Retirement investment managed fund for my Thai partner...?

[mikey88]

Hello...

Anyone who has any experience in this area I’d be grateful to hear from them.

I like my Thai partner to start up some sort of managed fund investment to save for their retirement.

I’d be helping with contributions of course.

The idea would be to start making regular contributions into a managed share fund that’s specifically designed for retirement so that they will have an income after I’m gone.

 

Can anyone who might be doing this or have the knowledge point me in the right direction and recommended a fund..?

 

Much appreciated.

 

Mike.

 

[NancyL]

You're wise to do this.  Many Thai people don't do this or they do it using methods that may not be the best, such as buying land or gold.  Often young working people have the "dream" of owning their own business when they are older and using this business to support themselves in their old age.  Thus, the proliferation of coffee shops and nail salons that are suppose to support someone who has aged out of the more traditional workforce.  Of course, these business usually break-even at best.

 

The government of Thailand realizes they have a big demographic problem and the old model of the elderly being cared for by their children isn't going to apply in the future.  Thus, they offer good tax advantages for retirement savings and businesses often offer retirement savings programs for their employees.  Check what is available at your partner's place of employment.

 

A good place to start is by visiting a good branch of Bangkok Bank or Siam Commercial Bank with English-speaking staff.  They have several options for savings funds that are safe and well-managed.  And they make sense from a Thai tax standpoint.  This article was written to educate a younger working foreigner who intends to remain in Thailand into retirement, but it will give you an idea of what is available for your partner, too:

 

https://www.thaicitizenship.com/thai-retirement-savings/

[1FinickyOne]

2 hours ago, NancyL said:

they do it using methods that may not be the best, such as buying land

my wife has done very well buying farmland... in 15 years value has increased near 4x purchase price w/the added benefit of the family making a living farming the land... 

 

of course, you have to be knowledgeable about your purchases... but land has been a good investment vehicle here.. 

[PatOngo]

7 minutes ago, 1FinickyOne said:

my wife has done very well buying farmland... in 15 years value has increased near 4x purchase price w/the added benefit of the family making a living farming the land... 

 

of course, you have to be knowledgeable about your purchases... but land has been a good investment vehicle here.. 

I hope she's setting up a good retirement fund for you. 

[Surelynot]

Don't listen to anyone here, get professional advice.......however.......there are tax free vehicles for investment depending what nationality you are..... you should 'fill' these before investing anywhere else.

 

If you are British I would use your full ISA allowance and then start a SIPP you can then make use of the governments contributions that will be added to the SIPP.

 

All the above are very easy to do through your own name and your wife can be a nominated beneficiary.

 

I would surf, take your time....look at Hargreaves Lansdown and AJBell....don't rush into anything.

 

I can name funds I have made over 30% in three months (I can also names shares where I have a lost a small fortune).....you will see this term a lot DYOR......Do your own research.......but back it up with INDEPENDENT financial advice from an expert.

[Saltire]

Not an income generator as such, but my wife has one final annual payment to make this year, to complete what I would describe as a 15-year Endowment Policy of some kind. The annual payment is 15k so she will pay in 180k. At first she was talking about it being worth 1m baht on maturity but I have lowered her expectations a little but to be honest I have no clue what she will get. I'd be happy for her if she were correct of course. She did well to think so far ahead. Well before we met just 4 years ago.

 

It's with Bangkok Insurance (not bank) and comes with a life policy of 200k.

 

[KannikaP]

17 minutes ago, Surelynot said:

If you are British I would use your full ISA allowance

Every IFA I speak to tells me this. You get maybe 1.5% pa on GBP 10,000 TAXFREE. That's GBP 150 @ 20% = 3 QUID.

Do it regularly for 50 years and you may have something to talk about.

[phetphet]

23 minutes ago, Surelynot said:

Don't listen to anyone here, get professional advice.......however.......there are tax free vehicles for investment depending what nationality you are..... you should 'fill' these before investing anywhere else.

 

If you are British I would use your full ISA allowance and then start a SIPP you can then make use of the governments contributions that will be added to the SIPP.

 

All the above are very easy to do through your own name and your wife can be a nominated beneficiary.

 

I would surf, take your time....look at Hargreaves Lansdown and AJBell....don't rush into anything.

