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Financial Planning > Tax Planning

Global Observation

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In my last two articles, I laid out the patterns of globalization that are affecting the financial planning profession. In this final installment, I will share the results of two surveys I developed to find out how advisors are preparing to serve international clients.

In my first survey, I began by asking U.S.-based advisors if they are aware of the International Standards Organization (ISO) standards for financial advisors. ISO 2222:2005 was created to provide an agreed-upon set of requirements for financial advisors around the world. The program is voluntary, but the respect for ISO standards in many industries has led to predictions that ISO will form the baseline for licensing of financial advisors as more countries formally recognize the profession.

Half of the advisors who responded to my survey said that they are aware of ISO 2222:2005. About 60 percent had implemented (or are in the process of implementing) the standards. These responses indicate to me that there is a growing awareness of international standards and of the potential for serving international clients. Many advisors have already seized opportunities or are positioning themselves to appeal to clients from outside their home countries.

Several respondents noted the strong correlation between the ISO standards and the CFP requirements. This wasn’t surprising, given that 85 percent of my survey respondents have earned the CFP mark of distinction. Yet it also reflected the accurate perception that ISO standards track the CFP requirements very closely.

These responses lead me to Observation No. 1: CFP holders are well-positioned to provide the comprehensive, high-quality services that are expected by increasing proportions of consumers around the world. More than one survey respondent argued that having a CFP is sufficient for an advisor seeking global credibility. “The standards required to hold the CFP mark are much more rigorous and also recognize the fiduciary relationship that is required in service to a client,” wrote Thomas Fischer, an advisor in Cambridge, Mass.

In my second survey, I asked how advisors are working with international clients today. I did not get a huge response, which leads to Observation No. 2: Globalization, in the sense of advisors working with clients worldwide, is still more promise than reality.

Observation No. 3 comes from the description of typical international clients shared by survey respondents. In most cases, international clients are business executives, teachers or missionaries who have multi-year assignments outside of their home countries. In other words, they are people who have to maneuver in more than one country’s financial system for a limited period of time. These people seem content to have their current trusted advisor see them through the complexities.

The related takeaway observation is that advisors will have international issues thrust upon them, whether they seek them or not. Some clients will live and work overseas for a period of time. They will come to you for advice — and you need to be prepared to provide it.

According to the survey, the primary services that international clients are seeking include:o Lowest-cost, most efficient ways of changing money from one currency to another and transferring money from one country to another o Hands-on management of their financial affairs and investments while they are not in their home countryo Tax returns and tax exemptions

Clients’ needs were similar, whether the advisor said he or she was serving U.S. citizens who were living abroad, or was serving citizens of other countries who were living in the U.S.

Thus, here is Observation No. 4. Some services (such as transferring money) seem fairly easy to learn to provide. But some services (such as tax strategies) seem highly specialized, and probably should be outsourced to an expert in a particular nation’s laws.

Confirming this observation, survey respondents unanimously warned against trying to do too much for international clients. They said cooperation with other experts is the better solution. “I suggest that the client select an advisor from each country and then authorize both advisors to work with one another via telephone and e-mail,” wrote Bedda D’Angelo, an advisor in Durham, N.C.

Cooperation Needed”I firmly believe the way of the future is developing strategic partnerships with international practitioners who are experts in their own country and who can provide guidance on a fee or barter basis,” wrote Phil Dyer, an advisor in Towson, Md.

Cultural sensitivity is part of the mix, as would be expected. This comes into play both for working with clients and for developing strategic partnerships with financial and legal experts in other countries. Non-Americans need help learning our cultural norms just as much as we need help to learn those of another country. Leon Rousso, a Ventura, Calif., planner, described trying to explain to his Canadian clients living in the U.S. what they would have to do to obtain healthcare services in our private, market-driven system. “They [did] not believe what I was telling them,” he wrote.

While my surveys were hardly comprehensive, I think they help to paint a picture of where we stand on the globalization of our profession and the services we provide. Despite the globalization of finance, media, communications, and almost every aspect of the macro-economy, we have not yet reached the point where most financial advisors are looking for clients abroad. This is understandable. There are many clients within an advisor’s main geographic territory (however that’s defined), and it makes sense to pursue those prospects first.

However, it’s hard to avoid international issues forever. As Leslie Beck, an advisor in Palo Alto, Calif., stated, “I don’t seek international clients, but they come to me through referrals.” An advisor might start by working with a new client who has accumulated investments in non-U.S. equities or bonds. Next, a client who wants to rent a villa in Tuscany for six months or purchase a second home in Costa Rica might ask for assistance. Later, an advisor might have to revise a financial plan for a business executive who is being posted to a corporate office in Hong Kong for three years, and find a tax preparer who can handle the executive’s returns.

In Beck’s case, a lot of people from India and China have come to work in Silicon Valley, but do not necessarily plan to stay or want to become American citizens. “I have a client from India and one from Italy that have lived here over 10 years and may or may not become citizens. They are here for jobs and experience and stay because it is a beautiful place to live, though it is very expensive,” Beck says.

Dyer says that in the last two years, he has provided services to Romanian, Italian, Dutch, English and Moroccan clients. He has also developed working relationships with financial advisors in Holland, England, Australia, Singapore and Italy.

Small WorldThese scenarios are becoming common, rather than rare. International issues will come to an advisor’s door — whether the advisor seeks them or not. This is a natural development of a robust business that attracts a client base of people who might move overseas or have non-U.S. business colleagues, friends and relatives.

Bottom line: The world is shrinking. CFPs are in a great position to provide clients with the assurance that they can handle the complexities that arise for clients who have financial affairs in more than one country.

If you want to go the extra mile (or kilometer), then consider adopting ISO standards. This will add another layer of trust for clients who live outside the U.S. (as well as for the business partners you will need to find to deliver services to U.S. clients living abroad). Ultimately, success in the financial planning business hinges on convincing clients that you are living up to high standards of education, training and conduct. Meeting globally recognized standards such as the CFP and ISO can contribute to your success.

Marie Swift is the president of Impact Communications, a marketing and communications firm for independent advisors; see


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