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Why have 91% of expats not sought expert financial advice?

While expat financial affairs are complex, very few expats actually seek financial advice. This article provides a summary of our recent report looking at The State of Expat Financial Advice

Written on 30 March 2023

According to a recent HSBC report, only 9% of expats have had help from a financial adviser, yet 52% said find their financial situation difficult to manage due to tax.

We’ve spoken to hundreds of expats over the years who’ve received inappropriate advice which has been detrimental to their finances – often as a result of unsolicited sales approaches. This is why we’re on a mission to put an end to poor advice from rogue financial advisers by connecting expats with qualified support from experts they can trust.

We surveyed 100 British expats living in 52 different countries to find out more about their experience of receiving unsolicited financial advice to dig into one of the possible reasons why 91% of expats have not reached out to a financial expert to discuss their financial situation: the cold callers giving finance professionals a bad name.

Why expats seek financial advice from experts

Tax, pensions and investments are the most common reasons British expats seek expert financial advice.

The British expats we surveyed decided to move abroad for a variety of different reasons including lifestyle choices (47%), work opportunities (41%), retirement (21%) and to be closer to family (11%).

In line with the findings from HSBC’s report tax was the main reason British expats engaged with a financial adviser. 59% of our respondents told us they have sought expert tax advice within the last five years.

The other most common reasons British expats have sought expert advice are pensions (43%), investments (32%), mortgages (17%) and insurance (17%), while more than a third have received general financial advice (36%).

Unethical sales practices erode trust in financial service providers

Almost 1 in 3 British expats have received unsolicited sales calls from financial advisers

Cold-calling is prevalent across almost every industry, but in the financial sector, unsolicited approaches can be unsettling – especially if the caller refuses to disclose how your personal data was obtained.

31% of the British expats who responded to our survey said they had been approached by a financial advisor or advisory firm without prior consent.

Essential Expat Tip

If you're not expecting a call to discuss your financial planning, treat any claims with extreme scepticism.

What our experts say... Cold calls are an age-old approach used by ‘boiler room advisory firms’ where teams of salespeople masquerading as financial advisors play a numbers game until they get sales by cold-calling unsuspecting people.

They tend to offer ‘free advice’ and brilliant returns, but they will be compensated by commissions which will come from your initial investment, and the products "sold" are rarely in line with your own personal financial goals, just their sales targets. Legitimate financial advice can never be provided through a cold call and can only be offered when a formal fact-find has been conducted on your situation.

It can also take time to get, review and make recommendations, so try to avoid rushing or expecting things to be done within a matter of hours or days.

86% of cold-callers refused to disclose how they obtained expats’ personal data

86% of expats who received unsolicited phone calls told us that the caller refused or failed to disclose how personal data had been obtained.

In the few instances where the caller did share how the recipient’s personal data had been obtained, the answer was most often through a social media platform such as Facebook, LinkedIn or Twitter.

Essential Expat Tip

If the person speaking to you will not disclose how they got your personal information, be extremely cautious. You are entitled to know how and why they are calling you.

What our experts say... Be mindful of how much information you willingly put on your social media platforms as cold callers will scour LinkedIn, Twitter and Facebook to find people to contact and target.

80% of expats felt at least some pressure to make a decision during the call

During these conversations, 82% of expats felt that the person who contacted them was trying to sell them a specific product regardless of their financial situation.

While it was encouraging to hear that none of the expats we surveyed proceeded with financial services offered by cold-callers, it’s alarming that these approaches continue to persist within the industry.

Essential Expat Tip

Never make a decision about anything, financial or otherwise, off the back of an unsolicited phone call. If it sounds too good to be true, it most likely will be.

What our experts say... While most people know not to make financial decisions off the back of an unsolicited phone call, many feel pressure to do so.

With recent major events like Brexit, Covid-19 and financial crashes, unscrupulous salespeople will use any major event to create panic in order to get the sale. While there may be truth in some claims, always take your time, speak to someone else and do a little research yourself - if someone is trying to pressure you, tell them “no” and end the call, they will not have your best interests at heart.

