Creating Financial Security for Our Clients
At Discretion Wealth Management our mission is to work primarily with members of the international LGBT community. We do this through our global headquarters in Hong Kong – reaching out across Asia.
LGBT expats as well as locals have important and unique situations that most Financial Planning Advisors simply cannot understand or empathize with. Most of our clients are not “out” at the office, and while this is gradually changing, it does tend to complicate things.
Our clients expect us to respect their privacy concerns, and as a result, our business has grown considerably. Most of our clients come to us through referrals from their friends and associates who are existing satisfied clients already.
The principals of Discretion Wealth Management have over 100 years of combined experience in managing investments across the globe. Our expertise is in matching LGBT clients with the most appropriate products and services from any provider. No two clients have the same situation or the same wealth management needs, and this means that we must get to know our clients, both well and over the long term. We grow when our clients’ investments grow. And we make sure that this happens discreetly.
As Independent Financial Advisors, we guide you through the creation of your wealth, but your funds will never touch our hands. We are regulated by the HKCIB (Hong Kong Confederation of Insurance Brokers) and all our products are fully licensed and authorized by the SFC (Securities and Futures Commission). Because of this, our clients sleep well at night.
If you’re not satisfied with the investment returns you are currently getting, you’d like to invest in gay-friendly companies through Credit Suisse’s LGBT Equality Portfolio, or just want to explore how to plan for an even more fabulous future, you should probably give us a call today: 852-2970-4546.
How We Build Your Wealth
Financial Planning Makeover Case Studies
1. Regular Savings M
Two Men Raise Two Children the Right Way
Doug 39 and Gerry 37 are expatriates from UK. They recently celebrated their tenth anniversary together, even though they aren’t legally married. A few years back they adopted two children Clayton, now two, and Alexandra now four. Doug works for an international bank in Hong Kong. His contract was originally for 4 years but his position has recently been localized.
As Doug and Gerry both enjoy life in Hong Kong, they’ve decided their family will stay in Hong Kong indefinitely. Doug’s company will continue to pay for schooling as long as he stays with the bank until Clayton and Alex reach 16. But he and Gerry are both concerned about the cost of providing an overseas university education for their children when the time comes.
Their Discretion Wealth Management consultant conducted a full analysis of Doug & Gerry’s situation and prioritized education planning as their number one objective. Doug & Gerry agreed that they would need the equivalent of £20,000 per school year per child starting in 14 years. They made the assumption that each university course would run 4 years and so they would need to generate an amount equivalent to £160,000 in today's terms.
Inflation can be very damaging to future plans and Doug and Gerry factored this in at 3% per annum. This meant that they need to generate a fund of £242,000 to meet their target. Their consultant explained the various saving options offered by different providers and advised the need to commit to a disciplined savings plan to avoid having to meet the future costs out of earnings at a stage when either or both of them no longer wished to work.
Doug and Gerry completed a risk profile questionnaire which determined their attitude to risk as 'balanced' and funds were selected on this basis in line with their objectives. Doug and Gerry now make a contribution of £919/month into a regular savings plan with Friends Provident International, giving them peace of mind that they will now be able to afford the education that they would like to give their children.Two Women Prepare for World Cruise
Melissa and Fanny (both in their 20s) have been living together for five years now. They realize that the relationship will in fact endure the test of time, and are looking to get married. Hoping that Hong Kong will soon allow same-sex marriage, they would like to eventually get married in the territory. They are also thinking that their marriage ceremony would provide the motivation required by Melissa’s extended family in the US to finally get them to come out to Hong Kong.
Both Melissa and Fanny are working in the communications industry, and neither of them are “rolling in money”. They’ve decided that to hold the kind of ceremony their family and friends would expect for 150 people in Hong Kong will take quite a large sum of money. At the same time, they’ve decided they also want to buy a flat they can c their own to move into.
By reaching out to their Discretion Wealth Management consultant, they realized that they’ll need to save aggressively over the next three years to meet their target. They learned that as adventurous investors, they’ll need to set aside at least HKD10,000 each month to see their dream wedding happen.
A year into their plan, they’ve realized that they’ll most likely have to get married in the US as they don’t like the prospects of waiting until the HK government becomes enlightened. But since they started, they’ve increased the monthly set aside because now they’re looking at purchasing a larger flat than they originally thought since a baby is on the way!
- 2. Restructure M
Planning for a Positive Future
Derrick is a long term expatriate, 60 years old and a permanent resident of Hong Kong. Having just left on relationship, he is currently single. He does expect to meet his next “Mr Right” at some point and wants to ready himself for this eventuality. He now feels financially comfortable, but he wants to simplify his situation because starting a new relationship is complicated enough. He also wants to see if his current portfolio of investments is in alignment with his long term goals, which have most likely changed since the investments were initially made.
Derrick worked overseas for most of his career; he spent a large portion of this in a few European countries before his posting in Asia where he realized he wants to spend the rest of his working career. In the process of all his moves and assorted job assignments, he enrolled in a number of regular savings plans and a few small lump sum investment programs along the way. Derrick is a marketing executive, and had no consistent financial advice over the 30 years of his career. He was moving around quite a bit from one company to another as well as in different companies. Not knowing any better, he started several new investment schemes all managed separately, which resulted in him having total investments of nearly Euro1,000,000 spread over seven plans.
