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Q1: What is wealth management?

Wealth Management involves services and strategies that can help you achieve your goals and dreams, such as earmarking money for your favorite charity, saving for your retirement and leaving a lasting legacy to your heirs. A wealth management plan will often include wealth accumulation and wealth preservation strategies, as well as wealth transfer strategies. The wealth management services you choose will depend on your goals and the strategies you use to achieve those goals.

Q2: What is "going offshore"?

It is the utilization of out of country corporations, trusts, partnerships, banks, funds, management firms, to legally safeguard assets, minimize taxes, plan for the future and get involved in global investment opportunities.

Q3: What are the primary goals that motivate people to become structured offshore?

  1. Asset Protection: This refers to a preventative strategy to secure and protect wealth against claim-minded litigants, harassment lawsuits, or asset-seizure efforts by malicious individuals or groups;
  2. Estate Planning: This is planning to pass wealth without the inconvenience of a court proceeding and to avoid estate taxes;
  3. Confidentiality: From competitors, adverse claimants and other parties from whom you wish to keep your business interests private;
  4. International Tax Planning: Advantageous use of foreign jurisdictions and their tax rules for reduction of tax liability.

Q4: Do I have to travel abroad to invest offshore?

No. Offshore investing does not mean that you have to live abroad, or even travel abroad. Offshore investing can be done from your own home through qualified professionals who will function on your behalf with reputable offshore banks and professional firms. Investments within your country of residence can be purchased on your behalf from an offshore location.

Q5: What is asset protection planning?

Asset protection planning is the adoption of advance planning techniques which place one's assets beyond the reach of future potential creditors. In our practice, it does not involve hiding assets, nor is it based upon secret agreements or fraudulent transfers. It is based upon proven sophisticated combinations of business and estate planning techniques.

Q6: What is an Offshore Asset Protection Trust?

This is a specific type of trust established in an offshore haven that has strict laws that protect the trust assets from lawsuits and creditors. It provides and enforces total secrecy and protection with regard to trust assets. Asset Protection Trusts protect assets, including inheritances, from any claims including bankruptcy and divorce. Asset Protection Trusts are ideal for people concerned with protecting their assets from lawsuits and creditors and they are excellent structures for International Investing.

Q7: Isn't it illegal to move assets offshore or have "offshore bank accounts"?

There is nothing illegal about moving assets almost anywhere in the world. It is legal to have accounts, funds, reserves, liabilities, assets etc. almost anywhere in the world. When you do not declare assets or profits, that should be declared according to your domestic tax code, you are subject to certain penalties and fines or more. The key elements are if the assets and profits are "reportable items" in that current year.

Q8: Is it safe to place money offshore?

Many financial experts believe that offshore investing when done through reputable companies is actually safer than investing onshore. Higher reserves and greater liquidity ratios are usually found in established offshore financial institutions as compared to their onshore counterparts. In secure offshore havens these problems are nonexistent because of stricter banking laws, lower costs of operation, lower taxation, conservative investment policies, lack of stockholder pressure to maximize profits (which results in higher risk taking on loans and investments), and comparatively lower executive salaries and bonuses in offshore havens. Additionally, further safety and protection of investments and assets against lawsuits and creditors can be achieved offshore.

Q9: Why are international investments and financial products and services typically at higher yields and/ or lower costs than onshore equivalents?

For two primary reasons. First, offshore financial services are conducted in countries which have no or minimal taxation on investment income. Second, offshore financial service provider typically have minimal investment in "bricks and mortar" land, building/offices, furnishings, equipment, overhead, etc, usually needed onshore to maintain the market image and physical location necessary to compete effectively. These are substantial international investment advantages that enable significantly higher yields on investments and lower costs on financial services.

Q10: Aren't offshore trusts for the very rich?

