South African investment meets global opportunities

ARTICLE WRITTEN BY DUANE NICHOLLS CFP®

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Liberty recently sharpened its pencil by taking its Offshore Investment Plan to the next level; boasting features such as affordable entry levels, no early termination charges and a revised cost effective structure, making it a great investment strategy with benefits.

Through Liberty’s partnership with STANLIB Asset Management and Standard Bank, Liberty is able to offer investors access to leading companies and industries from around the world. Hence, investors are now afforded luxuries such as travelling or retiring abroad; benefits from tax advantages; protection against currency fluctuations; diversification of investments; and most importantly a guard against uncertain economic policies. 

Investors are often faced with the questions:  “How suitable is an offshore investment for my portfolio? “and “What risks could I potentially face?”

Liberty has answered these questions by offering the investor a range of portfolios that cater to each individual’s risk appetite. These portfolios have substantial history and detailed fund fact sheets, ensuring that the investor is equipped with enough information to make an informed portfolio choice. Each fund fact sheet is categorised into risk profiles and asset class profiles for easier understanding of the portfolio characteristics.

Raging Bull winners STANLIB, in partnership with Brandywine Global Investment Management, Columbia Threadneedle and Fidelity Worldwide Investments, host collectively over R12,5 Trillion worth of assets - clearly indicating its vast experience and knowledge in asset management.

If you are still not convinced an Offshore Investment Plan as part of your strategy, here are some key elements to sway you.

·         ADVANTAGES OF AN ENDOWMENT

Investment choice: Your client can choose from a wide range of offshore investments and portfolios.

Tax:  The investment is taxed in the hands of the life company.  This is incredibly beneficial for a high income tax earner who is taxed at +30% because the life company’s tax rate is capped at 30%. 

Estate planning: Your client does not need a separate Will for their offshore assets. If your client nominates a beneficiary, the proceeds are paid directly to the beneficiary upon their death and therefore there will be no executor’s fees payable on the proceeds.

Tax free withdrawals after year 5: The endowment policy becomes open ended after year 5 and any withdrawals taken are net of taxation.

·         BENEFITS TO INVESTING IN AN OFFSHORE ENDOWMENT

Your client will have access to investment opportunities that are not available in South Africa.

This product could be used as a stepping stone for immigration or retirement in a different country.

Diversification of your client’s investment portfolio

Investing money for future expenses – your client can afford to educate their children abroad or take frequent trips overseas.

Hedging against the depreciation of the Rand.

Offshore Investments can be paid out anywhere in the world provided all the legislative requirements have been met.

To summarize, there are a couple of key consideration to taking money offshore…Your client’s needs and personal circumstances have to be taken into account; Consider the costs of the different investment vehicles; Ensure that the offshore investment is cost competitive and transparent. And finally, think about timing - offshore investing is not a short term investment, but should rather be part of a more disciplined long term investment strategy.