‘I’ve moved back to Britain – what do I do with my expat cash?’

Peter Crichton wants to know which fund shop to use. Jonathan Jones finds out

Choosing a fund shop to invest with can be confusing enough but for expats moving back to Britain after years of working overseas the process of repatriating savings can be an additional challenge.

After more than 15 years of travelling the world with his wife in their Land Rover, Peter Crichton is facing this problem. Between 1990 and 2005, they worked in the Middle East, maintaining an investment portfolio in Hong Kong. They are now settling back into their home in the East Midlands and have decided to bring their cash back to Britain.

Mr and Mrs Crichton will do this at a steady pace over the next five years but with a “significant” sum to transfer there are a number of things to consider.

Minimising tax implications such as capital gains payable during repatriation will be key to making sure that they keep as much of their hard-earned wealth for themselves. They intend to invest the money, but knowing which funds to buy and through which investment shop presents another hurdle.

Mr Crichton said he wanted to invest in funds bought through brokers but was unsure which would suit his particular needs. He intends to invest for capital growth rather than income and plans to split his pot equally across four funds.

“All of my investments will be long term, so I will own them for a minimum of five years. However, over time I will sell some down and repurchase them to realise capital gains so that I am not left with an unexpected tax bill if I should need to sell a lot at once,” he said.

Mr Crichton also has other criteria in mind. First and foremost is the availability of information about each potential investment available through the fund shop.

Second is that someone from the fund shop is available on the phone to assist with trading administration when needed, and third is that important documents, such as monthly portfolio statements, are sent out regularly.

Mike Barrett, of consultancy The Lang Cat, said:

When a financial adviser selects a fund shop for their clients the regulator requires them to conduct research and due diligence to ensure the one they choose is the most suitable available.

This process of thinking about what you need and then researching the market is something we would encourage all investors to do and in this instance Mr Crichton has a very clear idea of what he is looking for. The good news is that from here it should be reasonably straightforward to find the perfect match.

Based on his criteria, I think the most important aspect to consider in this case is cost. When investing large sums such as Wheels of fortune: Peter Crichton, left, has travelled the world in his Land Rover this, a fixed-fee platform model is always going to be significantly cheaper than those that charge a percentage fee. Based on the size of his pot, using a fixed-fee model such as Interactive Investor – which charges £120 per year – could result in a saving of more than £10,000 per year after the final amount is transferred. Anyone planning to invest anything over £50,000 a year is better off choosing Interactive Investor over a percentage-based model. Functionality and support are also important considerations for Mr Crichton but all of the major fund shops will offer the level he requires. Service is a harder aspect to measure, as it can be very personal and subjective. If it is of the utmost importance I would suggest Mr Crichton conducts a short telephone interview with the brokers as this is their chance to introduce a named point of contact who will be able to provide ongoing support if he decides to become a customer.

Arlene Ewing, of wealth manager Brewin Dolphin, said:

When repatriating money from overseas, the exchange rate at which it converts into pounds is critical. Given the large amount Mr Crichton is moving, he should make every effort to protect himself from negative exchange rate shifts, particularly as the pound has been quite volatile recently thanks to Brexit and the coronavirus outbreak.

He should shop around for the best rates and avoid sending across money during times when the pound’s value falls against the dollar, which is the currency he is converting.

Once the money is in Britain, as the couple are British residents they can immediately shelter £20,000 each in Isa investments annually, which we would encourage them to do. They would also benefit from other reliefs including the Capital Gains Tax allowance of £12,000 per person per year.

If Mr Crichton is holding the cash through a fund shop or in a current account for a period he should consider spreading this among multiple providers, as the Financial Services Compensation Scheme protects only £85,000 per provider.

‘When investing large sums such as this, a fixed-fee platform is always going to be significantly cheaper than those that charge a percentage fee’