The Relocation Hub – Key Relocation Services for Consideration

Once you have decided to relocate and make the move abroad, the most beneficial decision you can make is to choose a relocation service company that specifically focuses on relocating expats abroad.

Here are some key relocation services that you may want to consider.

·       Transport and removals: Your valuable items and furniture should be transported by a professional company, this will ensure your effects are packed and handled with care.

·       Pet Transport: There are regulations that must be upheld, so choosing a company with experience and know how will ensure you have the right documents and vaccinations.

·       Vehicle Transport: Many expats chose to take their vehicles to their new abode, this requires documents and in some cases import tax.

Once you have arrived at your new location, you may want to look around for services on hand, or you may decide to arrange certain services so that when you arrive you have everything arranged.

Here are some key services that you may want consider.

·       Visas & Immigration: It is imperative that you have the correct documentation for the country you propose moving to, this includes the entrance visas, if required, and resident permits. If you are going to work in that country, either for a company or self-employed, you will need to know the correct procedure.

·       Legal Services: It is vital that you have a lawyer that speaks your language. You may be purchasing a home or living in rented accommodation, maybe you are buying a business or want to prepare a Will of Testament, whatever legal transactions you require a recommended lawyer is always the best solution.

·       Schooling: Each family has its own ideas on how they would like their children educated. Most European countries have international junior and senior schools and for further education, colleges and universities. You may however choose to educate your child in a local state school at the beginning, this will help them integrate into the country and learn the language first hand.

·       Language: Learning the language of the country you propose to live in is vital, not only will this help you with every day’s tasks, it will benefit you to integrate into your new way of life. There are private groups of languages classes, private classes and classes provided by the local town halls.

·       Medical Services: You may be entitled to the state medical health service depending on your status. However, most expats chose to use a private medical company too. Most companies offer a family pack and some offer worldwide cover. In some countries you will be required to have private cover for the application of residency.

·       Banking & Foreign Exchange Services: When you arrive in your new home, you will have costs to cover, and need to be prepared. So opening a foreign exchange account with funds ready to use is a practical and money saving service that is vital for everyone who wants to avoid the high commissions charged by banks.

·       Property Management: A relocation company will be able to recommend a company to suit your needs, this may include renting out a property you have bought for investment purpose, gardens, pools and general maintenance.

For professional advice - contact The Relocation Hub

Blevins Franks Financial Tips - Protecting your Financial Security Through Retirement

Retirement can last 30 years or more. To help us enjoy these well-earned years and have peace of mind, we all need to plan ahead, build up our savings and then protect them for our long-term future.  While the earlier we start doing this in our careers the better, it gets more important the closer we get to retirement.  And we need to continue taking steps to protect our retirement savings even after we’ve started drawing our pensions, regularly reviewing our arrangements to ensure we continue meeting our retirement goals. 

Before retirement
As retirement begins to get closer, it’s time to start planning how you want to spend your golden years and ensure you are on the right track financially. There may be steps you can take today to help make your retirement goal a reality.

 Questions to ask yourself include:

·      Will I be able to afford to retire when I want to?

·      What is the best strategy for withdrawing from my business or employment?

·      What options do I have for my pensions? Are they likely to change?

·      Will I be able to retain my existing wealth and assets?

·      Do I want to spend some or all of my retirement abroad?

Let’s say that you plan to retire within the next few years and move permanently to France. You may have concerns about whether you can afford your preferred lifestyle without having to sell existing assets. Perhaps you have a business to sell and are unsure how best to convert your years of hard work into a retirement nest egg. Then there are the complex residence and tax implications of living in a different country.

 Professional financial advice can prove invaluable here, especially with an adviser who understands France and can provide cross-border advice covering both countries. A good adviser will take a holistic view of what you have – your savings, investments, assets, pensions – together with what you want – your income requirements, estate planning wishes – and an objective assessment of who you are – your circumstances, timeline, goals, risk appetite – to design a personalised retirement plan for you. 

After retirement 

Being retired doesn’t mean you can forget about retirement planning. 

Regular reviews allow you to adapt your strategy to suit your changing circumstances and goals, such as incorporating new family members, addressing health issues or relocating. It enables you to keep up with the ever-changing tax and pensions landscape, including new opportunities that could work in your favour.  

