With more British expats living in Spain than any other country, it is no surprise that there is a high demand for financial planning in Spain. Most people make the move for the classic reasons such as great weather, low cost of living and quality of life. The focus when relocating is often on finding the right place to live, getting settled, making new friends and as a result sorting your investments, pensions, and finances out takes a back seat.
Why is it important to plan your financial future
Whether relocating to Spain for work, retirement, both or just to get away from it all the importance of financial planning cannot be underestimated. There are many reasons why financial planning is important, a few of which are:
Investments – By establishing a proper financial plan which considers your objectives, risk tolerance, and personal position, the right portfolio can be constructed to meet your needs.
Pension – Your pension is your nest egg for later life. Much like your investments, it is integral that it is managed in line requirements and investment term. Any UK pension may no longer allow flexible access now you live abroad as well as the significant currency risk of being invested in Sterling and you now living in Euro.
Income – Either managing your existing income or contributing to a savings plan/pension making the most of your disposable income now is integral to having enough in later life.
Assets – Realising the value of your current assets and how they can be a part of your overall financial plan.
Inflation – Often, the overlooked biggest threat on your purchasing power when not taken into consideration can have hugely detrimental effects on cash flow in later life.
Emergencies – We have all been told the importance of saving for a rainy day. However, when money is tight this is often overlooked. Having sufficient protection in place is a key area of financial planning, providing the security for you and your family, and making sure an emergency doesn’t affect your primary objectives.
Who do I entrust my financial future too?
When ready to address the need for financial planning the next step is to find the right financial planner. Again there are a number of key questions you should be asking when choosing the right company such as:
Are you fee-based or commission based?
Any financial adviser who is commission based automatically has a conflict of interest. Commission based advice means the adviser is being paid by the provider he is recommending and as such it is very unlikely this is going to be the best option for you. It also results in high running costs as any monies paid out by the provider has to be made back plus their own fees as well as exit penalties when wanting to access your money. It often results in the financial adviser disappearing after the initial process as they have made all their money upfront and there is nothing else in for them. Fee-based is the opposite, fully transparent with no opaque charging structures and always based on choosing the best product and investment for the client. It involves working on a hand in hand strategy, investing for the long term and building long last relationships.
Where are you regulated?
Regulation really breaks down to protecting you the client. The higher the level of regulation, the higher the level of protection for you the client. If you are receiving advice from someone based in Europe who is regulated from Mauritius, Lithuania or some other minor jurisdiction you have to ask why. The regulator is who holds the adviser accountable and who any complaints by you the client are made to. It is imperative any adviser you consider be regulated to the highest standard.
Financial Planning In Spain – What next?
Here at Harrison Brook, we provide fee-based advice to expatriates throughout Spain. Regulated to the highest standard via the Gibraltar Financial Services Commission, our Financial Advisers help expats around the globe with their UK pension transfers, managing existing investments, investment platforms/portfolio management, regular savings, insurances, mortgages and much more.