Investment Advisor - Restricted Job to Foreigners?

[STD Warehouse]

Can a foreigner living in Thailand work as an investment advisor, more specifically in the sole area of giving advise in regards to investment of personal wealth in terms of an individuals portfolio construction of stocks and bonds?

[Mike Lister]

4 minutes ago, STD Warehouse said:

Can a foreigner living in Thailand work as an investment advisor, more specifically in the sole area of giving advise in regards to investment of personal wealth in terms of an individuals portfolio construction of stocks and bonds?

See list below:

 

Most Westerners appear to do that by acting as Freelance operatives and trawl the farang hang outs for potential customers, their reputation generally is the lowest of the low. I've seen some of them in action and listened to their advice, many will try to churn policies and recommendations, just for fees. It's not a good picture.  The problem is the degree to which the profession is largely  unregulated here. Others use a Thai CPA or similar to front their activates and pay a referral fee.

 

 

[STD Warehouse]

5 minutes ago, Mike Lister said:

See list below:

 

Most Westerners appear to do that by acting as Freelance operatives and trawl the farang hang outs for potential customers, their reputation generally is the lowest of the low. I've seen some of them in action and listened to their advice, many will try to churn policies and recommendations, just for fees. It's not a good picture.  The problem is the degree to which the profession is largely  unregulated here. Others use a Thai CPA or similar to front their activates and pay a referral fee.

 

 

 

I could not see it on that list?

[eyeman]

Are you qualified and certified back home to do this, that you can look at transitioning those certifications and registering with whatever the thai version of the FCA is?  Do you have necessary level of professional indemnity insurance to do this work? Required visas/work permit? doing something like this puts you at high risk of dispute, especially if your client later decides they weren't fully aware of the risks. 

 

If not, then as Mike hints at, you're limited to the special economic zone for dodgy foreign financial advisors, i.e. 1km surrounding area of Nana BTS.

 

 

 

[Mike Lister]

4 minutes ago, STD Warehouse said:

 

I could not see it on that list?

Indeed, it is not explicitly stated. The problem is how you perform that work, perhaps as an employee of another company, which requires a work permit. The idea of being self employed as a freelance IFA probably wont fly here, the same way that it might in say the UK.  

[Mike Lister]

2 minutes ago, eyeman said:

Are you qualified and certified back home to do this, that you can look at transitioning those certifications and registering with whatever the thai version of the FCA is?  Do you have necessary level of professional indemnity insurance to do this work? Required visas/work permit? doing something like this puts you at high risk of dispute, especially if your client later decides they weren't fully aware of the risks. 

 

If not, then as Mike hints at, you're limited to the special economic zone for dodgy foreign financial advisors, i.e. 1km surrounding area of Nana BTS.

 

 

 

There's an idea, Nana Farang IFA's, opening hours 7pm to 3 am, office located across from Nana Plaza.

[STD Warehouse]

2 minutes ago, Mike Lister said:

There's an idea, Nana Farang IFA's, opening hours 7pm to 3 am, office located across from Nana Plaza.

seems like the appropriate path to take, will have a load of "massage" ladies outside to lure in the Nana expat high wealth individuals.

[scorecard]

18 minutes ago, Mike Lister said:

See list below:

 

Most Westerners appear to do that by acting as Freelance operatives and trawl the farang hang outs for potential customers, their reputation generally is the lowest of the low. I've seen some of them in action and listened to their advice, many will try to churn policies and recommendations, just for fees. It's not a good picture.  The problem is the degree to which the profession is largely  unregulated here. Others use a Thai CPA or similar to front their activates and pay a referral fee.

 

 

"...and trawl the farang hang outs for potential customers, their reputation generally is the lowest of the low...."

 

Totally agree. Many years back I worked for an oil giant, the company built and operated a giant new oil refinery near Rayong.  For many months during the building of the refinery and the start up we had over 200 specialized farang oil / chemical engineers and computer engineers on site.

 

Quickly there was quite some activity by so called 'investment advisors' swarming the site. Many had got past the front security gate even though there was a big sign 'Investment Advisors (IA) and similar  <and more> cannot enter this site'.

 

There was many incidents of farang IA getting into the main admin. / operations building and just walking into the offices of farang and instantly starting their spiel.

 

In one case a number of farang wives (lived in a western style moo bahn about 3 or 4 km from the refinery receiving phone calls from these IA and or IA knocking on their front door. It was later discovered a farang IA  had been able to steal an internal telephone directory which included work / job / department etc., details and personal details. The police were called, the company phone directory was recovered and the farang involved was quickly deported.

 

In one incident a farang engineer was cornered in his office and the IA gave a spiel about an investment product and pushed the engineer to sign.