 You also need to keep protecting your savings and retirement income from inflation. As the cost of living rising, the value of your money falls, so that in the long-term you could have considerably less spending power than you have today. 

 Your pension options

 Pensions are usually the foundation of retirement, so deciding what to do here may be one of life’s most important financial decisions. Pensions are complex, and with so much choice available, you must take great care.

 You might benefit from consolidating several UK pensions into one to provide a coherent, more cost-effective investment platform for your retirement income, but first establish what would be the most tax-efficient approach for a France resident. Receiving pension income in sterling also exposes you to conversion costs and exchange rate risk.

 Many British expatriates have chosen to transfer their UK pensions to a Qualifying Overseas Pension Scheme (QROPS) which have provided flexibility to take income in euros, more freedom to pass benefits to chosen heirs, and protection from further UK lifetime allowance charges.  But pension rules frequently change so you need to keep up-to-date, and in any case always take regulated, specialist advice before making pension decisions to protect your benefits and establish the best option for you.

 Keep an eye on the UK’s lifetime allowance (LTA). The UK caps how much you can hold in combined pension benefits (excluding State Pension) without paying extra tax. Once your funds exceed the limit, you pay a tax charge whenever you access your money – 55% for lump sums or 25% for income or transfers to an overseas pension.  This also applies to non-UK residents.

Retiring in France

If you plan to retire in France, review your retirement strategy early. You need to consider your residence status and cross-border tax implications and adapt your estate planning to suit France’s different succession rules. 

Careful planning is the key to minimising taxation and maximising the available opportunities so you can enjoy your dream retirement for as long as you need. For the best results, take specialist, cross-border advice.

All advice received from any Blevins Franks firm is personalised and provided in writing. This article however, should not be construed as providing any personalised taxation and/or investment advice.

Blevins Franks Group is represented in France by the following companies:  Blevins Franks Wealth Management Limited (BFWML) and Blevins Franks France SASU (BFF). BFWML is authorised and regulated by the Malta Financial Services Authority, registered number C 92917. Authorised to conduct investment services under the Investment Services Act and authorised to carry out insurance intermediary activities under the Insurance Distribution Act. Where advice is provided outside of Malta via the Insurance Distribution Directive or the Markets in Financial Instruments Directive II, the applicable regulatory system differs in some respects from that of Malta. BFWML also provides taxation advice; its tax advisers are fully qualified tax specialists.  Blevins Franks France SASU (BFF), is registered with ORIAS, registered number 07 027 475, and authorised as ‘Conseil en Investissements Financiers’ and ‘Courtiers d’Assurance’ Category B (register can be consulted on www.orias.fr). Member of ANACOFI-CIF. BFF’s registered office: 1 rue Pablo Neruda, 33140 Villenave d’Ornon – RCS BX 498 800 465 APE 6622Z.  Garantie Financière et Assurance de Responsabilité Civile Professionnelle conformes aux articles L 541-3 du Code Monétaire et Financier and L512-6 and 512-7 du Code des Assurances (assureur MMA). Blevins Franks Trustees Limited is authorised and regulated by the Malta Financial Services Authority for the administration of retirement schemes. This promotion has been approved and issued by BFWML. 

 You can find other financial advisory articles by visiting our website here

Blevins Franks Financial Tips - How Does Inflation Impact Your Retirement Savings?

With inflation surging in both the EU and the UK, now is the time to review your savings and investments to establish if they are suitably structured to provide protection from this threat. Even low levels of inflation can erode your spending power over time and retirees need to plan for this.  

“Inflation is when you pay fifteen dollars for the ten-dollar haircut you used to get for five dollars when you had hair”. 

This quote by American author and humorist Sam Ewing may make you smile, but it is a good example of the impact of inflation over the passage of time and underlines a serious threat to our long-term financial security.

Ronald Reagan used a more hard-hitting description: 
“Inflation is as violent as a mugger, as frightening as an armed robber and as deadly as a hit man”.  

Many people do not realise how damaging inflation is to their wealth over the longer term; it is easy to become complacent after years of low levels. But it is surging in many countries, causing concern among savers and retirees. In fact, you should always take inflation seriously as even low levels impact your wealth and retirement income over time – you may not notice the effects each year until it is too late.  

The impact of inflation 

You cannot just consider inflation rates on their own, you need to compare them to your earnings. If your savings generate a lower return than inflation, the real value of your money is falling and your income will buy less than it used to. 