 

I can name funds I have made over 30% in three months (I can also names shares where I have a lost a small fortune).....you will see this term a lot DYOR......Do your own research.......but back it up with INDEPENDENT financial advice from an expert.

Happy to be proved wrong, but I thought that to qualify for ISA's one had to be a UK resident.

[Surelynot]

2 minutes ago, phetphet said:

Happy to be proved wrong, but I thought that to qualify for ISA's one had to be a UK resident.

True...he can open the account in his name (if he is British) and put what is considered to be her money into it..........of course you do have currency conversions and the problem of trust.....probably not worth the hassle at the end of the day......just a shame to miss out on ISA allowances which are amazing.

 

Maybe one of the reasons for me saying don't listen to anyone on here....especially me!!!!

[Surelynot]

9 minutes ago, KannikaP said:

Every IFA I speak to tells me this. You get maybe 1.5% pa on GBP 10,000 TAXFREE. That's GBP 150 @ 20% = 3 QUID.

Do it regularly for 50 years and you may have something to talk about.

True, but I was thinking of a stocks&shares ISA overtime they will make a fortune........I have bullied all my kids into saving all their pennies into funds.

[GrandPapillon]

21 hours ago, mikey88 said:

Hello...

Anyone who has any experience in this area I’d be grateful to hear from them.

I like my Thai partner to start up some sort of managed fund investment to save for their retirement.

I’d be helping with contributions of course.

The idea would be to start making regular contributions into a managed share fund that’s specifically designed for retirement so that they will have an income after I’m gone.

 

Can anyone who might be doing this or have the knowledge point me in the right direction and recommended a fund..?

 

Much appreciated.

 

Mike.

 

are you asking for a life savings plan invested with Thai listed funds? I think SCB has such a plan where you contribute each month until you reach a capital threshold, and your funds are invested in some fixed income or variable securities.

 

If you have a starting capital, says a min of 10millions THB, you might want to try SCB Wealth Management, but not sure how good their investment salesmen, ooops, I mean "advisors", could do a good job by finding the right securities to invest into.

 

Maybe buy a property instead, might be a safer bet in the long run

[LomSak27]

An index fund, mutual fund. 

[GrandPapillon]

there are a lot Thai and Index funds, some performing very poorly, need to be careful

 

one has a nice dividend, they hold the leases for the BTS, another invest only in the top listed companies with a high dividend yield (5% and above). Again price is everything, so you need to time it right.

[welovesundaysatspace]

22 hours ago, mikey88 said:

 

I like my Thai partner to start up some sort of managed fund investment to save for their retirement.

Most active funds and their fund managers regularly underperform the major indices. In order to find those that outperform, you would need something that your Thai partner and you (and most people) don’t seem to have: time and knowledge. Otherwise you’ll be just handing over your money to someone who gets you less return than a passive fund but charges you a ridiculous fee for it.
 

An exception might be tax benefits, which currently exist for RMF and those new LTF replacements (forgot the name, SPF I think they are called). Even if you want to take those, I wouldn’t put all my money there, as they are only investing in Thai equities, and you don’t want to put all your money into one tiny market (they only give you tax benefits up to a certain amount anyway). 
 

Unfortunately, in Thailand you don’t have access to cost-efficient passively managed ETFs. Try to open an account in your home country (if possible and if you can invest in those funds there) and then regularly transfer money there (for example, earn money for 6 months before making one big transfer to justify the transfer fees). Some people use an online broker like Interactive Brokers (the transfer issue is the same). 
 

 

 

[beau thai]

Bangkok Bank offer mutual funds among which is the Fidelity Technology Fund and the wellington global healthcare-usa based.

 

Both very good high performing funds in sectors I think should continue to do well. (this is not advice!!).

 

We use both and buy automatically on a fixed day and fixed amount each month to achieve 'baht cost averaging' rather than try to beat the market timing- or 'forget' to make a payment.

 

These are not retirement funds as such but we use them to build a pot for that purpose.

 

The branch (left as you leave town) along the road to the rail station has a ground floor car park and upstairs level with investment advisors who are very helpful

[thailand49]

I think this is a good idea but this is Thailand?  Does she actually know what you are talking about?  Many just kind of say " up to you " because it is your money.