 

The farang engineer said 'but what about tax on this product'.

 

Response form the IA 'none of these products is subject to any form of taxation and tax is just not important anyway.

 

The engineer called security and the farang IA was escorted off the site.

 

A couple of years later I was transferred to the company big office in Bkk. One day I was chairing an important meeting with about 20 other employees present (50/50 Thai / farang employees).

 

A farang young lady suddenly opened my office door and walked in and straight up to me any said over the top of my meeting discussion 'Do you have investments for your old age and if not why not?'

 

The young farang lady was probably mid 20s, dressed like a hippie and wearing rubber thongs. My secretary called the building security and she was soon marched out. But as she was leaving she said loudly 'and I can tell your fortune for 5,000Baht'. 

[Mike Lister]

3 minutes ago, scorecard said:

"...and trawl the farang hang outs for potential customers, their reputation generally is the lowest of the low...."

 

Totally agree. Many years back I worked for an oil giant, the company built and operated a giant new oil refinery near Rayong.  For many months during the building of the refinery and the start up we had over 200 specialized farang oil / chemical engineers and computer engineers on site.

 

Quickly there was quite some activity by so called 'investment advisors' swarming the site. Many had got past the front security gate even though there was a big sign 'Investment Advisors (IA) and similar  <and more> cannot enter this site'.

 

There was many incidents of farang IA getting into the main admin. / operations building and just walking into the offices of farang and instantly starting their spiel.

 

In one case a number of farang wives (lived in a western style moo bahn about 3 or 4 km from the refinery receiving phone calls from these IA and or IA knocking on their front door. It was later discovered a farang IA  had been able to steal an internal telephone directory which included work / job / department etc., details and personal details. The police were called, the company phone directory was recovered and the farang involved was quickly deported.

 

In one incident a farang engineer was cornered in his office and the IA gave a spiel about an investment product and pushed the engineer to sign.

 

The farang engineer said 'but what about tax on this product'.

 

Response form the IA 'none of these products is subject to any form of taxation and tax is just not important anyway.

 

The engineer called security and the farang IA was escorted off the site.

 

A couple of years later I was transferred to the company big office in Bkk. One day I was chairing an important meeting with about 20 other employees present (50/50 Thai / farang employees).

 

A farang young lady suddenly opened my office door and walked in and straight up to me any said over the top of my meeting discussion 'Do you have investments for your old age and if not why not?'

 

The young farang lady was probably mid 20s, dressed like a hippie and wearing rubber thongs. My secretary called the building security and she was soon marched out. But as she was leaving she said loudly 'and I can tell your fortune for 5,000Baht'. 

I sat with somebody I knew many years ago, he was desperately short of money and several people were trying to guide him. He'd previously managed to churn his private pension three times and received cash in hand each time from the visiting IFA. He tried for a fourth time and the IFA was perfectly happy to do so because he collecting fees on both legs of the journey, out and then back in again. Things became a bit heated at one point when I questioned the legality of doing this under UK law and his right to advise in Thailand, he simply didn't care.

 

Another tag team pair involved a very affable Australian who held court in Fanny's Bar in Soi Cowboy in the late afternoon/early evening and a "the Brit boss" back in the office who would seal the deals he brought him. There was never any regard for legality or qualifications or any of the things you typically associate with investing and solutions were always the same, one HK based investment company. 

 

It's so dangerous for inexperienced and wannabe expats who see a way to quick money. 

[Etaoin Shrdlu]

Selling securities in Thailand requires a license and I suspect obtaining the license wouldn't be easy or cheap. 

 

Thailand has a reputation for being the home of boiler room operations that swindle people out of their money and only the very foolish would entrust their wealth to someone operating here.

 

This article is over twenty years old, but still gives a glimpse of what goes on: https://www.theguardian.com/world/2001/jul/27/johnaglionby

 

I used to receive unsolicited calls from all kinds of "financial advisors" back in the day. I suspect that a copy of a chamber of commerce directory fell into the hands of these types, or they got hold of a business card.

 

In my opinion, they're in the same category as the Nigerian princes.

[jayboy]

Many years ago an experienced foreign businessman advised me that one should never use a Thailand based personal investment advisor.My subsequent experience supports this view.The vast majority are opportunist and inexperienced and without suitable qualifications or background, primarily motivated by commissions.They are generally an unappealing bunch, the sort of shyster who used to sell time share opportunities.There are perhaps 2-3 firms/individuals based in Bangkok rather more respectable (typically Chamber of Commerce members and financially literate). Personally I would not touch them either: their superficial plausibility, knowledge of the jargon and minor public school (or Oirish) affability in some ways make them more dangerous to the naive investor.

