SHOULD YOUR INVESTMENTS MAKE ALIYAH WITH YOU?
When it comes to making the big move to Israel – a common dilemma is whether your assets accompany you as well? Whether you have been managing your own investment portfolio or using a financial advisor, you should now consider how to effectively manage the change in your status from afar.
Local Options
Israel has developed a very sophisticated banking system, and while there are only a few banks which control the lion’s share of the market, they are all very competitive and offer a full range of banking products, focusing on the Israeli financial markets. Using a local bank or private brokerage in your specific case may not be the most efficient way to invest. The local firms are very experienced investing in the Israeli market and while they have made great strides, most local investment advisors have no real experience investing globally. There are many other private firms that specialize in working with Olim on their investments overseas.
It certainly makes sense to bring some money to Israel, after all that’s where you are going to be living. But keep in mind that you should have a well-balanced, globally diversified portfolio, and the fact that you will be earning Shekels, as well as that all your various pension money will be overwhelmingly invested in Israel, it makes sense to keep money in the ‘old country’ as well.
How should you choose a financial professional in Israel?
First and foremost it’s very important to use an advisor who is licensed both in Israel and in the U.S. This will help ensure that you receive the appropriate advice that you should be given, as well it gives the client a legal outlet for any complaints a client may have. It’s also important to use someone who speaks your language and understands your situation.
Understand your Investment
Determine whether an investment is worth taking with you, or leaving it in the US. Chances are that you goals have changed now that you have made Aliyah. You will need to focus on the whole range of the investment’s characteristics in your decision-making, like risk, volatility, time horizon and not simply on promises of a high return. What may once have seemed to make sense living in Passaic may not be appropriate with your new life in Ramat Bet Shemesh!
Stay in Touch
Continued cooperation with your financial advisor will ensure that your investments remain consistent with your new goals and new life in Israel. I have seen all too often that new Olim, who managed their own money in the US, come to Israel and basically forget about their investments. They are so busy getting acclimated that their finances take a back seat. Be sure to evaluate your portfolio with your advisor periodically, and make sure that it is still consistent with your needs. On the same note, make sure that your investment strategy remains current. If your financial situation changes suddenly, assess whether your strategy needs to be reevaluated. With smart planning and continued monitoring of your investments’ progress, you and your financial advisor whether in Israel or back in the US, should have a valuable, long-lasting relationship.
The information contained in this article reflects the opinion of the author and not necessarily the opinion of Portfolio Resources Group, Inc., or its affiliates.
Aaron Katsman is author of the book Retirement GPS: How to Navigate Your Way to A Secure Financial Future with Global Investing (McGraw-Hill), and is a licensed financial professional both in the United States and Israel, and helps people who open investment accounts in the United States. Securities are offered through Portfolio Resources Group, Inc. (www.prginc.net). Member FINRA, SIPC, MSRB, SIFMA. For more information, visit www.aaronkatsman.com or email aaron@lighthousecapital.co.il