Put very simply, and ignoring the impact of compounding, if your bank account pays 1% interest but inflation is 2%, after 10 years you will have 10% more money, but the goods and services you purchase will cost 20% more. In real terms you’ll effectively be 10% poorer.  The more time passes, the more damaging it is. 

Official Consumer Price Index (CPI) figures are based on a basket of goods containing a representative selection of items for people across all ages and incomes. It rarely reflects our own personal inflation rate.  As an illustration, a personal annual rate of 4% would reduce the spending power of 100,000 (Euros or Pounds) to around 67,000 after 10 years.  After 20 years it will have lost around 55% of its value and after 30 years your 100,000 would have the purchasing power of around 30,000 today.  

Inflation in Eurozone and France 

Across the Eurozone, the annual inflation rate reached a record 5.0% in December 2021, up from 4.9% in November. A year earlier, the rate was -0.3%. For the EU as a whole it was 5.3%.  The highest contribution to the annual euro area inflation rate came from energy, followed by services, non-energy industrial goods and food, alcohol & tobacco.

France tends to have lower inflation than the EU average and was 3.4% in December 2021.  A year previously it was 0%, but it first hit over 2% in August and has been slowly climbing since, with its Harmonised Index of Consumer Prices reaching 3.4% in November 2021 and maintaining the same rate in December. 

The biggest culprits were energy and petroleum products, but food prices have also seen a sharp increase year on year. 

UK inflation

In the UK CPI reached 5.4% in December 2021, the highest rate for almost 30 years. A year previously it was 0.3%.

In comparison, the Bank of England’s main interest rate was just 0.25% in December, an increase from November’s 0.1%.  It has been below 1% since March 2009.

Will inflation remain high?

Many of the factors behind the current surge are related to the pandemic and expected to be temporary. 

As economies opened unevenly after lockdowns, companies have been struggling to keep up with rapidly rising demand as they rebuild their supply chains.  Shortages of many goods like computer chips and building materials have pushed prices up. 

In addition, electricity prices rose sharply, hitting us both directly and indirectly as businesses pass on costs to customers. 

The Bank of England expects inflation could reach about 6% by spring 2022, but then start to come down. It warns, however, that some prices may remain higher than in the past. 

The European Central Bank also expects inflation to reduce over 2022 as supply gradually catches up with demand, but warns that as the pandemic is unprecedented in modern times this recovery may be different.

One particular uncertainty is wages. Prices and wages influence each other - if wages rise to compensate for higher costs of living, companies may recoup this expense by putting their prices up, so this an area to watch.

Protecting your retirement savings

Hopefully inflation will soon fall back to comfortable levels but, as mentioned earlier, even low levels will affect you by eroding your spending power year after year.  You always need to plan to protect your savings from inflation.

To generate returns that outstrip inflation, you need to invest in assets that historically generate returns in excess of inflation over time. Reduce risk to your capital by working with a wealth management adviser to follow a disciplined investment process:

·      Establish your goals and time horizon.

·      Determine your attitude to risk – your adviser should take you through a suitability process to calculate this objectively.

·      Construct a suitable, well-diversified portfolio to achieve your investment plan and objectives. 

·      Use quality investment managers.

·      Review your portfolio annually to keep it on track.

·      Be patient and stick with your plan – it is time in the market, not timing the market, that is likely to help you achieve your longer-term goals.

If you already have investments but without a carefully designed strategy tailored to your particular situation and appetite for risk, or have not reviewed them recently, look at your financial affairs to confirm if they are suitably structured to provide protection from potential future threats like inflation and taxation.

You need a tax informed investment strategy with the potential to provide capital growth higher than inflation and where your money is legitimately protected from unnecessary taxation. This can be achieved with a diversified investment portfolio, based on your objectives, circumstances and risk profile, held within a tax-efficient arrangement which is compliant in France.

CPI data is based on figures available on 20 January 2022. All advice received from Blevins Franks is personalised and provided in writing. This article, however, should not be construed as providing any personalised taxation or investment advice.

You can find other financial advisory articles by visiting our website here

Blevins Franks Financial Tips - Investing Responsibly - Earning Returns While Helping the Environment and Society

The news was dominated recently by the COP26 meeting in Glasgow and the environmental issues affecting the planet and our daily lives.  It came at a time when many of us were already thinking about what changes we can make to play our part in improving the situation. The topic of ‘ESG investing’ – Environmental, Social, Governance – was highlighted over the fortnight and it is something many investors are keen to explore. 

