants joined the industry.
A research paper has detailed whether individuals are more or less likely to change their investment decision when the advice is generated by human or by artificial intelligence, including any gender differences.
Sydney-based financial advice firm Sherlock Wealth has announced it is now operating under its own AFSL, one week after Andrew Sherlock took over as its chief executive.