They do understand that a market does exist but have no idea how it works the reason they buy Gold! 

 

My niece who has a full scholarship to Stanford University notified her when I'm able to return to the States will close here Trust account and hand here a big check along with a book a complete book for idiots in investing and buying Mutual funds her response why and what is it for?

 

[mikey88]

1 hour ago, GrandPapillon said:

are you asking for a life savings plan invested with Thai listed funds? I think SCB has such a plan where you contribute each month until you reach a capital threshold, and your funds are invested in some fixed income or variable securities.

 

If you have a starting capital, says a min of 10millions THB, you might want to try SCB Wealth Management, but not sure how good their investment salesmen, ooops, I mean "advisors", could do a good job by finding the right securities to invest into.

 

Maybe buy a property instead, might be a safer bet in the long run

That’s essentially what I’m after. I don’t want it in my name I want it in their name. I don’t want any complications with estates and wills.

 

Essentially I want a balanced managed share fund that can run for a long time...maybe 30 years...

 

I’m Australian ....there’s a multitude to choose from in Australia.....but I was looking for ideas or recommendations for Thai ones...

[LomSak27]

1 hour ago, GrandPapillon said:

there are a lot Thai and Index funds, some performing very poorly, need to be careful

 

I assumed they would study to determine which funds to invest in.  

 

Secondly, not considering thai funds at all. BTW I set up an investment for my G, in a Vanguard index fund. She likes it a lot. 

[Thomas J]

On 1/24/2021 at 6:27 PM, mikey88 said:

Hello...

Anyone who has any experience in this area I’d be grateful to hear from them.

I like my Thai partner to start up some sort of managed fund investment to save for their retirement.

I’d be helping with contributions of course.

Mikey88

I was an executive at one of the largest banks in the USA and headed the retirement plan area for the State of Michigan for the bank.  I ran what was called institutional trust.  It managed funds and plans for companies, governmental units, school systems, foundations, and endowments. 

Here would be my recommendation.  First off, it is virtually impossible over long periods of time to beat the stock market average of the S&P 500 or any of the larger total stock market indexes.  Consider that you can invest in lets say the Vanguard or Fidelity Index fund and pay only a couple of basis points in fees.  While actively managed funds charge you upwards of 1% to 2% of the amount invested.  If it is only 1% in 20 years you have to earn 20% more in the managed fund that the index fund just to pay the fee. 

With that said, if your thai partner is not able to manage money following your death, I would suggest you establish a Trust on her behalf.  Any assets you have now can be transferred to the Trust name upon your death.  You appoint a Trustee, typically a bank but it can be a private person, or company to oversee the monies in the account.  You can specify how you would like the money managed.  You can also establish rules for the distribution of the money.  A typical provision is that the trustee has the discretion to provide funds "to maintain the same standard of living for the surviving spouse"  As an example if she needed a car, the Trustee may agree to dispense money to buy a Toyota Camry but not a Porshe.  In effect the Trustee is making financial decisions just as you would if you were still alive. 

You can set up virtually any rules.  You can establish that she receives all the income as it is received, or she receives a fixed dollar amount, or percentage of the account each year.  You can provide safeguards if she remarries or cohabitates that the money set aside for her is not stolen by the new boyfriend.  

What you want is called a Revocable Trust.  Any competent estate planning attorney has the majority of the framework and provisions on their word processor.  You can then discuss protections, investments, and distributions with him/her and they can tailor it just for you. 

Again, the normal rule use to be to invest in the stock market for growth and the bond market for income.  The age old rule was to take 100 and subtract your age.  If you were 20 then 80% would be in stocks and 20% in bonds.  If you were 60 then 40% in stock and 60% in bonds.  Today, that is more problematic given that bonds pay next to nothing.  I would suggest if you are lets say 60 having 60% in an index fund and 40% in a fund comprised of "Aristocrat" stocks.  Aristocrats are stocks that have paid dividends and increased them for the past 25 consecutive years.  Those dividends will be more than bond interest currently plus they increase over time. 

Finally, a huge advantage of a trust is that if you have money in a fund that she can access, her friends and relatives might pester her for money.  With a trust, she can get money as she needs for specific purposes but not to give to friends and relatives.  Also, if you have children together the trust can provide for them following her death.  If you have children from a prior relationship and none with her you can have whatever remains in the trust following her death go to them. 