The November COP26 (26th Conference of the Parties) was a global United Nations summit about climate change and how countries can bring it under control.  Large companies also need to play their part to reduce their impact on the environment, and this is where investors can be selective over which companies to buy shares in.

Interest in ESG investment has been growing noticeably over recent years. Investors are placing greater emphasis on the environmental and social impact of their investments, wanting to make sure the firms benefiting from their capital do not contribute to problems like climate change, inequality etc. They are increasingly seeking to manage to exposure to ESG factors, while generating sustainable long-term returns – responsible investing and performance can be complementary.  

It is estimated that around 20% of global investors have some ESG investments and almost 50% say they are interested. 

ESG investing 

This type of responsible investing prioritises financial returns alongside a company’s impact on the environment, its stakeholders and society.  Here are some simple definitions:

·      Environmental – The impact of a company’s activities on the environment: carbon footprint, greenhouse gas emissions, renewable energy usage, using a sustainable supply chain etc. Positive outcomes include managing resources and executing environmental reporting/disclosure, or avoiding/minimising environmental liabilities such as climate impact or pollution.

·      Social – A company’s impact on its employees, customers, consumers, suppliers and the local community: how employees are treated, racial diversity among staff and executives, LGBTQ+ equality, inclusion programmes etc.  Positive outcomes include increasing health, productivity, and morale, or reducing negative outcomes such as high turnover and absenteeism.

·      Governance – The way companies are run: how does the management drive positive change?  What are its business ethics?  Positive outcomes include aligning interests of shareowners and management, improving diversity and accountability, and avoiding unpleasant financial surprises, such as excessive executive remuneration.

In summary, ESG investing considers how a company serves its staff, communities, customers, stakeholders and the environment. 

These days, most public companies, as well as many private ones, are evaluated and rated on their ESG performance by various third-party providers of reports and ratings. These include Bloomberg, S&P Dow Jones Indices and MSCI.   

Institutional investors, asset managers, financial institutions and other stakeholders are increasingly relying on these reports and ratings to assess and measure companies’ ESG performance compared to peers.

ESG performance 

Investing responsibly does not mean you have to accept lower returns.  

ESG investing is building up a good track record, with noteworthy performance over the pandemic. During the market turbulence and uncertainty, many companies with strong ESG track records showed lower volatility than others  and investors turned to ESG for increased resiliency.   According to US financial services firm Morningstar, the last quarter of 2020 saw record sales of $152 billion and total assets invested worldwide reached $1.6 trillion. 

Analysis by Morningstar also found that, over a decade, 80% of equity funds investing in sustainability outperform traditional funds. ESG funds also show longevity – 77% of ESG funds that existed 10 years ago survived, compared to 46% of traditional funds.  

Investment planning 

You do not need to spend hours researching a company’s ESG track record and scores, or comparing its share price with other companies to try and work out which ones to invest in.   As with other capital investments, you can buy funds which invest in highly rated companies. This also reduces risk as it provides much more diversification.  

Apply the same investment principles with ESG investing as with all other capital investments: 

1.     Establish your objectives and time horizon.

2.     Obtain an objective analysis of your appetite for risk. 

3.     Have a mix of assets and sectors in your portfolio to reduce the risk of one area performing badly.  

4.     When considering a new investment, analyse how it fits in with the rest of your portfolio and impacts its risk weighting. 

5.     Conduct regular reviews, around once a year.  

 You can choose to use a financial advisory company that incorporates responsible investing within its advisory services. Some companies now look at ESG considerations, as well as traditional assessments, as a part of the overall investment considerations when assessing suitability of investments for clients.  

So responsible investing does not have to involve more work on your part, and you can invest as you normally would, without compromising returns or your risk weightings – but with the difference being which companies benefit from your investment capital.  You don’t need to focus all your portfolio on ESG funds – indeed, you need a good spread of assets to reduce risk – but it is one step you can take to help protect our environment and society. 

All advice received from Blevins Franks is personalised and provided in writing. This article, however, should not be construed as providing any personalised investment advice.  The value of investments can fall as well as rise, as can the income arising from them. Past performance should not be seen as an indication of future performance.

