Is it possible to switch to an international endowment without incurring a fee?

Dear reader

Thank you for your question.

It is important to make sure you understand the process of moving to international staffing. To do this, a personal portfolio of shares (PSP) will have to be opened within the endowment and a transfer of shares will be made in the PSP. A stock transfer is the transfer of stock from one entity to another.

An endowment should be established, with a PSP as the underlying asset of the endowment. A PSP is defined as a portfolio of securities owned, managed and structured by brokerage firms according to an investment mandate.

It is not possible to transfer your shares into an international endowment without incurring a fee. Once you transfer the shares to the PSP as part of the endowment, it may result in a capital gains tax (CGT) event. This is because you are going to do a transfer of ownership. Once the shares are transferred, they will belong to the endowment.

Subsequently, there may be other costs such as upfront fees, also known as upfront fees. Fees may be charged by your financial planner for providing advice, or by the selected stockbroker for managing your funds. An administration fee will also be charged for the administration of your investment.

Depending on where your shares are currently held, there may be a fee to transfer the shares to a new custodian. In our experience, most providers charge this fee.

Some product providers do not charge an upfront fee for administering your investment and placing it in a PSP. Typically, the potential upfront fees that may be charged will come from the specific financial advisor chosen as well as the stockbroker selected.

Typical ongoing fees that will be charged are investment management fees, administration fees and brokerage fees.

One can invest in a portfolio of listed global stocks and have access to stocks on the world’s largest stock exchanges, all through a single platform.

Investing in an international PSP has many advantages, including:

  • These types of endowments are tax-efficient investment vehicles;
  • They offer estate planning benefits, such as the ability to designate beneficiaries as well as co-ownership of the investment;
  • They provide continuity by allowing you to select as many insured lives as you wish; and
  • They provide much more liquidity than a local endowment provides.

Since international endowments offer many benefits to investors, switching to one is considered a wise move. Even though fees will be charged, investors will benefit from tax efficiency.

Always be sure to find out what fees you will be charged before transferring your shares so that you can make an informed decision.

About Vicki Davis

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