Offshore Investment Platforms | Novia Global Review 2023
LEARNING OBJECTIVES
We’re passionate about providing free, high quality and up-to-date financial literacy to Expats around the world.
IN THIS ARTICLE, YOU WILL LEARN THE FOLLOWING:
What is an Offshore Investment Platform
Who are Novia Global
Strengths of the platform vs others
Novia platform weaknesses
Our verdict on Offshore investment accounts
Offshore Investment Accounts
An offshore investment account is essentially an investment that is held outside of your country of residence. Most Expats typically look to tax-preferential jurisdictions, such as Jersey or the Isle of Man.
Offshore investments are brilliant for tax-efficiency, flexibility and portability. These are the main reasons Expats consider including them in their financial planning.
The Novia Global Investment Platform, also known as the Novia Global Investment Account (GIA) or Novia GIA, is a global wealth management platform. It has become a leading choice for expatriate investors since being introduced in 2015.
At a time when the offshore investment market was predominantly centered on offshore bonds that often involved substantial commissions for advisers. Novia's journey to prominence in this space was marked by a commitment to transparency, regulatory adherence, and the evolving needs of investors.
Who Are Novia Global?
Novia Global Limited is a privately owned UK financial services company specialising in international wealth management products. Their core offerings include the Novia Global Investment platform, introduced in 2015. With the addition of the Novia Global UK SIPP, (an International SIPP) that launched in 2020.
The Novia Global Platform enables investors to work with their Financial Adviser to construct an investment portfolio. This can either be a lump sum or regular savings contributions. Members gain access to a user-friendly portal where they can view their investments.
For research and analysis, the platform gives you access to FE Analytics. These portfolio management tools allow you to explore the available funds and make informed decisions. However, the buying and selling of your investments can only be done by your appointed financial adviser.
Key Features
Regulation
The Novia Global Investment Account (GIA) operates under the regulatory oversight of the Financial Conduct Authority (FCA whilst being registered in Jersey, Channel Islands, UK.
This dual regulatory structure offers distinct advantages to investors. Being registered in Jersey allows for certain tax benefits and a greater fund range. Simultaneously, the oversight of the FCA ensures Novia GIA maintains the high standards, security, and legal protections associated with the UK regulator.
In essence, you benefit from the best of both worlds. You can access the advantages of an offshore product while enjoying the regulatory protection of the UK regulator.
Safety
Pershing, a subsidiary of the Bank of New York Mellon, serves as the custodial services provider. With a notable presence in the financial industry, Pershing ranks among the top three global custodians.
Pershing's extensive reach encompasses the custody of assets exceeding $2 trillion held by clients on a global scale. Additionally, the firm maintains a robust net capital position, with assets surpassing $2 billion
Platform Fees
Adviser fees for the Novia GIA can vary based on the financial advisory firm you choose. Here's a breakdown of the charging structure:
Novia Global : Does not charge a setup fee.
Ongoing Fees: Fees start at 0.30% and decrease to 0.25% for investments exceeding $1 million.
Pershing: Charges a custodian fee of 0.04%.
Total Fees: Excluding adviser or fund costs, the total fees amount to 0.34%. This encompasses the platform fee and the custodian fee imposed by Pershing.
Foreign Exchange (FX) Fees: The foreign exchange fees are set at a fixed rate of 0.20% per transaction, with no additional spread taken.
Adviser and Fund Fees
Novia Global will allow advice firms to charge up to 5% initial fees and 1.5% ongoing fees.
The Wealth Genesis charges an industry low £3000 setup and 0.85% ongoing. This covers the ‘Client Discovery’ meeting so we can understand your priorities and future ambitions. With this insight, we specify the best product, fund allocation and ongoing investment strategy designed to meet your investment goals.
Fund fees vary. Index tracking funds such as ETFS start as low as 0.08%. Active funds charge up to 1.8%. Many advisers now use DFM’s which adds on another 0.15 - 0.35% to the ongoing costs. Any cost incurred has to be made before any growth can occur. As such, we use a core of ETFS with some active managers who have provided significant out performance over a period of 10+ years.
Fund Range
Novia Global offers an extensive selection of over 7000 funds. This provides you with a wide array of options to suit all preferences and investment goals. The diverse range includes offerings from providers such as Vanguard and BlackRock for ETFs, as well as LGT Vestra for Discretionary Fund Management. Additionally, investors can explore Mutual Funds like Fundsmith, as well as structured products.
For those interested in sustainable investing, Novia Global also provides access to a comprehensive range of ESG (Environmental, Social, and Governance) funds, encompassing both active and passive strategies.
One notable advantage for clients is the opportunity to access institutional funds, which typically feature the lowest fees and are typically reserved for professional investors and pension funds. This demonstrates Novia Global's commitment to providing its clients with cost-effective and competitive investment options.