You can find other financial advisory articles by visiting our website here

Platinum Nanny Tips - 10 Important Considerations that Families and Nannies Need to Discuss, Agree on, and Include in the Nanny Employment Contract

There are many reasons why it is crucial to both the hiring family and nannies that a nanny agreement be put into place upfront. Having a contract allows both the nanny and the hiring family to establish expectations, boundaries, and compensation right from the get-go, alleviating surprises or disappointment down the road for all involved parties.  

The perfect match between families and candidates can be found by both parties being honest, transparent, and upfront about their requirements. To better understand what it is that they seek, families should write a list of the things that they value the most in a candidate, along with a detailed description of the job on offer. Nannies need to consider what their new role will look like to them. For example, if they are looking for a set schedule, they must avoid applying to jobs that require lots of flexibility. Consider past experiences, advantages and disadvantages, and things to avoid in future opportunities. Parties should always be open to negotiation while knowing their deal-breakers!

The Platinum Nanny “Confidentiality and Nanny Agreement”, has been designed to cover all the industry standards and legalities for Monaco and France. We support our clients by assisting in negotiations, managing the offer and agreement process, contract amendments and running the contract through our quick and efficient digital signing platform.  Here are just some of the many things that should be covered by your employment agreement:

 
1.    TYPE OF CONTRACT

What kind of contract is being offered? Is it an interim, temporary, or permanent role and will it be declared in Monaco, France or elsewhere? Platinum Nanny works with an administration partner who can take care of the payroll process for you.

Our Platinum Candidates are professionals and expect to be legally employed by the family. It is becoming less and less common for families to pay their nannies “cash”. Not following the legal process can result in serious tax and legal consequences for families, and withholds vital protections for your nanny, including health insurance, pension contributions, unemployment and worker’s compensation benefits. Additionally, uncontracted nannies are unable to verify their professional income and often struggle when applying for rental housing, mortgages, student, and other loans which can lead to them becoming unhappy in their role quickly, leaving families forced to replace staff which can be unsettling to children and the family as a whole.

 2.    HOURS OF SERVICE

Will there be a set hours of service each week or will the hours and days be flexible or rotate based on the needs of the family? For travel nannies will the schedule change during trips? This section also plans for sick day coverage, how additional hours and days will be handled.

 3.    PAY

This section covers guaranteed hours, expected weekly hours, overtime, annual income, hourly rates, and any bonuses. Will there be additional pay for babysitting or when travelling? Where a nanny does not accompany the family on holiday, will the family require her to work during guaranteed hours at the home to catch up on child-related tasks while they are away? Expenses whilst on duty can also be covered here as can car/mileage, if the nanny is expected to drive the children to school in her own car.

 4.    ANNUAL LEAVE

France uses an annual leave accrual system to work out an employee’s holiday entitlement. You can read more about how this works in Platinum Nanny’s article: https://platinumnanny.com/holiday-accrual-in-france-how-does-it-work/ This section is where families and nannies can agree their requirements pertaining to any holidays to be worked or not. It is also the section where the process for requesting time off for doctors’ appointments and how far in advance holidays need to be booked.

 5.    DUTIES + RESPONSIBILITIES

This section is critical to ensure the hiring family and employee are on the same page. The more detail, the better. For example, light housekeeping to one party might not be the same as the expectations of “light housekeeping” in another person’s mind. Make sure that specific expectations are outlined in your nanny agreement. Bullet points are great. In this portion of your agreement, you can also consider future considerations such as how the agreement will change on arrival of a new baby for example.

 6.    BENEFITS

Benefits can include use of the family’s car, wellbeing days, health club memberships, personal days, private health insurance, professional development, training courses like the Platinum Nanny Pediatric First Aid Courses for example, educational reimbursement, bonuses and any other benefits that the family may be offering.

 7.    CONFIDENTIALITY

Most of our Platinum Nanny families require anyone working in their home to agree to a form of confidentiality agreement or non-disclosure agreement. Platinum Nanny have clauses that we add to our agreements or where required we can arrange a separate more comprehensive NDA for our clients. 

 8.    HOUSE RULES

When working as a nanny in someone else’s home it is important that there is a clear understanding of the house rules and how you will be required to uphold them. Examples include use of electronics, movie watching, use of the internet, any areas that are out of bounds, consumption of processed foods and confectionary, playdates, and sleepovers. 