 

Best to stick to offshore advisors.There's a prominent UK firm with a Singapore office that's okay.There might be others but UK has the widest range.

[noobexpat]

The obvious (legit) market in thailand is moving pensions into QROPS. I don't know much about it and it seems difficult to find the clients. In the UK we team up with accountants who make referrals. Its probably how the respectable businesses in asia do it too.

 

Last week i was involved with moving £2.6m for a husband and wife. 

[Mike Lister]

6 minutes ago, noobexpat said:

The obvious (legit) market in thailand is moving pensions into QROPS. I don't know much about it and it seems difficult to find the clients. In the UK we team up with accountants who make referrals. Its probably how the respectable businesses in asia do it too.

 

Last week i was involved with moving £2.6m for a husband and wife. 

I thought QROPS transfers outside of the UK/UE had lost their legitimacy and appeal?

 

https://www.gov.uk/government/publications/qualifying-recognised-overseas-pension-schemes-charge-on-transfers/qualifying-recognised-overseas-pension-schemes-charge-on-transfers

[noobexpat]

2 minutes ago, Mike Lister said:

I thought QROPS transfers outside of the UK/UE had lost their legitimacy and appeal?

 

https://www.gov.uk/government/publications/qualifying-recognised-overseas-pension-schemes-charge-on-transfers/qualifying-recognised-overseas-pension-schemes-charge-on-transfers

 

Not my area ...but typically the likes of isle of man is used for the qrops provider. They are in the EEA which negates the tax penalty your link states. You don’t have to be tax resident in isle of man of course. 

 

And thats about the scope of my knowledge on them! But they are still around, so must be attractive for some folks.

 

[Mike Lister]

Just now, noobexpat said:

 

Not my area ...but typically the likes of isle of man is used for the qrops provider. They are in the EEA which negates the tax penalty your link states. You don’t have to be tax resident in isle of man of course. 

 

And thats about the scope of my knowledge on them! But they are still around, so must be attractive for some folks.

 

Thanks, it's been a long time since I looked at them. I did look years ago and the firm involved wanted far too much money for what looked like form filling and knowling slightly more than me. When I questioned the level of fees, the response came back, "we don't it for nowt"! Enuf said!

[Liverpool Lou]

3 hours ago, STD Warehouse said:

 

I could not see it on that list?

"Brokerage and Agency" covers it, I believe.  And, if they get over that hurdle, they have to be SEC (the industry regulator here) licenced/registered to be legal. 

[Liverpool Lou]

3 hours ago, STD Warehouse said:

Can a foreigner living in Thailand work as an investment advisor, more specifically in the sole area of giving advise in regards to investment of personal wealth in terms of an individuals portfolio construction of stocks and bonds?

Not legally, no, they/their company are supposed to be SEC registered and, obviously, would need a work permit.

[noobexpat]

4 minutes ago, Mike Lister said:

Thanks, it's been a long time since I looked at them. I did look years ago and the firm involved wanted far too much money for what looked like form filling and knowling slightly more than me. When I questioned the level of fees, the response came back, "we don't it for nowt"! Enuf said!

 

Historically, I would guess that they were sold on the benefits of avoiding inheritance tax. Whilst uk pensions are also not subject to IHT they do have pre and post age 75 tax consequences on death.

We use legacy preservation trusts alongside an expression of wish. This may be of personal interest to you.

 

Also lifetime allowance cap (the £1.07m) was an issue for some. I think this did not apply to qrops. Although now changed to the LSA and LSDBA from 6/4/2024. 

 

As legislation changes, it can be tricky. You can only assess suitability at that point in time. 

 

[Liverpool Lou]

2 hours ago, scorecard said:

Response form the IA 'none of these products is subject to any form of taxation and tax is just not important anyway.

That would be true if their investment that built up the value of the policy over its term, was through an offshore provider (as they all are if introduced by foreign advisors here).

[Liverpool Lou]

27 minutes ago, Mike Lister said:

When I questioned the level of fees, the response came back, "we don't it for nowt"! Enuf said!

Not exactly reasonable to expect a legitimate operation to provide advice FOC if it is waiving commission, as many professional advisory companies do.

[noobexpat]

1 hour ago, Liverpool Lou said:

That would be true if their investment that built up the value of the policy over its term, was through an offshore provider (as they all are if introduced by foreign advisors here).

 

An incorrect blanket statement i'm afraid.

We use offshore investment plans and they are simply subject to different tax regimes that can be advantageous to some clients. 

 

The country in which the plan is registered is the deciding factor for tax treatment within the investment wrapper. Then the fund can be registered elsewhere. Then the tax regime of the client upon encashment.

 

No place for generalisations!