Your Investments: Should your investments make aliya with you?

Continued cooperation with your financial advisor will ensure that your investments remain consistent with your new goals and new life in Israel.

An accountant calculator taxes 370 (photo credit: Ivan Alvarado / Reuters)
An accountant calculator taxes 370
(photo credit: Ivan Alvarado / Reuters)
Here come the new olim! Another summer of North American aliya kicked off this week, as the first Nefesh B’Nefesh charter flight of the summer touched down. I want to personally wish all of you freshly- minted olim, immigrants, a big “Mazal Tov,” and wish you success in your new lives in the holy land. I am sure that with all the support you will get from NBN, the Jewish Agency, the JNF and the Absorption Ministry, your acclimation process will be as smooth as silk.
When it comes to making the big move to Israel – a common dilemma is should your assets accompany you as well? Whether you have been managing your own investment portfolio or using a financial advisor, you should consider the best approach to managing your money.
Local options
Israel has developed a very sophisticated banking system, and while there are only a few banks that control the lions 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. It’s important to note that due to regulations like Foreign Account Tax Compliance Act, many local banks will refuse to deal with American citizens vis-àvis investments.How to 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 US. 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 important to use someone who speaks your language and understands your situation.
Plan ahead
The most common question I receive from olim, centers on what should be done with the excess money leftover from selling their house. For many olim, they put all their savings into a home and watched as, even with the housing crisis of a few years ago, their property values escalated.
They have already bought a home or apartment in Israel, and suddenly find themselves with a substantial amount of money liquid, and no idea what to do with it.
Before you meet with a financial professional, map out your financial goals. Going to the experts will help you decide how to invest your savings, but you should first have a firm grasp of your short and long-term goals and needs.
How much income will you need to meet fixed expenses apart from any pension, national insurance or social security income? Do you have children or grandchildren to educate? Are your elderly parents in need of care? How is your own health? You need to determine your own budget needs and your ability to tolerate risk first, and then ask your advisor what kinds of investments would best fulfill those goals.
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 aliya. You will need to focus on the whole range of the investment’s characteristics in your decision-making, not simply on promises of a high return. What may once have seemed to make sense living in Brooklyn may not be appropriate for your new life in Modi’in!
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. Be sure to evaluate your portfolio with him periodically, and make sure that it is still consistent with your needs. On the same note, make sure that your investment strategy remains current. 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.
[email protected] Aaron Katsman is a licensed financial professional both in the United States and Israel.