 

[NancyL]

2 minutes ago, Thomas J said:

Mikey88

I was an executive at one of the largest banks in the USA and headed the retirement plan area for the State of Michigan for the bank.  I ran what was called institutional trust.  It managed funds and plans for companies, governmental units, school systems, foundations, and endowments. 

Here would be my recommendation.  First off, it is virtually impossible over long periods of time to beat the stock market average of the S&P 500 or any of the larger total stock market indexes.  Consider that you can invest in lets say the Vanguard or Fidelity Index fund and pay only a couple of basis points in fees.  While actively managed funds charge you upwards of 1% to 2% of the amount invested.  If it is only 1% in 20 years you have to earn 20% more in the managed fund that the index fund just to pay the fee. 

With that said, if your thai partner is not able to manage money following your death, I would suggest you establish a Trust on her behalf.  Any assets you have now can be transferred to the Trust name upon your death.  You appoint a Trustee, typically a bank but it can be a private person, or company to oversee the monies in the account.  You can specify how you would like the money managed.  You can also establish rules for the distribution of the money.  A typical provision is that the trustee has the discretion to provide funds "to maintain the same standard of living for the surviving spouse"  As an example if she needed a car, the Trustee may agree to dispense money to buy a Toyota Camry but not a Porshe.  In effect the Trustee is making financial decisions just as you would if you were still alive. 

You can set up virtually any rules.  You can establish that she receives all the income as it is received, or she receives a fixed dollar amount, or percentage of the account each year.  You can provide safeguards if she remarries or cohabitates that the money set aside for her is not stolen by the new boyfriend.  

What you want is called a Revocable Trust.  Any competent estate planning attorney has the majority of the framework and provisions on their word processor.  You can then discuss protections, investments, and distributions with him/her and they can tailor it just for you. 

Again, the normal rule use to be to invest in the stock market for growth and the bond market for income.  The age old rule was to take 100 and subtract your age.  If you were 20 then 80% would be in stocks and 20% in bonds.  If you were 60 then 40% in stock and 60% in bonds.  Today, that is more problematic given that bonds pay next to nothing.  I would suggest if you are lets say 60 having 60% in an index fund and 40% in a fund comprised of "Aristocrat" stocks.  Aristocrats are stocks that have paid dividends and increased them for the past 25 consecutive years.  Those dividends will be more than bond interest currently plus they increase over time. 

Finally, a huge advantage of a trust is that if you have money in a fund that she can access, her friends and relatives might pester her for money.  With a trust, she can get money as she needs for specific purposes but not to give to friends and relatives.  Also, if you have children together the trust can provide for them following her death.  If you have children from a prior relationship and none with her you can have whatever remains in the trust following her death go to them. 

 

 

This is good advice for a U.S.-based partner, but not necessarily for one based in Thailand who will remain in Thailand.  I've seen too many Thai surviving partners who end up basically scammed out of their money because they don't understand how to access their U.S. based inheritance.  Remember, he's looking for advice relevant to Thailand, where the rules regarding trusts are very, very different.

[Dante99]

14 minutes ago, Thomas J said:

What you want is called a Revocable Trust.  Any competent estate planning attorney has the majority of the framework and provisions on their word processor. 

Are you familiar with how having a non-resident alien spouse effects the complexity of a Revocable Trust?  I do not think any competent estate planning attorney is up to speed on the issues, few are familiar with it.  It is not the straightforward situation where the spouse is also a US citizen.  US citizenship is not automatic and often not obtained.

[Dante99]

17 minutes ago, NancyL said:

I've seen too many Thai surviving partners who end up basically scammed out of their money because they don't understand how to access their U.S. based inheritance. 

Who are they usuallly scammed by?  

[donmuang37]

Bank savings accounts get you nowhere fast!  The interest is so low you may be "earning" less than the inflation rate!  You should invest in stock mutual funds.  Buy high quality funds and hold. Don't sell when the market goes down and don't check the market every day or you'll go crazy. Here in Thailand, check out Aberdeen Asset Management.  UK company with regional HQ in Singapore.  FYI, I was a stock broker in USA (Series 7 license) with Edward Jones, so I do have profession experience. Retired now.