 9.    AUTHORIZATION TO TREAT

Allergies, diabetes, EpiPen’s. Common sense is a must for nannies. First Aid training is essential. Do they know how to administer an EpiPen? CPR? In order to act fast in an emergency it is important to clarify any important actions and authorizations your employee has. Accidents can happen, a broken wrist, a sprain. It is important that this section clearly spells out any steps that your employee must take where one of the charges becomes ill or is injured. Do they have the authorisation to take them to the hospital and if so, is there a specific hospital or pediatrician that needs to be on the top of the list? Who should they call and when? 

 10. ANNUAL REVIEW

Will performance be reviewed quarterly, bi-annually, annually? Will there be any incremental pay increases? Will an increase awarded in one year create any entitlement in relation to subsequent years? 

 Although these are some of the most critical sections to include in any nanny agreement there are many other important clauses that might be relevant to an individual family’s needs. A Platinum Nanny “Confidentiality and Nanny Agreement” is tailored to each family’s needs and can help families find their Platinum Nanny, and Platinum Candidates their dream family.

Platinum Nanny Corporate Feature - Platinum Care for Families

For more information contact:
Holly Grattan MBA(HR), AMAC
Owner & Director
+33 (0)7 60 03 83 55

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Blevins Franks Financial Tips - Key Elements for Successful Investing – Creating and Protecting Wealth

What do you need to think about when it comes to creating and protecting your wealth as a French resident?

Drawing the analogy between investment planning and gardening may bring a clearer understanding of the important factors to consider, particularly when you have moved from the UK to France – not everything you have previously planted is the best for current circumstances.  

Investment through the various stages of your life has seasons, as does gardening.   What you successfully planted and grew in the UK may be entirely wrong for France. You have to consider your new, often very different conditions if you are to get your plants to flourish and achieve the results you are looking for.  You then need to carry out regular ‘weeding’ to ensure the long-term growth of the plants you wish to develop and sustain for the future.  

This is all a careful process and often involves professional guidance. A locally based adviser who understands and has years of experience dealing with the local conditions will give you the best results. 

In our view, these are the key aspects that you need to address to ensure you obtain the optimum investment portfolio to suit your particular situation:

Tax and succession considerations - choosing the right tax-efficient structure

A tax-efficient structure, such as an ISA or pension plan in the UK, can keep most of your investments in one place and help you legitimately avoid paying too much tax. You want to ensure as much of your hard-earned wealth as possible is placed in the most suitable structure to limit your tax liabilities. At the same time, consider your estate planning wishes so your investment capital can be passed to your chosen heirs as easily and tax efficiently as possible. 

That was perhaps easier to achieve in the UK where we are accustomed to the rules, but here in France with its complex tax and succession regimes and various reforms over the years, it is sensible to take advice from someone who is well-versed in the nuances of the French systems and how they impact your wealth. 

In France, UK ISA accounts are not tax-efficient and the income and gains generated are fully taxable here as investment income – you will currently pay 30% which covers both income tax and social charges. 

There are, however, compliant arrangements available in France, for example, assurance vie, that provide significant tax advantages as well as estate planning benefits.  There are various assurance vie available though, so you need to choose the most suitable for your circumstances and objectives. 

Establishing your risk profile and optimum portfolio

Most of us recognise that for some of our assets, exposure to market movements gives us a better chance of outperforming inflation and producing real returns over the medium to long term. 

However, the starting point has to be to obtain a clear and objective assessment of your appetite for risk. These days there are some very sophisticated ways of evaluating your risk appetite, involving a combination of psychometric assessments and consideration of your investment aims and other assets.  Since this is an emotional issue, you will benefit from third party professional, objective guidance here.

The key is then ensuring your investment portfolio matches your attitude to risk.  Without such a sound assessment being then matched to the optimum blend of investments, you could find yourself with a portfolio that is too risky or too cautious for you.

Another important initial step in ensuring your portfolio is suitable for you is to establish your objectives. Are you looking for income, growth or a combination of the two? What is your investment time horizon?  Your adviser should help you build a portfolio based on both your risk profile and objectives.

Diversify, diversify, diversify

The higher your concentration in one particular investment type or area, the greater the risk. By spreading across different asset types (such as equities, bonds, property, cash) and then across sectors, geographical regions and companies, you give your portfolio the chance to produce positive returns over time without being vulnerable to any single area or stock under-performing.

