A model story from practice. This story brings together several situations we repeatedly encounter with our clients. It does not represent one specific individual.
He had been living in Prague for six years. He held a senior position at an international company, his family had made their home here, and most of their day-to-day life was in the Czech Republic.
His financial life, however, had developed across several countries.
He had built part of his wealth before moving to Prague. Some investments remained abroad, his income had been paid in euros and US dollars at different stages of his career, and additional capital had accumulated in the Czech Republic.
His total investable assets were worth tens of millions of Czech crowns.
Each decision had made sense at the time. But the investments had been made at different stages of his life, under different circumstances and without one overarching plan.
He understood the individual pieces.
What he was missing was a clear view of how they worked together.
When we first met, his question was very practical:
“Can I manage my wealth from the Czech Republic while keeping some of my assets abroad?”
There was one more requirement.
Throughout his professional life, he had discussed investments and financial decisions in English. He wanted to do the same with the people managing his wealth.
One portfolio, several countries
We started by mapping what he already owned.
We looked at his investments in the Czech Republic and abroad, his cash holdings, the currencies in which new income was coming in, and, most importantly, what he wanted his wealth to achieve over the long term.
His family’s future was part of that conversation.
Prague is home today. But he could not say with certainty whether his family would still be living here in ten or fifteen years.
His investment strategy therefore had to work for a life that might continue to span more than one country.
When we brought all his investments into one overview, we also found some overlaps. Funds held with different institutions and in different countries gave him exposure to some of the same markets. In other areas, the existing structure did not provide what he wanted from his portfolio over the long term.
Having accounts in several countries, with several institutions and in several currencies may look diversified.
But the number of accounts or countries tells you very little about what you actually own.
We needed to understand the underlying investments and the role each part of his wealth was meant to play.
Not everything held abroad needed to move
Some of his existing investments remained exactly where they were.
They still served a clear purpose and fitted into the new strategy. There was no reason to move them simply because he now lived in Prague.
For other positions, we adjusted the allocation or recommended a change based on their role, costs and overlap with the rest of the portfolio.
The objective was never to bring all of his assets to the Czech Republic.
Nor did living in the Czech Republic mean limiting the portfolio to Czech investment products. We work with international investment solutions and select them according to the client’s overall financial situation, investment horizon and attitude to risk.
New capital could then be allocated according to one investment strategy.
Instead of making a new standalone decision every time money arrived in a particular account or country, we could ask a more useful question:
Where does this capital belong within the portfolio as a whole?
Three currencies do not require three strategies
The client held assets and received income in Czech crowns, euros and US dollars.
Currency therefore mattered.
We considered the cost of currency conversion, the currencies in which the family was likely to have future expenses, and the actual currency exposure of the underlying investments.
These are not necessarily the same thing.
The currency of an investment account – or the currency in which the client happens to receive income – does not by itself determine the currency risk of the portfolio.
So rather than treating CZK, EUR and USD as three separate investment decisions, we looked at the underlying assets and the portfolio as a whole. At the same time, we identified places where unnecessary conversions could be avoided.
The client can now manage income in several currencies within one strategy, with each new allocation considered in the context of everything he already owns.
A shared language matters when managing wealth
We conducted the entire relationship in English from the beginning.
This was not simply about translating the names of investment products.
The client needed to be able to describe his experience, expectations and concerns precisely. And he needed an equally precise explanation of the risks he was taking, the purpose of each investment and the reasoning behind every significant decision.
When you are making decisions about assets worth tens of millions of Czech crowns, there is a meaningful difference between roughly understanding something and understanding exactly what you are agreeing to.
For our international clients, English is therefore not an add-on to the service.
The entire relationship can take place in English, from the first conversation and the design of the investment strategy to regular portfolio reviews.
With greater wealth, we also considered where the assets were held
With a portfolio of this size, our analysis did not stop with the investments themselves.
We also considered the financial institutions through which different parts of the client’s wealth would be held and managed.
In this particular case, it made sense to use a solution through a Swiss bank for part of the assets.
Not because a Swiss bank is automatically a better or safer option.
It fitted the client’s international circumstances and broadened the institutional structure through which his wealth was held and managed.
For high-net-worth clients, diversification can therefore take place on several levels. It may involve different asset classes, markets and currencies, but in the right circumstances it can also involve more than one financial institution.
The appropriate structure always depends on the size of the assets, the client’s individual needs and the specific role an institution is intended to play.
What we did not do, and why
We did not automatically move all of his foreign investments to the Czech Republic.
Existing investments abroad were assessed according to the role they played in the overall strategy, not according to the country in which they had originally been opened.
We did not divide his wealth into a “Czech portfolio” and an “international portfolio”.
He has one pool of wealth. It needs one coherent strategy.
And we did not introduce a Swiss bank simply for the sake of having a Swiss bank. Any additional institution needs a clear purpose within the overall wealth structure.
We also kept one important boundary clear.
Cross-border wealth can raise questions that go beyond investment management. A change in tax residency, a move to another country or a particular legal structure may have tax and legal consequences of their own.
Those questions need to be assessed individually by the appropriate tax and legal specialists based on the client’s specific circumstances.
Where he is today
The client still lives in Prague with his family.
His income comes in more than one currency. Some of his original investments remain abroad, and part of his wealth is managed through a foreign financial institution.
We did not try to eliminate that complexity simply because it crossed borders.
What changed was the structure behind it.
Today, he has one overview and one investment strategy. He knows the purpose of each part of his wealth, where his currency exposure comes from and how new capital should be allocated.
If his family moves to another country in the future, the strategy can be reviewed for the new circumstances, alongside the relevant tax and legal considerations.
And during regular reviews, he can discuss all of these decisions in the language in which he is used to thinking about his finances.
His wealth spans several countries. His investment strategy is one.
What to consider if you are an expat living in the Czech Republic
- Include assets you built or still hold abroad when creating your investment strategy.
- Do not assume that foreign investments need to be moved simply because you now live in the Czech Republic. Assess the role they play in your overall portfolio.
- Several accounts, countries and currencies do not automatically mean better diversification. What matters is what you actually own.
- If you deal with several currencies, consider both conversion costs and the actual currency exposure of your investments, as well as your future financial needs.
- For high-net-worth clients, it may make sense to diversify not only across investments but also across financial institutions.
- Cross-border wealth may involve tax and legal questions that need to be assessed individually with the appropriate specialists.
- Make sure you and your adviser share more than a common vocabulary. You need to be able to discuss your strategy, risks and long-term plans without a language barrier.
Your situation will be different. That is why we need to talk about it first.
