The easiest way to start investing and to build a lump sum is by saving a small amount on a regular basis. However there are some common pitfalls to avoid:
• Don’t over commit. Many advisors earn an upfront commission from the saving plans they sell. They will often try to get you to over commit and save more than you can afford for longer, so they can generate a higher sales commission.
• Maintain flexibility.
• There’s the old adage, ‘No one knows what’s around the corner’, which is especially true as an expat living outside your home country. Its important to put a financial plan in place, but its equally important to ensure the plan can adapt should, and if, your circumstances change.
• Avoid contractual plans, there are more cost effective, flexible alternatives.
• Know how your advisor is being remunerated.
• There is no such thing as free advice. Most offshore advisers will say their advice is ‘free’ as you pay them nothing as the product provider pays them, reclaiming it through an extra admin fee. However, this fee or commission is funded from your investment.
• At Intelligent Investments, we conduct ourselves as if in a developed market, such as the UK, where commission based financial advice is banned and provide clients with an explicit declaration of fees, and how we are remunerated.