Firstly, lets start with, what is an investment platform?
An investment platform is a place where you invest from. You put your money in and choose your investments. These can be based back in the UK or offshore.
When you put money in to platforms and you are using a financial advisor, the financial advisor cannot access your money, by this I mean withdraw it all and go and spend it.
Some platforms are broker or advisor only, and that means that you can only use that platform if you have a broker or an advisor.
The platform will allow you to invest your money into the investments. For example, a really common example is Hargreaves Lansdown.
Where are the investment platforms based?
They are mainly based in tax free and highly regulated banking places an example of some of these places are:
- Malta
- Cayman
- Isle of Man
- Gibraltar
There are more, however, the main point to note here is that these places are not dodgy and they have good banking regulations and are backed by custodians. When choosing a platform make sure that it is in a place that has a good banking jurisdiction and regulation.
Many expats want to invest back in the UK however, although it does have strict regulations, it doesn’t always bring security and it can mean higher taxes on your capital.
Expat Investment Platforms
Ardan International
Isle of Man- Advisor based platform- good investment options cost around 0.5% without advisor fees. A branch of RL360 and a lowers cost (in my option better) than the RL360 PIMS and other high-cost bond options.
Capital Platforms
Luxembourg based. Founded in 2002 in Singapore originally as Boston Direct Management, they have expanded their global outreach across Asia, Europe, Africa and South America. Has a range of ETFs and funds and charges 0.2-1.2% a year.
DBS Securities
Singapore based, good DIY platform low cost, but hard to navigate. Self managed account.
Etrade
A low cost option that is more for stock options. Fees are $6.95 a trade. It is U.S based so are subject to U.S taxes on death as forms part of your estate.
iFast
A self managed platform. The iFAST group of companies is licenced in Singapore through its Capital Market Services Licence and Financial Adviser Licence (also CPFIS registration), Hong Kong with a SFC Type 1 and Type 4, and Malaysia with a Capital Market Services License and FIMM registration. iFAST Financial India Pvt Ltd (India) is an AMFI- registered Mutual Fund Distributor.
No lock-in or early surrender penalties are applied, but in order to move wrappers from elsewhere, e.g. pensions, a wrap account is required. This incurs an undisclosed percentage fee and is tailored to advisers.
Neither the Prestige nor the basic platform are available outside of Singapore, Hong Kong, Malaysia, or India.
Interactive Brokers
Interactive Brokers was founded as a Broker-Dealer in 1977. Consolidated equity capital is at approximately $6 billion, and the firm’s founder, Thomas Peterffy, continues as chairman and CEO. The firm and its affiliates execute nearly 1,000,000 trades per day.
Interactive Brokers Group and LLC are rated investment grade by Standard & Poor’s (BBB+). The platform charges a complex commission structure, with trade costs dependent on your country of residence. Broadly, ETFs and stocks can be traded at a minimum of $4-$8 under the fixed pricing structure.
High volumes of trades are rewarded, but on average, the occasional trader is likely to pay $20 per month according to the site.
Intermaxx
The platform provides access to 900 funds and thousands of ETFs.
Exchange rates on cash are fairly competitive, and there is a low minimum. However, it does not allow for you to hold existing wrappers or bonds on the platform, and can therefore trigger unpleasant tax charges.
Although a wide range of funds is offered free of the initial charge, many contain high total expense ratios, which can eat into your returns. Costs of dealing with stocks and ETFs (5,000 available) are good.
Useful tools such as the ‘Portfolio X-Ray tool’ and Morningstar equity research are included in the platform.
Internaxx can take up to 55% of annual fund management fees in retrocessions, which has been criticised for lack of transparency. Costs of stocks and ETF trades are between €14.95 to €50 (US/CA vs. less traded markets) and up to 0.09% commission. Trading over the phone costs an extra €20.
The most significant cost to expat users seeking a long-term investment platform is the flat fee (replacing the 0.2% pa custody charge). This is €45 if you don’t trade during the quarter, but free if you trade regularly
Investors Trust
A Cayman based platform with locations in Labuan, Portico, it is an advisor based with a range of options their cheapest platforms being the access that can be brought down to 0.5% plus admin fees of 7 USD per month, a good online system.
