Navigating the complexities of international wealth management

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Successfully navigating international wealth management and investments can feel like trying to tame a hydra. You solve one problem, and three more arrive to take its place. But understanding the nuances of wealth planning abroad isn’t just for financial wizards. Having personal knowledge and the right advisor can help you manage certain risks and help you meet your long-term financial goals.

Let’s break down some everyday risks and complexities of international wealth management and identify solutions that can help simplify them.

Risks to consider

While risks in this international arena vary depending on the country, type of investment and other factors, here are some important aspects to be aware of:

• Different information in foreign languages

Challenge: Unlike US companies, foreign firms may offer limited financial disclosures. When they do, those reports may not be in English, complicating your investment decision-making process.

Solution: Choosing an investment platform that gives you access to multilingual financial analysis tools could help bridge the information gap, potentially carving out clearer insights.

• Unfamiliar investment costs

Challenge: Investing abroad may come with a steeper price tag than investing at home. These costs could quietly chip away at your returns if you’re unaware of them.

Solution: Working with a firm that can clarify all transaction fees and other costs upfront can give you more confidence moving forward.

• Exchange rates and market rules

Challenge: Foreign currency exchange rate changes can impact your returns for better or worse, and some countries enforce controls that make moving money in or out tricky. At the same time, trading practices and market regulations might vary widely from country to country.

Solution: Collaborating with firms that can outline any potential rate changes, taxes or other issues upfront can help give you the clarity you need to make smarter financial decisions.

• Differing liquidity levels

Challenge: International markets can have limited trading volumes, fewer listed companies and shorter trading hours. Certain investment transactions may also be more complex, as some countries restrict the type or amount of foreign stocks you can buy and sell.

Solution: Diversifying your portfolio across multiple markets with different liquidity profiles could reduce the risk of getting stuck with hard-to-sell investments.

• World events and changes in market value

Challenge: Geopolitical events, economic shifts and natural disasters can trigger sudden changes in foreign market value, significantly impacting the performance of your investments.

Solution: Working with a skilled financial advisor can help guide your investment strategy to remain robust across a wide range of regions and asset classes.

• Legal remedies and your reputation

Challenge: When disputes arise with international investments, US courts might not be able to address them. Even a successful lawsuit in the US can be difficult to enforce against a foreign company. Legal options in the company’s home country may also be limited, leaving your reputation and finances vulnerable.

Solution: Doing thorough research before investing, focusing on companies with data-driven services and choosing countries with investor-friendly legal systems could help you reduce legal and reputational exposure.

• Domestic and international compliance

Challenge: International investments can be a regulatory minefield demanding extra vigilance, and not all brokers and advisors are legally compliant. Working with unregistered foreign brokers can leave you unprotected under US laws. In addition, advisors without proper SEC registration might not meet your standards.

Solution: It’s important to research your advisor’s capabilities and verify their credentials through the SEC or other relevant regulatory bodies.

The bottom line

Whether you need to manage currency risks, uncover unfamiliar costs or comply with new regulations, proactive financial planning could make all the difference. Working with a financial advisor with international wealth management experience can help you better navigate these global complexities and help your investments thrive across borders.

Sources:

investor[dot]gov/introduction-investing/investing-basics/investment-products/international-investing

occ[dot]treas[dot]gov/publications-and-resources/publications/comptrollers-handbook/files/personal-fiduciary-activities/index-personal-fiduciary-activities.html

This material is provided for informational and educational purposes only. It is not intended as investment advice or a recommendation that you take a particular course of action.

As a firm providing wealth management services to clients, UBS Financial Services Inc. offers investment advisory services in its capacity as an SEC-registered investment adviser and brokerage services in its capacity as an SEC-registered broker-dealer.  Investment advisory services and brokerage services are separate and distinct, differ in material ways and are governed by different laws and separate arrangements. It is important that clients understand the ways in which we conduct business, that they carefully read the agreements and disclosures that we provide to them about the products or services we offer. For more information, please review the client relationship summary provided at ubs.com/relationshipsummary or ask your UBS Financial Advisor for a copy.  In providing financial planning services, we may act as a broker-dealer or investment adviser. When we act as investment adviser we charge a separate fee for the service and enter into a written agreement with you.  The nature and scope of the services are detailed in the documents and reports provided to you as part of the service.

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