Using An Offshore Broker To Your Best Financial Advantage
Whether you're new to the investment world or an experienced player, offshore brokers can play an important part in your monetary decisions. This article aims to help you understand what exactly an offshore broker does, and how he or she can help - or hinder - you with your financial affairs. In essence, offshore brokers are sales people who make a living from commissions on the products they sell. Now, there is nothing wrong with earning a living in this manner; it is only when the commission is their only goal and the client is a secondary concern that an offshore broker's activities can become problematic. Let me give you a few details to better frame this discussion on brokers in the field of offshore investment. In the year 2000, a study conducted in the US on 8,000 brokerage recommendations found that only 24 were available to sell. Even when some stocks had lost over 70% of their value, these offshore brokers muttered things like dollar cost averaging or told their clients how lucky they were to be getting such a bargain.
Warren Buffet - perhaps the greatest investor of all time - was once rumored to have asked why investors in Rolls Royces drove down to Wall Street to ask the advice of people who took the subway to work. You may have gathered by this that I am not a fan of the offshore broker. In that you would be only half correct: while I do have a dislike for many offshore brokers, they are still a necessary evil. They are useful for the purchase of mutual funds, stocks and so forth, but investors - regardless of their level of experience - must be very wary of any advice given to them by an offshore broker. There are, obviously, exceptions to the rule and if you can find an offshore broker that is also a successful millionaire, then that is worth his or her weight in gold. However, do not assume just because an offshore broker is wealthy that this makes them an expert in the field of investing: I once had an offshore broker that was exceptionally well-off but later found out he made his money in real estate, and not in the types of securities that he was recommending. In short, offshore brokers are an essential part of the investment world, but caveat emptor: make sure any offshore broker you employ knows what he or she is talking about, and can give you details, reasons - and proof - why a particular investment might or might not be worthwhile, or you risk throwing good money after bad.
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