Being very rich is not necessary to benefit from establishing an offshore trust. A trust becomes essential when you have a significant amount of assets at risk. That is when you become a prime target for litigantsand others who want your money.
In fact, it is the middle class, not the super rich who most need the offshore trust. It is smarter to establish an offshore trust before you accumulate considerable riches, because you the trust to protect your riches as you accumulate it. That is when the trust is more valuable. One does not want to establish an offshore trust as an afterthought when you are running from liabilities. You will then have properly pre-planned your wealth protection.

Q11: Can I make better returns through direct stock or property investments?

Investment funds are a good complement to an investor's traditional stock, property and cash portfolio in both return optimisation and risk diversification terms. While it may be easy for clients to access the local stock market, many investors overlook the risk involved in investing in one stock or one market alone. Conservative investors who find direct stock investment too risky may compromise with lower returns from bank deposits without full knowledge of other investment options available. Investment funds are ideal choice for investors who want to benefit from professional management, access to investment opportunities in overseas and specialised capital markets, and risk diversification at affordable minimums.

Q12: Are investment funds risky?

There are many types of funds available ranging from conservative money market funds to more aggressive equity funds. By nature, investment funds are effective in spreading risk as investors' money is pooled into a collective vehicle and invested into various securities.

Q13: Why would I want to invest in mutual funds vs. specific stocks and bonds?

The two main benefits of mutual funds investing are ease and diversification. Each mutual fund has a portfolio manager whose job is to determine which investments to purchase based on the objectives of the fund. Buying a mutual fund gives investors the benefit and ease of utilizing professional investment management services. Also, because the portfolio is made up of a variety of investment vehicles, investors get the added benefit of investment diversification.

Q14: What is Unit Trust?

It is a professionally managed collective investment scheme. Unit trust pools together money of investors sharing common investment objectives into a large central fund. It is a simple and efficient way to invest in a wide selection of stocks, bonds and money market instruments. Investors own "units" of the fund in proportion to their respective invested amount. The units are given a price which reflects the value of the underlying securities in the fund.

Q15: Why should you invest in Unit Trust?

  1. Professional investment management
  2. Diversification of risk
  3. Capitalize on growth opportunities in Hong Kong and overseas markets
  4. High liquidity - your money can be realized through daily or weekly dealing
  5. Safeguard your wealth

Q16: How will I know if mutual funds are right for me?

The first step is to understand what kind of investor you are, i.e. conservative, aggressive or somewhere in between. There are a number of tools to help you identify your investment profile and risk tolerance. After evaluating your investment needs, risk tolerance and investing timeline, you can match your situation with the right fund objective.

Q17: How does compound interest work?

Compound interest is simply the interest you earn on investment gains you have already earned. The longer you hold onto an investment, the more your investment can benefit from compound interest.

Q18: How do I get Real Diversification - and Manage the Risk?

Studies have shown that adding some diversified foreign content may help reduce risk as well as improve performance over time. You can use this to your advantage by choosing offshore and domestic investments for your portfolio. One way you can diversify is by investing in a variety of foreign stocks within a professionally managed mutual fund. A mutual fund investment allows you to diversify your portfolio with a much smaller investment.

Q19: Isn't there a lot of Risk Investing Globally?

Yes. International investing also involves different risks than does domestic investing. Some of these risks include exchange rate fluctuations, different regulatory climates, and the increased potential for political instability. On the other hand, some of the world's oldest and most stable financial markets exist in other countries. And many of the world's largest, soundest, and fastest-growing companies are found overseas.

Diversification can help you manage your risk exposure. Different investments move up and down at different times. Investing in several global industries and geographic areas can help moderate an individual market's effect on your overall portfolio. Most international and global market funds are broadly diversified and so using mutual funds can give you a heard start on your diversification strategy.

Q20: How much of my Portfolio should be in Global Investments?

The ratio between global and domestic investments varies with the needs and plans of each person - and his or her attitude towards risk. Among international mutual funds, it's generally true that the wider the scope of possible investments, the lower the risk. A truly global fund has lower risk because it's more widely diversified than one that looks at just one country or region.


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