Is DIY expat financial planning a good idea?
In recent years it has become something of a trend for some people to distrust experts. Instead, many of us decide to go it alone when tackling life’s challenges because we all know Google can diagnose health symptoms and watching a short YouTube video can help you install a new shower!
But if you are considering your wealth management and retirement planning journey, and are having reservations about hiring a professional to help you plan and manage your money, is this a sensible approach? What is involved in DIY expat financial planning, and is it going to fit in with your expat lifestyle in Singapore?
Are you cut out for DIY wealth management?
When it comes to financial planning, a ‘do-it-yourself’ approach brings with it a great many ongoing responsibilities. To fulfill the required tasks you will need to ensure that you not only have the necessary knowledge, expertise and practical skills but also the time, organisation and emotional resilience which are integral to the investment process.
There are five key criteria essential to DIY financial planning:
- You should love the investment process and be so passionate about investing strategies that financial pursuits already take up a large part of your leisure time. If your bedside reading consists of books on economic theory, if you enjoy an extended breakfast with the Financial Times, and you consider attending an investing seminar to be a relaxing break, you might just be suited to managing your own wealth.
- Another important qualifier for the DIY expat financial planner is the ability to comfortably make decisions about your financial future. This means that you must not feel overwhelmed by the process and the high stakes, and that this responsibility does not cause you to lose sleep at night.
- You will need to be time-rich and prefer to spend time reviewing your portfolios rather than playing golf at Laguna or hanging out with children. It sounds harsh, but it’s true. Good investment decisions require research, planning and accuracy.
- You will need to be able to withstand market volatility without making rash decisions. Investment portfolios inevitably lose and gain value during times of economic instability and you must be able to withstand ups and downs in the value of your assets and investments without making knee jerk trades or heat-chasing purchases.
- Can you keep your eyes on the long-game? It is easy for the self-investor to dip into their savings accounts, pensions and other assets without fully appreciating how this might affect future returns. Budgeting and time-horizon planning are key in this respect.
Only if the above describes you to a tee would you be a likely candidate for DIY financial planning.
Robo-advisers – Are they a good compromise?
Robo-advisers might seem like the perfect halfway point between DIY investment and working with a human financial adviser. However, in reality most investment platforms are little more than glorified algorithms that take some account of your risk tolerance and goals, following a short questionnaire, before grafting your funds into a pre-constructed portfolio.
They are not personalised, cannot talk to you, cannot listen to you, and cannot help you stay disciplined during times of volatility. In contrast, a professional financial adviser will develop a relationship with you and will integrate your finances, potentially complex tax considerations and estate plans while also taking account of all the unique cross-border concerns that go hand-in-hand with being an expat living in Singapore.
Lastly, a robo-adviser cannot know – or care – if you are having health issues, have a grandchild with special educational needs or are wondering about the financial implications of a divorce; a human adviser can make an invaluable difference at the times when you need expert, bespoke advice the most.
Singapore Expat Advisory partners you on your financial journey
Financial planning can be particularly complex and challenging for expats. Whether you’re an expat from New Zealand, UK or Australia, Singapore Expat Advisory works with you to plan your finances and manage your wealth. Get in touch with us to learn more about our suite of financial services, including education fee planning and retirement planning. Being able to realise your goals and be in a strong financial position to live the life you envision, can be gratifying.
Singapore Expat Advisory is an advisory platform for Promiseland Pte. Ltd Pte Ltd and are authorised and regulated by the Monetary Authority of Singapore (MAS).
General Information Only This article should not be construed as an offer, solicitation of an offer, or a recommendation to transact in any products (including funds, stocks) mentioned herein. The information does not take into account the specific investment objectives, financial situation or particular needs of any person. Advice should be sought from a licensed financial adviser regarding the suitability of the investment