Your Investments

More financial tips for new olim.

With the landing of multiple Nefesh B’Nefesh flights over the summer, I would like to continue my series of financial tips for new olim. Last week I discussed the need for new olim to get their “financial aliya” in order. I explained how important it is to get your hands around a budget and keep your retirement plans from the old-country current. This week I would like to focus on employment benefits and banking.
NEW JOB When job hunting, make sure you get a fair compensation offer.
Much to my chagrin, there are employers who will try to take advantage of your “new immigrant” status and offer you less than the market wage. They feel you will be willing to “settle” and be so happy to get any job, that you will forgo a competitive salary. Hang tough when negotiating salary. As they say in the local vernacular: “Don’t be a frier [sucker]!” When discussing compensation, it’s important to know there are many social benefits that salaried workers are entitled to, and you should make it clear that you want them. In fact, in most cases the law stipulates that you receive certain pension plans. Savings plans, both short-term (keren hishtalmut) and long-term (kupat gemmel), can help you realize your goals. These expenses are often covered by the money the worker has put away over the years, which is matched by the employer according to the terms of the policy.
Recent reforms in savings plans give more choice to employees than ever before. It’s important to speak with a professional to understand what you are entitled to and which provider to choose. It’s also important to verify that you are receiving your full complement of sick days and vacation days.
US INVESTMENT ACCOUNT Since the 9/11 terrorist attacks, US investment firms have taken a very strict approach to non-US-domiciled accounts (accounts without a US address). With the enactment of the Patriot Act and other new laws, it has become much harder for these firms to accept accounts from US citizens living abroad. Many firms have decided they would rather not deal with the issue and have made clients close down accounts or have stopped servicing them. Some firms won’t accept transactions from clients living here, while others won’t allow their advisers to speak with clients residing abroad.
Olim should investigate how their investment firms are treating the issue. If there is a problem, I would recommend going local. I would find an adviser who is licensed both in Israel and in the US to handle the accounts. A local professional with an arrangement with a US firm should not have the same problem; he should have all the compliance in place for his clients to access the wide array of investment choices and advice that you’re used to.
WHERE TO BANK Twenty years ago local banks may have been the butt of jokes, but Israel now has a very sophisticated banking system. While only a few banks control the lion’s share of the market, they are all very competitive and offer a full range of investment products. Customer service has improved, but it still lacks what you were used to before making aliya. As such, when investigating local banks, you need to evaluate the pluses and minuses of each one and NOT compare them to your bank in the US.
I would take that one step further: To integrate into Israeli society, it’s not productive to compare everything to the way it was back in the old country. It’s not worse – it’s just different. Some things may even be better here! Here’s to an easy integration. Aaron Katsman is a licensed financial adviser in Israel and the United States who helps people open investment accounts in the US.