Expand Your Horizons: A Guide to International Financial Planning

International planning isn't just an option anymore; it's a necessity for anyone looking to make their mark on the global stage. Understanding the complexities and garnering the necessary skills for international financial planning is crucial for advisors in a modern market. 

Working with clients who have international financial interests can be a challenge for financial planners. However, having the right toolset and education enables you to guide clients in reaching their wealth management goals in the U.S. or abroad. Asset-Map helps simplify financial overviews and planning by providing an easy-to-read report with visualizations of a client’s financial picture. 

In this article, we’ll discuss international financial planning, key considerations for advisors, how to build a global strategy, and more. Read on to equip yourself with the knowledge you need to get started.

What is International Financial Planning?

International finance planning involves guiding an individual or organization in developing financial strategies that span multiple countries. International financial planners specialize in providing advisory services that include foreign investments. CFPs should consider the various financial systems, tax implications, currencies, and more when providing financial advice to American expatriates to optimize financial outcomes. 

From cross-border investments and bank accounts to expatriate retirement planning across different jurisdictions, international financial planning takes into account an individual or organization’s goals and views them on a global scale.  

Developing financial services that utilize a global perspective can be intimidating. Asset-Map simplifies complex portfolios by helping you and your clients visualize and manage diverse asset classes and currencies. 

Key Considerations in International Financial Planning

When working as an international financial planner, you must consider a wide variety of different factors affecting the financial decisions you make, including:

  • Regulatory Environment: Understanding different countries' regulatory frameworks and financial laws is a crucial part of cross-border financial planning. 

  • Tax Compliance: International tax compliance demands a deep understanding of complex regulations like FATCA and CRS to ensure adherence to global and local tax laws.

    • FATCA: The U.S. Foreign Account Tax Compliance Act is a regulation requiring foreign financial institutions to report U.S. citizens’ account information to the IRS.

    • CRS: The Common Reporting Standard combats tax evasion by mandating the automatic exchange of financial information between participating countries.

  • Risk Management: Risk management, including currency and geopolitical risks, is also part of international financial planning. 

    • Currency Risk: Investment strategies such as hedging and diversification should be used to mitigate the risk of fluctuations in currency and exchange rates affecting the outcomes of financial products. 

    • Geopolitical Risk: When creating financial plans, the key is to craft adaptable strategies for international policy changes, economic sanctions, and political instability. 

Building a Global Financial Strategy

To create a robust international financial strategy for a client, you must:

  • Explore their goals. Speak to your client about their overarching financial goals and how international financial planning can benefit these goals and their financial life.

  • Diversify investments. Take a diversified approach to asset classes, currencies, and regions to spread risk and help optimize returns on investment accounts.

  • Monitor regulatory and tax implications. Tracking recent changes in regulations and tax environments worldwide allows you to protect your clients' interests and investments.

  • Focus on risk management. Service providers should manage risk effectively by adapting to uncertainties that could impact returns or financial outcomes.  

  • Plan for retirement. You may consider working with your client to prepare for retirement, taking into account different countries’ retirement account options, pensions, and more.

  • Maintain clear communication. Keep open lines of communication to best serve your client when international financial planning. 

Asset-Map’s features help financial advisors visualize domestic asset allocation and help investors track their progress toward financial goals. With clear visual features, you can stimulate better conversations with clients to further engage them in the financial planning process. 

Tools for International Financial Advisors

Fortunately, there are a plethora of tools and resources for advisors interested in international financial planning, including: 

Software and Tools

Tools like Asset-Map can help financial advisors and CFPs create more engaging and productive client meetings through clear and compelling visualizations. These visualizations empower and encourage clients to participate actively in financial planning sessions. Our platform can also streamline data management and analysis to free up time for advisors to focus on developing strategic plans. 

Educational Resources

Gaining experience in international financial planning requires learning from educational resources such as certifications, courses, books, and blogs. Here are several educational resources for financial planners interested in adding international financial planning to their service offerings.  

Certifications and Courses

  • The Global Financial Planning Institute offers several fully online courses to help financial planning professionals learn about cross-border planning, foreign exchange, regulations, and more. 

Books on International Financial Planning

Helpful Websites and Articles

These educational resources can help you grow your knowledge of international financial planning. 

Professional Networks

International finance professional networks such as the Institute of International Finance (IIF) offer support and knowledge-sharing opportunities to financial advisors. Connect with fellow international financial planners via global associations or LinkedIn to share knowledge and learn from other professionals in the industry. Additionally, networking is a great way to receive referrals for your practice.

Overcoming Challenges in International Financial Planning

Challenges in international financial planning include:

  • Complicated regulatory environments. One of the biggest challenges is navigating different countries’ regulatory frameworks. Ensuring compliance in various jurisdictions is a complex and time-consuming pursuit. 

  • Tax implications. International tax treaties, local income tax laws, and PFIC, FATCA, and CRS reporting requirements make for a complex tax understanding. Being aware of cross-border tax implications is critical for proper planning. 

  • Currency risks. Engaging in hedging strategies and diversifying portfolio investments helps negate fluctuations in currency exchange rates and their impact on returns for non-U.S. investments. 

  • Geopolitical risks. Regularly evaluating geopolitical risks helps manage uncertainties and prepare for political instability.

  • Legal compliance challenges. Complying with various countries’ legal requirements and regulations for financial transactions requires careful planning.

  • Estate and succession planning. Navigating inheritance laws and succession regulations takes skill and precision when creating a cross-border estate plan. 

  • Economic volatility. Global economic conditions strongly affect international markets. Diversify investments and build a risk management plan to withstand market fluctuations. 

International financial planning isn’t a walk in the park but there are certain strategies that help clients overcome challenges. Advanced tools like Asset-Map facilitate seamless management of complex financial planning scenarios. Exceed client expectations and share in-depth visualizations with Asset-Map. 

Expand Your Practice with Asset-Map

While Asset-Map focuses on domestic financial planning, we understand the value of international services in today's complex financial landscape. By mastering international financial planning, you can differentiate your practice and attract new clients. Outside of the United States, the Asset-Map Platform is available to financial professionals in Canada, the United Kingdom, and South Africa. 

Leverage Asset-Map's powerful tools to streamline your domestic planning process and enhance your service offerings. Explore additional resources to expand your knowledge and capabilities in international financial planning.

TJ Hill