Shrinking Planet

Asignificant number of the new clients that Jeremy Deedes, founder and director of the Yorkshire, England-based firm Planning for Life, has taken on this year have been what he calls “international”–people who, by virtue of their lifestyles, outlook, or investment objectives are increasingly turning to planners like Deedes to help them make the most of the bountiful opportunities that globalization unveils. “You have to be aware of the impact of globalization upon a client’s life,” Deedes says. “It’s an ongoing theme and I expect to have more international clients going forward.”

Helping people in mixed marriages (European Union citizens married to U.S. citizens, for instance) and Britons who have been working overseas for many years and are looking to retire back home, has become an important part of Deedes’s work. Managing their money effectively means that he’s not only continually seeking out investment opportunities around the globe, but that he also needs to know about the regulatory and tax regimes that characterize individual countries. As such, Deedes’s contact with overseas advisors has increased and he believes that cross-border dialogue between professionals will continue to gain momentum.

Even as globalization has opened up the world of cross-border investing and money management, individuals will only be able to realize its full potential if countries support globalization with the right kind of regulatory systems that allow individuals to take advantage of opportunities in different parts of the world from an investment and tax perspective, and also safeguard them against downturns.

Take India, for instance, where mutual funds continue to experience enormous inflows on account of the bull run in the stock market over the past four years. India’s mutual fund industry is governed by one of the best regulatory frameworks in the world, says Uma Anand Iyer (no relation to this writer), Mumbai-based head of India research for consulting firm Cerulli and Associates, and as the Indian economy has boomed, many international funds have been able to invest in India and take advantage of opportunities there. Yet there has not been too much capital flowing the other way, Iyer says, so to promote this flow and allow Indian citizens to take advantage of opportunities in other markets, Iyer argues that Indian regulators need to relax some of the regulations governing cross-border funds, such as getting rid of the differential tax treatment between equity and fixed-income funds and allowing for the introduction of new products. “Despite the enhancement of cross-border limits, Indian investors have [also] been parochial and chosen to concentrate on huge returns in domestic markets rather than look outside,” Iyer says. “We expect this to change, albeit slowly, as volatility in the Indian stock markets make investors question whether they can get better returns elsewhere.”