Novia Global
Novia Global launched to market in October 2015, with a stated aim of bringing the benefits of the latest in online wealth management technology to the key international markets.
The service provides financial advisers, private banks, discretionary fund managers, and trust companies with the tools required to provide their offshore investors with the same high levels of service and choice available in the UK.
Platform One
A UK and international investment platform service. It has been designed to deliver a secure, high-quality investment platform for the UK and international marketplace. Via Platform One, advisers and their clients from around the world can access the benefits of a UK regulated wrap platform.
The service enables financial advisers to consolidate and manage all their high net worth clients’ investments in one place – hence the term ‘wrap’ platform. Platform One offers what looks to be three core services, each providing access to a wide range of products, funds, and services via the platform.
Praemium
Established in Australia in 2001, Praemium is used by financial advisers and investment managers to manage or administer over A$100 billion, or £59 billion worth of investments across 300,000 accounts.
Praemium provides investment platforms, portfolio administration, and CRM solutions. The company has offices in Australia, the UK, Jersey, Armenia, and Hong Kong.
Praemium launched its services into the UK market in 2008, where it is now one of the fastest-growing discretionary platforms available. In the UK the Praemium group is regulated by the Financial Conduct Authority.
Platform costs start at 0.35% and tier down for larger amounts, offering exceptional value for money for the end client.
Raymond James
Raymond James Financial is an American diversified holding company. It provides financial services to individuals, corporations, and municipalities through its subsidiary companies that engage primarily in investment and financial planning.
Additionally, it offers investment banking and asset management services. The holding company was incorporated in 1962 and listed on the NYSE in 1983. Raymond James’ 3 million client accounts (via nearly 7,200 financial advisers) are focused in the US and Canada, although a portion are also worldwide.
Total assets under management amount to approximately $643 billion. Raymond James is an LSE member firm with direct market access. The Financial Services Compensation Scheme (‘FSCS’) currently covers 100% of the first £50,000 of UK investments on the platform. The platform is targeted at financial advisers where management fees, brokerage charges and initial fees are decided by the adviser. If the client no longer has an adviser, dealing charges are high (£27 – £52) and the flat custody charge of 0.5% applies.
For expat investors, costs of transfer of restricted stock (£200 per transfer) to the UK based platform may be significant given the nature of underlying assets within some offshore products.
Saxo Bank’s Platform
Saxo Bank facilitates online trading of over 30,000 instruments, including bonds, futures, FX, CFDs, and stocks.
In terms of the stocks available, Saxo includes over 3,000 ETFs. Prices for exchange-traded products are delayed unless the investor subscribes to the live feed, however, this is of less relevance to long-term investors.
The minimum investment is $10,000. Saxo Bank charges commissions on trades – normally about $15 equivalent, which is where it generates most of its revenue.
Underlying this, custody charges of 0.12% p.a. with a monthly minimum fee of EUR 5.00 will apply. Transfers of stocks to your account outside Saxo Bank incur a €100-€160 exit charge, and no trades for 6 months will mean you incur a $100 equivalent inactivity charge.
Swissquote Ltd
Swissquote Ltd Is the London-based subsidiary of Swissquote Bank and provides forex, index, commodities, and bond CFDs to traders in the European Union.
The company is regulated in the UK by the Financial Conduct Authority (FCA). In addition: Swissquote Financial Services, based in Malta, is an investment services company regulated by the Malta Financial Services Authority. Swissquote Bank MEA Ltd is regulated by the Dubai Financial Services Authority (DFSA).
Summary of Expat Investment Platforms
There are plenty of investment platforms out there for expats, which one is the best for depends on a few factors which are:
- Investment options
- Location
- Taxes
- Fees
When looking at platforms it is important to know the cost of the fees. This must include the advisor if you are using one and any fund fees, this is so that you know what to subtract roughly each year to estimate your profit.
Make sure that you are happy using the platform, the regulations it has on it and the tax implications it could have on you. You want to reduce the taxes and keep the regulations to a good standard.
If you want to speak to me about platforms, please email me and I can arrange a time to call.