Furthermore, investors have the flexibility to transact in various major currencies. This includes Swiss Franc (CHF), Hong Kong Dollar (HKD), and Australian Dollar (AUD). The platform offers its largest fund offerings in USD, GBP, and Euro, providing investors with a wide range of currency options to suit their preferences and needs.
Exit Penalties and Account Minimums
There are no exit penalties or account minimums with Novia.
Taxation
Novia Global is widely regarded as a tax-efficient platform, although there isn't formal documentation explicitly confirming its tax position.
In practice, for the majority of investors, as long as the investments remain held without being sold to realise a gain, no tax liability occurs. However, for European-based clients, it's often more advantageous to utilise a compliant bond that offers specific tax benefits. Novia Global remains compliant, provided investments do not include funds domiciled in Great Britain (GB).
Given the intricacies of individual tax situations, we always recommend seeking specific tax advice tailored to your unique circumstances. This ensures that your tax strategy aligns with your financial objectives and legal obligations.
Novia Global offers a comprehensive wealth management service that suits the needs of most expat investors. It excels in numerous areas, making it an attractive choice for those looking to build and manage an investment portfolio, with the assistance of a financial adviser. Here are some key points to consider:
Strengths
Diverse Investment Options: With access to over 7,000 funds, ETFs, mutual funds, and more, Novia Global provides a broad spectrum of investment choices.
Regulatory Compliance: Novia Global is regulated by the FCA offering you the highest level of protection possible. This regulatory oversight also offers benefits for British expats returning to the UK.
Safety and Custodian Services: Partnering with Pershing, a subsidiary of the Bank of New York Mellon, provides a high level of safety and asset protection. The significant assets held by Pershing reinforce the custodial security.
Transparent and Competitive Fees: Novia Global's fee structure is straightforwardand highly competitive. The low overall costs, including the custodian fee, make it an economical choice.
Flexible Investment Strategies: The platform accommodates various investment approaches, including lump sum investments, regular savings, and customisable sub-accounts. As such, you can adjust your strategies as needed.
Detailed Fee Statements: Novia Global complies with MiFID EU regulations by providing quarterly transaction statements. This ensures transparency and helps you understand all associated costs.
No Lock-ins: Investors can access their funds without encountering exit penalties, offering flexibility and liquidity.
Weaknesses
Limited Individual Share Options: Novia Global focuses primarily on funds, and access to individual shares is limited to FTSE 100-listed stocks. Advanced traders or those interested in specific individual shares may find this restrictive.
Currency Variety: While Novia Global supports major currencies, other platforms offer a more extensive range. This could be a consideration for those with specific currency requirements.
Not Suitable for Day Traders or Niche Investments: The platform is better suited for long-term investors and may not meet the needs of experienced traders or those seeking niche investment opportunities.
Our Verdict | Expat Financial Advice
In conclusion, Novia Global is a strong choice for the vast majority of expat investors who prefer working with financial advisers to build and manage their investment portfolios. It offers a well-regulated, cost-effective, and secure platform with a wide range of investment options. However, investors with specific requirements, such as day trading or niche investments, may need to explore alternative platforms better aligned with their needs.
The Wealth Genesis is the first Expat Financial Adviser to charge the same flat-fee to all our clients, regardless of wealth, background or circumstances. To see how we can help you, contact us today using the form below.
Get started with The Wealth Genesis
9/10
‘Excellent, and still the best Investment Platform for most Expats.’
+ Fully regulated
+ Covered by the Financial Services Compensation Scheme
+ Transparent charges
+ Low cost
+ Friendly user-interface and performance tracking
- Limited options for individual shares
- Major currencies only (GBP, USD, EUR, CHF)
- Not for day-traders
FAQs
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Other than an international platform, Expats can also use offshore investment bonds or locally compliant bonds (France, Portugal & Spain)
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Currently, we believe the Novia Global platform to be the best solution for most Expatriates.
However, if you prefer to hold individual shares, or more niche investments, there are better platforms out there - notably Capital One -
Most investment platforms should not cost more than 0.50% per annum.
Novia Global costs 0.34%.
Most Expat Financial Advisers charge between 1% and 5% for the initial investment.
The majority of advisers charge between 1% and 1.5% for the annual management.
The Wealth Genesis charges a flat-fee for the account set up (one-off, regardless of investment size) and an industry leaing 0.85% per annum.
We’re proud of our fees - that’s why we have them front and centre. -
No, not if you are comfortable with managing your own investments and are prepared to take the risk.
Naturally we feel the right adviser can add significant value, whilst giving you peace of mind knowing your money is in the hands of a regulated expert.
