Asking your advisor the right questions will make a difference when searching for an organization to manage your wealth across borders.
Many of Asia’s global families are connected to Canada by education, property, lifestyle or business. And as they cross borders, so does their wealth.
Enterprising global families in the region are erasing physical borders in search of more opportunities to build and protect their wealth and legacy.
According to the Kearney Foreign Direct Investment Confidence Index, Canada is one of the top three investment destinations of choice, outranking the UK, Australia, China and 25 other countries.
Iggy Chong, head of enterprise private clients at RBC Wealth Management in Asia, explains why families in the region are pursuing opportunities in Canada: “High-net-worth individuals view Canada as a destination of choice, whether that’s for future immigration considerations or for asset allocation and portfolio diversification. Canada is one of the places that has a healthy emerging technology and artificial intelligence industry and sector. With ESG and sustainability-related themes more pronounced, Canada is also well-known and active in this space.”
Another reason for sending wealth across borders could be family dynamics. “The first generation [of high-net-worth individuals] may have sent their children to study abroad and this next generation planted roots in Canada after completing their education,” Chong says, and when it comes to wealth transfer, he points out parents in Asia may consider relocating to Canada to join their children. This is an example of how a family situation necessitates wealth to be placed across borders.
One key motivation behind cross-border wealth planning is diversification.
“In a lot of cases, it starts with their children going to school in Canada. And as roots are planted there with other parts of the family on the move, global diversification takes place. For example, a family might have business in China while also buying property in Canada – that is a form of global diversification,” explains Vivian Kiang, managing director and head of RBC Wealth Planning and Fiduciary Services in Asia.
Kiang adds that diversification also allows investment portfolios to have a more globalized edge with multi-jurisdictional exposure as Asian high-net-worth individuals look beyond local shores and take advantage of other opportunities across the continent.
Implications can arise when your wealth moves overseas. For high-net-worth individuals with an international lifestyle, this often means looking for an equally international wealth manager with a regional presence. And the combination of global resources and a distinct understanding of jurisdictional regulations becomes critical when business ventures are involved.
When it comes to moving wealth to Canada, Chong lists expertise, knowledge, breadth and depth of services as a few important things to look for in an advisor. “You would want a partner and service provider that is strong and stable as well,” Chong says.
He says attributes to look for in a wealth manager include the ability to help families navigate what’s important in their lives and to assist in planning their financial future.
As portfolios become global, the advisor-client relationship also becomes complex due to the nuances of cross-border regulation. “Does the advisor you work with understand the Canadian market? Or understands why a trust may have unintended consequences when one becomes a Canadian resident?” Kiang asks. She emphasizes working with an advisor who understands both the local landscape in Asia as well as Canada, and who can help clients avoid pitfalls and reduce complexities.
Asking the right questions is another aspect to look out for when searching for the right organization to manage your wealth across borders. Chong says the key question is, “What is the endgame?” He believes it’s important to work with an organization that wants to understand the endgame first – instead of jumping into different solutions without a plan.
“It may sound like it takes more time but that should be the case, rather than simply getting something going,” Chong explains.
“As you introduce different countries, you also introduce cross-border complexities and you want someone who is well-versed in planning across these different variables,” Chong says, adding that the key to success is finding a trusted partner to help develop a personalized and globalized wealth management journey.
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