You can take diversification further by utilising a 'multi-manager' approach to spread your investments out among several carefully-selected fund managers. This reduces your reliance on any one manager making the right decisions in all market conditions.

Regular reviews 

You should then review your portfolio, usually once a year.  As asset values rise and fall, your portfolio can shift away from the one designed to match your risk profile and objectives.  You may need to make adjustments to re-establish your weightings. With today’s challenging and changing climate, reviews are even more important to help control risk and encourage a positive effect on portfolio performance. 

You also need to consider any changes in your personal circumstances, as well as to tax and succession regulations – particularly in France where the annual budgets can introduce significant tax reforms.

Your investment adviser

Choosing your adviser is another key element of successful wealth management. If you are still using a UK-based adviser there are two issues to consider.

Are your financial arrangements tailored for your life in France or are they actually better suited to a UK resident? 

Brexit dissolved automatic ‘passporting’ rights for UK financial services in the EU, so unless they have made other arrangements, UK advisers, banks and financial providers may no longer able to legally service French residents. If you have UK bank accounts or investments, you may be restricted from making changes, such as moving funds or applying for new services, or they may be closed altogether. 

To bring all these guidelines together, take personalised, quality advice from a regulated, locally-based adviser. With the right strategy in place for your life in France, you can help protect and grow your wealth in real terms – not only during your lifetime but for the next generations to enjoy.

This article should not be construed as providing any personalised investment or taxation advice. Summarised tax information is based upon our understanding of current laws and practices which may change. Individuals should seek personalised advice.

Blevins Franks Group is represented in France by the following companies:  Blevins Franks Wealth Management Limited (BFWML) and Blevins Franks France SASU (BFF). BFWML is authorised and regulated by the Malta Financial Services Authority, registered number C 92917. Authorised to conduct investment services under the Investment Services Act and authorised to carry out insurance intermediary activities under the Insurance Distribution Act. Where advice is provided outside of Malta via the Insurance Distribution Directive or the Markets in Financial Instruments Directive II, the applicable regulatory system differs in some respects from that of Malta. BFWML also provides taxation advice; its tax advisers are fully qualified tax specialists.  Blevins Franks France SASU (BFF), is registered with ORIAS, registered number 07 027 475, and authorised as ‘Conseil en Investissements Financiers’ and ‘Courtiers d’Assurance’ Category B (register can be consulted on www.orias.fr). Member of ANACOFI-CIF. BFF’s registered office: 1 rue Pablo Neruda, 33140 Villenave d’Ornon – RCS BX 498 800 465 APE 6622Z.  Garantie Financière et Assurance de Responsabilité Civile Professionnelle conformes aux articles L 541-3 du Code Monétaire et Financier and L512-6 and 512-7 du Code des Assurances (assureur MMA). Blevins Franks Trustees Limited is authorised and regulated by the Malta Financial Services Authority for the administration of retirement schemes. This promotion has been approved and issued by BFWML. 

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Investment Tips with Corporate Partner Blevins Frank - Why Chasing Star Performers Won’t Guarantee Investment Success

While it may be tempting to choose investments based on past performance, this tactic rarely works in the long term. So how can you put your best foot forward as an investor?

Reading about investing, you will usually find the disclaimer ‘past performance is no indicator of future performance’. While this may seem like a standard get-out clause inserted by lawyers, it serves as an important reminder that nothing is certain in the world of investment.

There is a reason we aren’t all making millions on the stock markets! Financial markets are complicated and unpredictable, with no formula you can follow to ensure you will strike big, or even get out more than you put in. It is important for private investors to carefully manage risk, as investment success often comes down to the sheer luck of being in the right place at the right time.

Given this element of chance, it is important not to get swayed by the latest trend and chase good performance. History repeatedly shows that the best performer one year could be amongst the worst the following year. 

Asset class performance

There have been many examples of ‘star’ assets that have soared before dramatically crashing back to earth. The dot.com bubble famously saw US technology stocks in the Nasdaq Index rise five-fold in the late 1990s before falling 77% in 2002, wiping out billions of dollars. Just recently we have witnessed the less dramatic, but nonetheless volatile, fortunes of bitcoin and other cryptocurrencies change rapidly. 