Because of industry consolidation, some of his original providers were no longer open for business, but he still owned the assets he had invested. Fund performance had suffered quite a bit as a consequence of this lack of attention. The portfolio as a whole was underperforming Derrick’s expectations largely due to lack of regular management and outdated, high fee structures from legacy advisors.
Derrick’s Discretion Wealth Management consultant reached out to each of the providers and did a full review of the terms and conditions for each plan. The consultant realized that it would be far more efficient to consolidate the seven plans into one. Providers of most of the plans applied penalties for termination, but DWM was able to rebate this amount in full as part of the restructuring process.
Derrick now has a more strategized, more transparent portfolio. In addition to this, it provides greater access to funds at greatly reduced servicing costs which has significantly enhanced performance compared to his previous situation. Derrick decided to use the Discretionary Management Service in line with his risk profile. As part of this service he receives monthly portfolio valuations & global market reports as well as quarterly reviews with his Discretion Wealth Management consultant.
Since restructuring the portfolio in 2011 Derrick has enjoyed performance with double digit returns eas year without taking on any additional risk, while at the same time significantly reducing the service cost of his investments.
- 3. Lump Sum M
A Banker and an Entrepreneur Invest in the Credit Suisse LGBT Equality Portfolio
Chan, a busy 40+ year old telecoms executive and Kevin 38 a very successful restaurateur have been domestic partners for more than ten years. Both are high earners. Chan receives large bonuses each year when times are good, and Kevin’s restaurant is now at the point where it’s generating significant profit on a monthly basis, even after he draws a modest salary.
They’ve done well in the Hong Kong property market buying a flat whenever they could and until recently had nearly ten properties they had made for investment purposes. But in the past few years, since the rules for obtaining mortgages in Hong Kong have changed, they’ve liquidated most of their properties, and are now in a very enviable position of having close to USD 4 million in cash.
Since they felt very positive about the property market, having done so well in Hong Kong, they wanted to seek out other opportunities, also in real estate. They also knew that London was a preferred investment destination for others looking to get ahead with real estate. Since they figured that Hong Kong had overheated, and was set for a correction, the UK property market became their target.
Chan and Kevin decided to leverage as much as possible, so their London properties were bought with small down payments, but mostly mortgaged from the bank. Their intention is to rent the property out through a professional UK estate agency while they remain in Hong Kong where their friends and most of their family are.
They also want to commit around one million USD to the equity markets and leave it there for at least five years, but still have access to liquidity if anything comes up. Although they are both financially savvy, neither has the time, knowledge or inclination to make initial and ongoing investment decisions around their own portfolio.
The men together and separately completed a risk profile questionnaire and are eager to set and take on an aggressive approach since they feel that markets are in a bull phase, and will be so for the next several years. Not everyone takes this sanguine approach to equities right now though.
Their investment was established on a joint life second death basis for tax purposes and is initially diversified across 20 individual holdings. When the Credit Suisse LGBT Equality Portfolio becomes available in Hong Kong, they will move the lion’s share of their investment into that fund. Currently their holdings are closely monitored by the Portfolio Management Team who are appointed to act as discretionary managers in line with Kevin and Chan’s long term objectives which are reviewed on a quarterly basis with their Discretion Wealth Management consultant.
- 4. Family Protection M
Kevin is a company Managing Director in Hong Kong and has regional responsibility for 6 offices in Asia. He’s almost 60 and has been with his Honky partner Chase for almost 20 years. He has two grown children from his first marriage to a woman, but with his partner, adopted two young children more than ten years ago.
Chase gave up his career as a marketing professional when the kids came on board and has pretty much not worked for over ten years. Kick-starting his career at this point would not be easy as he’s almost 50 himself.
One of Kevin’s close friends back in the US recently suffered a heart attack and passed away. This was a wake-up call for both Kevin and Chase.
Kevin is currently bringing in excess of 1 million USD, and his company has covered him with key man insurance so that they can replace him if he dies unexpectedly. After the death of his close friend in the US, Kevin realized that he needed to look into his personal and family situation more seriously. Kevin did the right thing, and forced Chase to accompany him to meet with a financial advisor to discuss their situation. Chase felt that discussing such issues would be tempting fate, but Kevin put up a fuss.
In the course of the review, the two men came to realize that the USD500,000 life cover they had, and complete absence of critical illness protection was a serious risk that had to be reckoned with.
When the Discretion Wealth Management adviser approached Kevin privately, he made it clear that he wanted to provide for his partner and their two children to live at the same level of lifestyle as if Kevin was still around.
None of us are immortal, and it was an inspired decision Kevin made when he chose a 5 million dollar life insurance policy with 2 million dollars of critical illness cover. This didn’t come cheaply, but when love ones are being considered, some things are more important than money itself.
