Author Topic: Offshore Managed Portfolio Question {for a beginner}  (Read 1358 times)

JackReacher

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Offshore Managed Portfolio Question {for a beginner}
« on: October 21, 2016, 10:57:24 AM »
First of all, I would like to thank everyone for their good posts - and advice. I've been reading and learning a lot here.

I currently live overseas and right now all of my money is in cash - and I'm looking to get started. My knowledge is pretty low, so I was wondering if the community here can make sure I'm on the right track. Some details, I was speaking to a financial advisor and he recommended that I look into ways to manage my funds ( He gave me two options - one an offshore pension scheme, the second a managed portfolio option)

I'm kinda weary - as there are great threads here on why Offshore Pension schemes are a horrible idea. (and it makes me question anyone who would recommend this in the first place) My job is high pressure and very long hours so I'm thinking about the managed portfolio option.

Key points about me:
l live in Asia, and would be looking to invest for about 20 years before retirement.

The managed portfolio was an initial offering was where I deposit a lump sum, and they take a 2% cut off the top. With a yearly management fee of 1.5% taken quarterly. The idea was to make small monthly deposits of 2-3 K (which would then incur a 2% take as well)

I want to learn more - and self manage, but I know I don't have the time, and I'm thinking this is a good way to start and forget it, then when I have more time (and more comfortable) be able to do more independently.

Am I on the right page here? we all need to start somewhere.
thanks in advance, and I apologize if I have some of the terminology wrong.

JR



CowboyAndIndian

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Re: Offshore Managed Portfolio Question {for a beginner}
« Reply #1 on: October 21, 2016, 12:44:36 PM »
Need lots more information.

Which country are you a citizen of? If the US, then can you create a Vanguard account in the US and invest in it?

The managed portfolio was an initial offering was where I deposit a lump sum, and they take a 2% cut off the top. With a yearly management fee of 1.5% taken quarterly. The idea was to make small monthly deposits of 2-3 K (which would then incur a 2% take as well)

Is the  1.5% of management fees just the financial advisers fees? If so, this is awful, since the funds he will invest with will also have management fees. Looks like the only person who has a guaranteed return is the financial advisor.


JackReacher

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Re: Offshore Managed Portfolio Question {for a beginner}
« Reply #2 on: October 21, 2016, 11:10:25 PM »
Hi CowboyAndIndian,

No, not American - I'm Canadian.

The platform is be professionally managed by a team of UK Investment Managers in the channel Islands.
Fee’s would be an initial 2% on each investment paid, followed by a 1.5% annual Management fee taken on a quarterly basis.

Kalergie

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Re: Offshore Managed Portfolio Question {for a beginner}
« Reply #3 on: October 22, 2016, 03:58:01 AM »
What's the company name? btw if done right, you'd spend less time managing your own portfolio than writing a post on this board.

Freedomin5

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Re: Offshore Managed Portfolio Question {for a beginner}
« Reply #4 on: October 22, 2016, 04:47:01 AM »
I'm a Canadian living and working in Asia. What I've found easiest is the following:

If you're still considered a Canadian resident for tax purposes (I.e. paying Canadian income taxes), then open an online account such as TD Webroker (I think most if not all the major Canadian banks will have something similar), and open RRSP and TFSA accounts through them, then dump your money in those accounts. You can manage it all online.

If you have declared non-residency for tax purposes, then open an online account with a Canadian bank and put your money in a non-registered account.

If you go back to Canada each year, you can also dump money in mutual funds. You have to do that in person because they need your signature.

If you're paid in the local Asian currency, you will need to find a way to move money to Canada. You can either go through the local big banks, or you can find a grey channel, but that will require a trusted family member/friend in Canada to pick up the money for you and deposit it into your Canadian account. The nice thing about the grey channels is that it can all be done online.

If you don't know what to invest in, there are some funds similar to Vanguards Life Strategy funds that basically give you a nice mix of mutual funds depending on your risk profile. I personally have money invested in TD's Comfort Growth Portfolio. It automatically gives you a 80% equity/20% bond mix and basically is a simple managed portfolio. The management fee is approximately 2.25% per year. I'm sure any of the large banks have similar products for newbie investors.

Personally I would keep all investments either in Canada or in the country in which I am working -- it makes the taxes much simpler. The reason I stay away from the companies you mentioned is because I can get similar products from banks and institutions I know and trust. It's highly unlikely that TD or CIBC will go out of business anytime soon.

Canadian Couch Potato is a great site if you're wondering what to invest in.

CowboyAndIndian

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Re: Offshore Managed Portfolio Question {for a beginner}
« Reply #5 on: October 22, 2016, 07:39:05 AM »
Hi CowboyAndIndian,

No, not American - I'm Canadian.

The platform is be professionally managed by a team of UK Investment Managers in the channel Islands.
Fee’s would be an initial 2% on each investment paid, followed by a 1.5% annual Management fee taken on a quarterly basis.

That is awful!. You are being setup to be screwed!.  With a front end load of 2% and a annual 1.5% management fee. Your money grows at a much slower rate! Investing for long term is a marathon, not a sprint.  Like a marathon, lagging a little behind on each part of the race means that you end up substantially behind at the end. Simple example, if you had $100k invested, and the markets went up 10% in the first year, your  starting investment ($98k after front end 2% load) would grow to $106k after one year (after 1.5% management fee). If you did not have these fees, your $100k would grow 10% and you would have $110k. The next year, the missing $4k causes a reduction of $400 gain. f

Ignore the advice of financial advisors who are only looking out for themselves! There are a lot of snake oil salesman. I guess your internal radar must have gone off for you to ask for advice on this forum.

The steps I would suggest are
  • Learn more about what your options are. The best person to manage your investments is YOU.
  • Most people spend more time on planning a  vacation than on their investments. Do not be one of them
  • I am recommending investments in US/Canada, since there are more protections against investor fraud.
  • Every time you get financial advice from anyone (including this forum), determine if it is genuine help or it enriches the advisor

Best of luck on your journey.
« Last Edit: October 22, 2016, 09:42:59 AM by CowboyAndIndian »