Essentially, there is little long-term benefit in only picking the latest top-performing asset. If you look at which asset type generated the most returns during a year, you would likely see a different star each month. Take 2019 – the year started with North American equities leading the way, only to move over for UK stocks the next month, then European shares before property took the spotlight. May saw Japanese equities ahead, followed by emerging markets, then Asia-Pacific stocks. UK bonds in varying forms took over for the next four months, before the year ended with cash in the lead. 

Over the ten-year period from 2010, no two years followed the same pattern, and one asset class rarely spent more than one month at the top. Without a crystal ball or a time machine, you could not have picked the right winners every time.    

Fund manager performance 

The same is true of ‘star’ fund managers. With hundreds of funds available from different managers, it can be difficult to know where to turn. While many of them seem to offer similar investment opportunities, the difference in performance can be significant… but often temporary.

Let’s say you had invested £10,000 in a UK-listed shares fund over the ten-year period starting 1 January 2010. If you happened to be in the best performing fund over that period, you would have made a net profit of 440%. Meanwhile, investing in the lowest performing fund would have brought a much reduced profit of 49%. Similarly, the best-performing property fund over that period would have returned profits of 227% versus 72% from the lowest.

On the face of it, it looks like you should just pick the best performing fund. But again, choosing a previously successful fund manager is no way to guarantee ongoing top performance. Statistics illustrate how the performance of the top 25% of fund managers tends to weaken over time. Of the 56 managers in the top quarter of performers in 2015, for instance, only four remained the next year. 

A sensible investment approach

So how can you improve your chances of investment success? There are some key principles you can follow to help manage risk and reach your financial goals.

Diversification is crucial. Spreading your investments across multiple areas is the optimal strategy for minimising risk. This should include a range of different asset classes (shares, bonds, cash, property) as well as geographical regions and market sectors. Diversifying in this way gives your portfolio the chance to produce positive returns over time without being vulnerable to any single area or stock under-performing. You can diversify further using a dynamic ‘multi-manager’ approach, which reduces reliance on any one manager making the right decisions in all market conditions.

It is also important to think long term and have patience when investing. As we have seen, chasing good, quick returns rarely succeeds in the long run. Likewise, exiting a market when it dips would lock in your losses and make you miss any rebounds when markets recover. Research shows that ‘time in’ the market – staying fully invested – is a more successful strategy for investors than trying to ‘time’ the market.

Ultimately, of course, you need to make sure your portfolio is matched to your personal situation, income requirements, goals and timeline, alongside your appetite for risk. This is best assessed objectively by an experienced professional who can then build a diversified portfolio with the right balance of risk/return for your peace of mind. 

For the best results, talk to a locally based adviser with cross-border experience who can bring all the principles together while ensuring your arrangements are structured as tax-efficiently as possible for your life in France. 

All advice received from Blevins Franks is personalised and provided in writing. This article, however, should not be construed as providing any personalised taxation or investment advice. 

Blevins Franks Group is represented in France by the following companies:  Blevins Franks Wealth Management Limited (BFWML) and Blevins Franks France SASU (BFF). BFWML is authorised and regulated by the Malta Financial Services Authority, registered number C 92917. Authorised to conduct investment services under the Investment Services Act and authorised to carry out insurance intermediary activities under the Insurance Distribution Act. Where advice is provided outside of Malta via the Insurance Distribution Directive or the Markets in Financial Instruments Directive II, the applicable regulatory system differs in some respects from that of Malta. BFWML also provides taxation advice; its tax advisers are fully qualified tax specialists.  Blevins Franks France SASU (BFF), is registered with ORIAS, registered number 07 027 475, and authorised as ‘Conseil en Investissements Financiers’ and ‘Courtiers d’Assurance’ Category B (register can be consulted on www.orias.fr). Member of ANACOFI-CIF. BFF’s registered office: 1 rue Pablo Neruda, 33140 Villenave d’Ornon – RCS BX 498 800 465 APE 6622Z.  Garantie Financière et Assurance de Responsabilité Civile Professionnelle conformes aux articles L 541-3 du Code Monétaire et Financier and L512-6 and 512-7 du Code des Assurances (assureur MMA). Blevins Franks Trustees Limited is authorised and regulated by the Malta Financial Services Authority for the administration of retirement schemes. This promotion has been approved and issued by BFWML.