Novia Global is a relatively new platform in the expat market. It is regulated in the UK, under the Financial Conduct Authority, and is also widely sold in Dubai and Hong Kong and various EU countries.
They use discretionary fund managers such as Brooks Mcdonalds, Ashburton Investments and Bordier & Cie.
They offer options which include:
- Multiple currency accounts
- Structured products
- ETFs
- Various other investments
Where services are available?
They have a SIPP and a Global Investment Account. The SIPP is often used in tandem with British expats overseas.
What are the account minimums?
Unlike some other options, the minimums aren’t published on the website, but most people start with at least $10,000 — with $50,000-$250,000 being an average client investment size.
What is the duration of the investment?
Money can be invested and pulled out, without penalty, at any point, depending on the charging structure picked on day 1, and which funds are selected.
Some funds have exit penalties, whilst others, do not.
What are the costs of the platform?
The actual platform cost can be as little as 0.2% a year. Once you add the costs of the advisory fees (and asset management fees) however, and you can be charged up to 4%-5% per year, depending on which options are chosen by the advisor and client.
This is one of the reason why some clients get better returns than others. Client one could be in index-linked investments charged at 0.1%, whilst another client could be in expensive investments with hidden fees.
Many advisors also charge a 2%-3% set up fee as well.
What are the positives of the platform?
The main positives are:
- The technology is good on the platform.
- It isn’t that expensive although that partly depends on the options selected. We will cover that in more detail below.
- The SIPP can be set up in a cheap way — from 180GBP a year but many additional fees can apply.
What are the negatives of the platform?
- Investor 1 could be paying 2x, 3x or even 5x higher than investor 2 depending on the funds picked and charging structure put into place
- No advice is given on the DIY accounts although advice is available on some accounts
- Countless structured notes have a lot of hidden risks and fees
- The fees aren’t that transparent. If you go on the Novia Global website, it isn’t easy to get a straight answer on the fee question.
- You don’t have loads of investment choice on this platform compared to some out there.
- The regulation is a double edged sword. Many advisors will claim that the UK regulation is only a positive. That isn’t true. Such regulation can restrict you a lot.
- Following on from point 6, there have been more bank failures in the UK and US, than countries with lower levels of regulations. So there is no evidence that “government guarantees” work. Moreover, if you wish to have a segregated portfolio, meaning 90% is in conventional assets and 10% in Bitcoin as an example, this won’t usually be possible with UK regulated platforms. In other words, the regulation causes more restrictions and less choices.
What have been some of the best, and worse performing, investments in this platform?
This depends on the time period you pick. In recent years, US markets have done better, with emerging and UK markets underperforming.
That won’t always be the case though.
What can you do if you have a Novia International plan which isn’t performing well?
If you are a client of Novia Internationally and you aren’t satisfied with the returns, there could be two reasons for this. Either markets aren’t performing well, which can’t be helped in the short-term.
In comparison, the second reason is that bad funds have been picked. In which case, it should be much easier to make the account work more efficiently.
Conclusion
Novia isn’t a bad platform in the expat market. However, their fee structure can still be high, and your “mileage will vary”.
What I mean by that is your success will depend on your advisor and your own investment behaviour.
