“It’s like walking a tightrope,” founder of Saikal-Skea Independent Financial Advice Andrew Saikal-Skea explained on the ifa Show. “It’s really tricky advising clients when they’re overseas and it’s really contentious.”
Jurisdictional differences and regulations at home in Australia mean that advising overseas clients comes with a caveat of conditions.
First, like any client-adviser relationship, understanding who they are is vital. Understanding their goals, profession and motivations for seeking advice will help inform not only what you should tell your client, but if they are worthwhile taking on.
Military personnel stationed overseas, diplomats or people who work for multinational organisations are a common clientele often seeking advice while overseas, Saikal-Skea said.
However, he added that not pushing beyond the bounds of Australian citizens is also important from a regulatory standpoint.
“I’m very careful not to solicit clients from overseas. You’re going to get into a lot of trouble doing that. You need to know your client, you still need be comfortable of where their money comes from,” Saikal-Skea said.
In addition to the need for caution when bringing clients on, he said understanding foreign jurisdictions can be particularly challenging. For advisers who have clients moving overseas with no intention of returning, he believes the solution is simple: “My advice is usually go and find a financial adviser in the jurisdiction that you’re [looking] to build a future in.”
However, if you have an Australian that’s overseas, with assets in that country, Saikal-Skea stated it is vital you understand their tax obligations.
One way of doing this, the adviser highlighted, is by creating a relationship with any financial professionals your client may have in their country of residence: “We usually have to get a pretty good working relationship with their advisory team over there. Whether that’s accountants or [other financial professionals].”
Another pitfall that advisers need to be careful not to fall into is giving advice on overseas assets a client may have, with Saikal-Skea noting that while the natural instinct of an adviser is to help, knowing exactly what assets of the client are within Australia is vital.
“We can only advise on Australian assets. For most people, if they’re moving overseas with an intention of coming back here, then it’s still appropriate because they don’t hold a lot of assets overseas,” he said.
However, knowing where your jurisdictional limits end will likely save you headaches and your clients legal problems further down the road.
Though it may seem tricky, advising overseas clients is plausible, though requires somewhat of a balancing act and can teeter close to edge if you are not careful. Being self-licensed also assists with this, Saikal-Skea said, because the “vast majority of licensees just do not want to take the risk”.
“So, for a lot of advisers, that’s just not going to be practical.”
