Mind Your Money: Made your investments? But are you reviewing them too?

Gone are the days when expatriates could seamlessly alternate between different currencies, tax regimes, and regulatory environments. The increased global mobility in recent decades and tense geopolitics have cumulatively shaped a world where expats face unique challenges in their wealth management. Navigating the intricate financial terrain today requires a deep understanding of various investment instruments and country-specific monetary policies. Financial intricacies and their dynamic nature require expats, particularly globe-trotting high-net-worth individuals (HNWIs), to review their portfolios periodically.

In the GCC, where an astounding 71 per cent of expats have reported feeling better off financially in 2023 compared to the previous year and find themselves well-positioned to make strategic investments, it is topical to discuss the importance of financial reviews. Based on our recent discussions with many expats seeking cross-border wealth management planning, we have outlined the factors that make periodic financial reviews a necessity rather than a choice.

Insuring against evolving risks

One of the core considerations for financial advisers reviewing portfolios is risk management. The idea of ‘risks’ has expanded in scope and magnitude in recent years, with personal liabilities, natural calamities, thefts, and the like becoming commonplace globally. On the personal front, the growing incidence of critical illnesses without age correlations, protracted economic downturns, and mass layoffs constitute risks to insure against. Financial advisers can help in this regard. They can perform a risk assessment and adjust your emergency funds, insurance protection, and investments to safeguard your interests for the foreseeable future.

Financial advisers emphasise comprehensive insurance protection for expats due to their mobile lifestyles and geographically distributed holdings. As personal and professional circumstances evolve, existing insurance plans must be optimised to ensure continued protection. Similarly, investment portfolios should be rebalanced factoring in changes since the last review.

Rebalancing investment portfolios for sustained returns

The volatilities in financial markets underscore the importance of periodic portfolio reviews. It is critical to revisit asset allocations, analyse performances, and make changes, if any, compatible with current market conditions. If your time horizon, risk appetite, and financial health have changed since the last review, you can rebalance the portfolio by yourself, or with the help of financial advisers, to ensure it suits your new goals. Personal circumstances such as marriage, retirement, vacation, and a new house can significantly change a person’s financial goals in just a few weeks. That is especially true for expats, whose portfolios must also reckon with currency fluctuations and ever-evolving domicile laws in the home or host country.

Come to think of it, an annual review is an opportunity to understand if you are on track to achieving your long-term financial goals, like voluntary repatriation to your home country following retirement. Simultaneously, it gives you the financial perspective to accurately plan short-term goals such as refinancing a mortgage or taking a vacation. If the portfolio performance is below expectations, it could be a sign to seek a second opinion or change the strategy.