By Nathan M. Walters, Contributing Reporter
RIO DE JANEIRO, BRAZIL – Relocating to Brazil, and Rio in particular, prompts many questions for expatriates. One question more foreigners living, or intending to live, in Brazil should be asking is, “How am I planning my future?”
Howard Borsden, founder of Looking for Dylan, an Anglo-Brazilian financial planning group, notes, “People’s situations are always changing and their financial planning needs to change in response. Once a person goes international the dynamics of financial planning undergoes an augmented complexity with each additional dimension, such as marriage, children, etc.”
The term “financial planning” is used liberally to describe a wide-range of services and products. Correctly used, financial planning is the assistance of a qualified professional in helping to devise and implement a financial strategy that addresses both short- and long-term needs of the client.
This planning does not only encompass the aspirations of the client during their own life but also the financial legacy he or she wants to pass on to loved ones.
Unfortunately, the selling of financial products is often confused for financial planning. Brazil has become a prime location for those involved in sales of financial products (particularly insurance products), rather than servicing the client’s financial planning needs.
In some situations the seller is not so much concerned with the long-term interests of the client but, rather, in the commission earned on the sale. Because such a situation may cause delayed frustration, advises people to make an assessment of their financial goals before approaching a third-party for assistance.
In all cases one should ask for proof of regulator compliance. In Brazil this means a registration with SUSEP or CVM; in the UK a FSA registration number and in the U.S. “SEC approved” and Borsden suggests investors never deal with anyone who cannot demonstrate these certifications.
“It behooves potential investors to seek the assistance of a qualified-professional. Too many people think that because they are successful in the their own field, for example, as an engineer, that they have the acumen to navigate their own financial planning,” notes Borsden.
“The ‘day trading’ of the pre-financial crisis is just not a reliable route for everyone and people have to ask themselves, ‘How do I want to invest my capital?’ and decide if they have the competency to do that effectively.”
Borsden suggests that expatriates, as well as Brazilian nationals that have gone or plan to go international, ask themselves three questions when considering the assistance of a financial professional:
– Where have I been? Expats have an idea of how things work in their former country. They bring this knowledge with them and may be aware of certain issues they need to consider but may also not fully understand the consequences of their “home” jurisdiction.
– Where am I? In relation to the former question, most people arriving in a foreign country may not have a good understanding of how the local rules work or if they even apply to the individual.
– Where do I want to go? Retirement planning involves many dimensions, understanding where a client wants to go helps to make decisions today that can have a big impact on the distant or not-so distant future.
Often such questions are tax driven rather than investment product driven. Focusing on these questions can help potential clients better understand their current situation, as well as their future goals.
“Looking for Dylan is one of the few financial planners in Brazil that is fully-certified in both Brazil and France, which, by virtue of European Union rules, makes us qualified to advise throughout Europe,” mentions Borsden, “We have a depth of knowledge that positions us to better serve client’s needs internationally.”
Though the company offers a wide-range of long-term financial planning services, it mainly focuses on three distinct areas: tax planning, wills, and risks (health, life and disability insurance) as well as its core ability to offer qualitative savings, pensions and school fees savings plans.
Tax Planning:
Ben Franklin once quipped, “Nothing in this world can said to be certain except death and taxes. The latter can be a complex situation for expats living abroad, in some situations the former seems easier to manage.´´
American expats, subject to US tax by virtue of citizenship (even if residing abroad, a point of much controversy), must take into consideration the dense and complex rules concerning international taxation. Other nationalities too must understand the tax consequences of living and working in Brazil. Understanding current tax status combined with investment planning for the future can be a challenge.
Wills:
It is human nature to shy away from the idea of our own mortality. Yet, no matter how much we ignore the topic, the certainty of which Ben Franklin speaks will ultimately come to pass. Understanding a client’s investments and how those will pass to beneficiaries, either through Wills or pursuant to an investment contract, is important in protecting the value of the investment and the benefit to be received by the intended benefactor.
“People need to take a closer look at their Will or Wills, understand the legal import of Wills from another country in Brazil and the relationship with tax. Anyone who has signed an investment contract needs to consider the relationship with Wills and taxation. In an international context this is very important,” urges Borsden.
Risks – Insurance:
“A common mistake expats make when they come to Brazil, usually working for an multi-national group, is to disregard insurance planning. They know they are covered by their employer but don’t realize some of the pitfalls of that situation. Because we live in an era where employees have more mobility, as well as more possibilities to strike out on their own, only maintaining risk insurance with an employer can lead difficult situation,” explains Borsden, “I always advise clients to consider insurance parallel to employer insurance.”
The three issues above are, of course, replete with a myriad of related issues, foreign currency among them. The complexity that they entail requires the personal assistance of a competent adviser willing to be involved in long-term planning.
Looking for Dylan stands out as one of Brazil’s most highly skilled financial professionals. If you are interested in preserving the value of your future, contact Howard Borsden today at: www.lookingfordylan.com.
* This is a paid Advertorial for Looking for Dylan.
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