- 5. Pension Transfer M
Complicated Lives Present Complicated Dilemmas
Simon is a 64 year old expat who has worked internationally during his entire career. He has consistently saved for his retirement throughout his career which has been primarily at one company in the PR industry. He’s lived with his partner for around 20 years. Together they have no children or other worries.
Simon had a number of plans simultaneously from employers going back 20+ years. A few years ago he sold what he thought was going to be his retirement home in southern Spain and took the proceeds and invested in two parts: a Personal Portfolio Bond (PPB) and a holiday home in Thailand which he paid for in cash.
Although he still enjoys visiting family and friends in the UK he has no intention of returning there after retirement and consulted Discretion Wealth Management to see what could be done to make sense of the five pension plans he had for his planned retirement in Asia. These plans were all paid up (no longer taking contributions), and through investigation by the Discretion consultant with the providers it was found some still had high ongoing charges and one had a significant penalty charge for transfer to any other scheme outside the UK.
Discretion conducted a Financial Planning Profile to determine Simon’s planning objectives as well as a Risk Profile Questionnaire and subsequently recommended that all but one scheme could be transferred to a QROPS (Qualifying Recognised Overseas Pension Scheme) without significant surrender penalties. This would allow him to receive a significant benefit of a pension free from the high income taxes applicable in UK as well as the ultimate benefit of no inheritance tax to ensure that his estate could pass to who he wanted.
The consultant advised that the remaining scheme could be first transferred to a UK SIPP (Self-Invested Personal Pension scheme) and subsequently transferred without any penalties to James' QROPS to provide a single cost and tax efficient scheme with £500,000. As a result he had access to an investment platform with open architecture which meant a much wider range of funds than the limited range available with his existing plans.
Simon was advised about the process and conditions of transfer for existing pension schemes as well as the different benefits according to the jurisdiction selected for the trustees of his pension fund which is also explained in the Platinum QROPS Guide. Whilst interested in fund investment as a hobby, he opted to subscribe to the Platinum 'Options' service with Discretionary Management of the funds to ensure that professional managers would look after his interests in line with his future plans for retirement in Asia.
What Our Clients Have to Say
“I was impressed with the professionalism and approach of the Discretion staff. I don’t want to make a huge personal statement at work and Discretion Wealth Management staff were very low keyed. I highly recommend these guys.”.
“A friend of mine had told me about this firm working exclusively with gay clients. They showed me how they could cut down regular management fees associated with my investment account considerably.”.
“I was surprised at the range of investment options Discretion had. Other Financial Advisors were only able to work with me on products of their own company so I had very little choice of products.”.
“I knew the end of my relationship was coming. It was a very sad period of my life. Setting up a trust to protect myself was the best thing that happened to me at that time. Thanks”.
“People I know with investment property are so rich. I don’t know how they got so rich. Now I also have investment property. When I retire, I’ll be able to sell it and buy something really nice to live in.”.
“When Harris joined our family, my first concern was making sure that her future was planned for. One of the first things we did was set up an educational fund for her. Because we started it before she even turned one, the payments are only a few hundred HKD per month. I can live with this very easily.”.
“My wife has always earned more money than I do, and we decided long ago that we’d spend in line with my income, not hers. She went through a period of being redundant for almost a year and because we had been putting money away (even for just a short term) we got through that period well.”.
“I like the way the Discretion team members interacted with me. It was a very professional discussion, but also very friendly. I’ve actually passed their name on to several friends of mine too.”.
“I had just bought a vacation condo in Phuket when I learned about Discretion. After meeting with these guys only twice, I found out I could have gotten a much lower mortgage, and I should have looked at more properties than just the one the developer was promoting. My next investment will be vetted by Discretion first!”.
“I didn’t know how to explain my personal situation with my previous Financial Advisor. The relationship always seemed un-natural to me. Then when I met the Discretion team, I could relax, be myself, and get honest input about how I should manage my investments.”
Now is the Best Time to Move Forward
The best time to plant a tree is 20 years ago. The second best time is today. Unless you’re getting younger each day, it simply doesn’t make sense to not think about your future. If you’re a smart, long-term thinker, you want to know what your options are. What makes sense, and what does not? What can you do today so that you’ll end up living that fabulous life you deserve? Waiting for your next raise or salary increment is not an option if you take yourself and your future seriously.
We’ll prepare a financial planning makeover for you free of charge. You’ll find out where you’re exposed, and how you can fill the gaps – sometimes it’s easy, but sometimes it’s not. But you will learn how simple it is to get started and move forward on a regular basis.
Half our clients have existing advisors when we begin to work with them. Half have only just started thinking of getting serious about preparing for their future. There’s a plan that fits every budget because all our plans are made to fit the requirements of our clients. You won’t find this level of personal attention at any large investment house or banking organization.
Contact us now and we’ll arrange a short meeting where we help you look at how to move forward. No commitments, no cost, very little time.
Discretion Wealth management is the LGBT marketing division of Platinum Financial Services Limited. All investment recommendations are made on behalf of Platinum Financial Services by HKCIB authorized advisers from Hong Kong.