Lack of transparency creates a lack of trust in financial advisers

Many expats who seek financial advice will be feeling confused and overwhelmed by their financial situation – whether they’re having difficulty understanding their tax liabilities or aren’t how best to invest for their future.

Despite this, many expats told us that in their experience of dealing with financial advisors while living abroad, crucial information was not made clear.

50% of British expats have dealt with a financial adviser who did not discuss tie-in periods

Half of the British expats we surveyed told us they had engaged a financial adviser who didn’t discuss their tie-in periods with them at all.

Furthermore, 41% told us they did not receive any information about exit or cool-off conditions while 32% did not receive any information about early exit fees.

While of course expats should always ensure they carefully read the fine print before signing any contract, the prevalence of advisers not making this information clear to their clients from the outset does nothing to build expats’ trust in financial advisors.

Essential Expat Tip

Always read the fine print and ensure you know the length of commitment, fees, cool-off period and products being proposed.

What our experts say... While it is possible to help people get out of contracts they’ve signed, it can be extremely difficult and in some cases too late. Never leave anything to chance or goodwill.

If you are signing something, be sure you know exactly what you are signing up for, and if you are in doubt, ask for clarification. Never accept “We’ll discuss this after you’ve signed” as a response, it may be too late to back out by that point.

63% of expats have dealt with a financial adviser who failed to provide a detailed personal report

Almost two-thirds of British expats have dealt with a financial adviser who failed to provide them with a detailed report regarding their personal financial situation.

Alarmingly, of the expats who did receive a report, only 23% said their report contained confirmation of tie-in periods and just 28% said it contained a breakdown of any early exit fees.

Essential Expat Tip

You should always get a full report which includes your risk profile, options, fees, tie-in periods, and expected returns as an absolute minimum.

What our experts say... Even if you do get a report, ensure it includes everything in writing and aligns with your personal financial objectives. If you are unsure about anything in the report, or you feel that something is missing, be cautious and seek clarification.

Never sign anything unless you are 100% certain. We always recommend getting a second (or third) independent review before making a decision.

How can expats know which financial advisers to trust?

Navigating a different country’s rules and regulations when it comes to your finances can leave expats particularly vulnerable to unfair practices at the hands of unregulated advisers who erode trust in the personal finance industry and discourage expats from seeking expert advice when they clearly need it.

When we asked our survey respondents what advice they would give to other expats making financial decisions, here’s what they told us:

  • Find an advisor with expat expertise and work only with independent advisers
  • Be prepared to do some of your own research to help you understand the facts of your personal circumstances
  • Get advice from multiple experts but don’t let yourself be pushed into making a decision
  • Ask your adviser for a full breakdown of charges before proceeding with in-depth discussions
  • Speak to Experts for Expats before making any decisions

Essential Expat Tip

A common technique by unscrupulous advisors is to become your friend. Avoid getting too friendly and keep your relationship professional.

What our experts say... Your financial advisor or wealth manager is exactly that – an independent adviser.

You are paying them to provide you with independent, trustworthy advice that aligns with your financial and personal goals. Keep it professional to avoid the relationship becoming complacent.

Digging deeper into the State of Expat Financial Advice in 2023

Our Expat Guide to Finding a Finance Adviser You Can Trust goes into more detail on how to find the right advice for your circumstances in a sector fraught with rogue traders.

Download our free guide to The State of Expat Financial Advice in 2023 >

Getting the right advice from a regulated, independent financial adviser gives expats comprehensive support to plan for their future by managing their money well today.

At Experts for Expats every introduction is dealt with by hand and we only work with people we trust.

Expats can request a free introduction to a fee-based independent financial adviser with our free introduction service.

Testimonials from people who have used our specialist IFA introduction service

As an expat who has been living outside the UK for 30 years, it was reassuring to speak to a representative of your company who seemed to have his clients interest at heart, especially when the client has no expertise in finances and investment.

Phil. C. France, Pensions

A quick response and very happy with the consultant that was recommended

Jill P. United Arab Emirates, Investment Advice

I don't normally recommend financial providers to anyone as it is so personal but if someone asked specifically for advice for Expats I would suggest they tried your website.

Liz S. United Kingdom, Investment Advice