PM me if you have any questions.  Good luck!

Cheers, Don

[Thomas J]

45 minutes ago, Dante99 said:

Are you familiar with how having a non-resident alien spouse effects the complexity of a Revocable Trust?  I do not think any competent estate planning attorney is up to speed on the issues, few are familiar with it.  It is not the straightforward situation where the spouse is also a US citizen.  US citizenship is not automatic and often not obtained.

It should not have any effect at all other than the non-resident alien would have to pay the income taxes on the trust.  The Trustee would direct payments to whatever country the alien spouse is domiciled in.   I get my pension from the USA but it is then forwarded to Thailand.  Any financial institution such as a bank, major brokerage company, or investment company would transfer money to whatever bank the alien spouse uses. 

[Thomas J]

1 hour ago, NancyL said:

This is good advice for a U.S.-based partner, but not necessarily for one based in Thailand who will remain in Thailand.  I've seen too many Thai surviving partners who end up basically scammed out of their money because they don't understand how to access their U.S. based inheritance.  Remember, he's looking for advice relevant to Thailand, where the rules regarding trusts are very, very different.

I would disagree.  The entire point of the Trust is so she can't access the money.  Prior to his death, the trust is established along with the rules that govern it.  The Trustee then distributes the money as directed in the Trust.  If she is Thai and remains in Thailand, the Trustee is given the banking information here in Thailand.  If she receives a specific amount each month, or a variable amount based on income, whatever the amount, is then transferred to the Thai bank account that is specified.  I would certainly trust banking institutions and trustees based in places like the USA, Canada, Switzerland, Germany or the UK far more than any here in Thailand. 

[NancyL]

1 hour ago, Dante99 said:

Who are they usuallly scammed by?  

They are told to hire a U.S. lawyer and that lawyer charges them a high rate.  They run into issues with not having an ITIN.  Having to file U.S. tax returns, etc.  

 

I think the Thai banks are set up to do this better for Thai people.  

 

If the partner has lived and especially worked overseas in the same country as their foreign partner, then it's a different matter, but nothing beats being able to go to the local SBC or Bangkok Bank branch where the investment fund was established and talking with the people there for the Thai partner.

[Rob Cook]

5 hours ago, Saltire said:

Not an income generator as such, but my wife has one final annual payment to make this year, to complete what I would describe as a 15-year Endowment Policy of some kind. The annual payment is 15k so she will pay in 180k. At first she was talking about it being worth 1m baht on maturity but I have lowered her expectations a little but to be honest I have no clue what she will get. I'd be happy for her if she were correct of course. She did well to think so far ahead. Well before we met just 4 years ago.

 

It's with Bangkok Insurance (not bank) and comes with a life policy of 200k.

 

These are decent nest egg starters with an average rate of return between 3-7% (depending on which policy, etc).   Very simple: pay 15k to 30k once per year for terms of 6 up to 15 years and then in 15 to 30 years- cash out and get a small insurance policy whilst paying.

While I have my main retirement and investments in/from the States, we bought a couple seven or so years ago from Allianz Ayudhya.  We then bought a couple for our daughter when she was born a few years later.  We bought a couple more last year, then my wife decided to go to work selling them... if anyone looking for any information- hit me up, I'll put the Mrs in touch.

[Mayhem11]

As a former legal practitioner, I urge you not to attempt a self managed fund. Most financial advisors are under educated snake oil salesman more interested in run off commissions than providing prudent financial advice. You are much better served by putting up with smaller returns and guaranteed protection of capital of a managed fund.

[Bill97]

1 hour ago, Thomas J said:

It should not have any effect at all other than the non-resident alien would have to pay the income taxes on the trust.  The

I think you are guessing and know several lawyers who would disagree.

[NancyL]

44 minutes ago, Mayhem11 said:

As a former legal practitioner, I urge you not to attempt a self managed fund. Most financial advisors are under educated snake oil salesman more interested in run off commissions than providing prudent financial advice. You are much better served by putting up with smaller returns and guaranteed protection of capital of a managed fund.

I would definitely agree.  Most of the "independent financial advisors" I've known in Thailand are not to be trusted.