How to select a Financial Planning/Advice Company as an Expat (or at all)

There are so many fancy titles and names for Expat Financial Planners, Expat Financial Advisers, Expat Wealth Managers, Expat Retirement Planners etc. But, for the purpose of this article, let's call them all into “Expat Finance Companies.”
So what is it all of these guys do? And which one is the best for your circumstance?
For starters, the one filter that I suggest you run anything like this through is is “How do they make their money?”.
Everybody needs to make money. A great saying I heard from my grandfather (a building contractor in Galway, Ireland) that has stuck with me, and speaks to the key to a successful business was “Always leave enough money in the deal for the other man”. Wise words.
In this situation, it says that in general we are happy to pay for a good service, after all we don’t value what is free. The question is “How do they make their money”
Well, there are really only four different kinds of ‘Expat Financial Companies’. It‘ll be your job to figure out which are which, should you decide you want to do business with any!
Below is a list of the services and what is actually done, and how each kind makes money:
Expat Financial Company Type 1 — Provide financial planning advice, recommend investment/financial products, invest your money for a fee.
This type of company makes money from receiving a kickback from the financial product they recommend to you from that company/bank etc (life insurance, personal protection, pension transfers, mortgages etc) and also make money in the form of a % of your invested amount. Meaning that regardless of if it goes up or down, you still owe the % of your invested amount. They may also charge you an initial consultation and set up fee.
It is this type of company that normally finds itself in trouble in the news as it’s very easy for them not have the clients best interest at heart. The money comes in regardless of what happens to the clients money.
Expat Financial Company Type 2 — Provides financial planning advice and invest your money for a fee.
This type of company doesn't recommend products but manages your money for % of you invested amount regardless if it goes up or down. They typically invest in low cost index funds on your behalf.
Certainly a better model of company for the consumer. However, index funds are great long term investment (see article here) but their beauty is in how low their costs are.
For example: The fund VTI- Vanguard Total Stock Market essentially invests in the best 500 companies in America on your behalf giving you a large exposure and less risk. They charge you 0.04% to do that.
If you go via this type of investment company, you will be charged the 0.04% by the fund and then the company will add anywhere between 1% to 3% on top of that.
Considering the stock market has averaged around 7% annually (all booms and busts included) since the early 1900’s, these expenses could eat into half of your earnings.
Expat Financial Company Type 3— Provide financial planning advice only.
This type of company provides financial advice for a fee upfront. These fees are typically higher but far less overall than Company Type 1 and 2. What tends to happen is that people baulk at the upfront cost, instead of the hidden costs of company 1 & 2.
For the consumer (provided that the person you are dealing with is of a high standard — I’ll put some questions below so you can figure out if they are worth their salt or not) this tends to be a good option.
However, the advice in generally not implemented as it is up to the individual to implement the strategy that was provided by the financial planner.

Expat Financial Company Type 4 — Provide Budgeting and Investing training and accountability so that customer can do manage their own money going forward — forever.
This is the newest style of financial company, but they harder to find. This type of company trains and implements the consumer to be able to do it themselves. Teaching a man to fish, so to speak, instead of having a lobster dinner with him and then asking him to foot the bill!
The costs are typically higher than Company 3 as the implementation requires more man hours, its personalised and often 1 on 1, but is still substantially cheaper than Company 1 or Company 2.
This is certainly the best type of company to utilise as an expat, or not an expat. Managing your own money for the rest of your life is a valuable skill.
Tips
- Google the company you are considering and click the news tab to see if they have been in implicated in any wrong doings.
- Ask “Are you affiliated with a broker/dealer?” If the adviser says answers “yes,” then you can end the meeting there. A good company will not be not affiliated with a broker or dealer, and being affiliated in such a way can influence their advice, as they are then in a position in which they may receive benefits and kickbacks for selling you a certain product.
- Try to distinguish if the person is a sales person or an actual Financial Adviser/Planner. A good question to ask is “Can I ask you your net worth and your own return for the last 5–10 years”. You will almost never get a straight answer but that’s not the point, you want to assess how they answered the question. A younger/inexperienced consultant/sales person will stumble very badly over their words while an experienced person will be able to answer the question comfortably.
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