There are 25 million to 40 million people who live in one country but keep assets in another, says Andrew Fisher, CEO of Maxim Global Wealth Advisors, an independent investment advisor. And he says that this $6 trillion market is being overlooked by many financial advisors.
These might be Americans living and working abroad, people from other countries living in the United States or international families with assets in the U.S.
Globalization is driving the world, which means the population of “cross-border” residents is growing. But there are complications involved with taxes, buying and selling real estate and planning for retirement when the destination is unknown, so many advisors have not targeted this group. If they are Americans married to non-Americans or those with dual citizenship, it can further complicate the financial picture.
“The world of these people is complicated, and they are looking for help,” says Fisher, whose firm focuses on clients with these global financial lives. The advisor who is aware of the problems they face will have an advantage.
Maxim Global recently issued a white paper, “The Growing Opportunity in Cross Border Wealth Management for Independent Financial Advisors,” to highlight the need for advice in this area.
“Most cross-border professionals with a connection to the United States feel extremely frustrated with the unique complexities brought on by a worldwide tax system they are subject to,” says the report.
Most investment firms and large banks avoid this market because they are not equipped to deal with these unique situations, and many custodians refuse to accept accounts for this population, Fisher says. Because of these structural issues, this underserved segment presents a compelling opportunity for independent advisors who can partner with firms that specialize in these topics.
An advisor does not have to know all the answers to the most complex questions, but he or she needs to know the issues, such as coordinating 401(k) and other international qualified accounts, managing risk tolerance and analyzing stock options and equity compensation. If an advisor is aware of the issues, he can be an attractive partner for a person with cross-border ties, Fisher says.
Maxim Global advisors are told to seek three opinions on any question they are exploring because so few people know answers to the complex questions, Fisher says.