Offshore complexity demands concise investing advice
By MoneyMarketing and Momentum Wealth | July 2026
Written by Sandy Welch
As rand fluctuations, concentrated domestic exposure and the breadth of global opportunity have pushed international diversification up the advice agenda, offshore investing is now central to any South African portfolio. While the strategy behind this rationale may be familiar, the practical decisions around allocation, structure, tax, estate planning and platform choice remain complex. That complexity is precisely where financial advisers have a critical role to play.
Robert Rhodes, Managing Director, Momentum Wealth International
Robert Rhodes, Managing Director, Momentum Wealth International
Why choose offshore?
Beyond providing a buffer against South Africa’s political and economic uncertainty, offshore exposure offers investors access to a broader universe of opportunities, helping to preserve and grow wealth over the long term. Global markets open the door to leading sectors such as technology, healthcare and renewable energy, as well as many of the world’s most innovative and high-growth companies that are simply not available on the local market. By diversifying across geographies, currencies and industries, investors can reduce concentration risk while positioning themselves to benefit from global economic trends and opportunities.
But, as Robert Rhodes, Managing Director of Momentum Wealth International, explains, offshore investing should never be reduced to a simple percentage allocation or a generic recommendation.
“It needs a very clear strategy that is closely aligned with the investor’s goals and objectives,” he says.
A dedicated international platform
Momentum Wealth International was launched in 1999, originally as an internationalised version of Momentum’s local platform. First set up in London, it was largely to support international distribution through private wealth channels in jurisdictions such as the Bahamas, Monaco and Jersey. Over time, however, the business identified a growing need among South African investors for access to international products. As the business evolved, the platform moved to Guernsey. “We started with a discretionary investment product, but we extended our product set to include discretionary investment and endowment-type products for South African investors, as well as products targeted to investors outside South Africa, which we distribute through adviser firms in Asia and the Middle East,” Rhodes explains. “Momentum Wealth International also operates a fund structure in Guernsey through which we establish Momentum-branded and adviser or third-party investment manager-branded funds, which are obviously available on the Momentum Wealth International platforms, but also through other platforms in South Africa.”
Guernsey is an attractive jurisdiction for offshore investing because, as a British crown dependency, it allows free flow of capital, with no restrictions on money movement, making exits and money transfers simple. It also offers a stable, well-regulated financial environment, complemented by tax efficiency and political and economic stability.
Momentum Wealth International offers two distinct investment options for South African investors. Firstly, its Global Wealth Endowment, a structured five-year endowment, that offers a tax-efficient way to invest. This option is ideal for South African tax residents seeking pure offshore exposure while benefiting from comprehensive succession planning opportunities. The second option is the Global Wealth Investment, a flexible, open-ended investment structure ideal for clients who require liquidity and simplicity, who want to manage their own tax affairs or live in tax-neutral jurisdictions. The Global Wealth Investment is particularly well-suited for clients who have emigrated or are considering emigration.
Channel Islands political map. Crown dependencies Bailiwick of Guernsey and Bailiwick of Jersey with capitals. Image: Getty Images/PeterHermesFurian
Channel Islands political map. Crown dependencies Bailiwick of Guernsey and Bailiwick of Jersey with capitals. Image: Getty Images/PeterHermesFurian
Regulations and choices
Once money moves offshore, the planning conversation becomes more technical. Exchange control, tax, product wrappers, estate administration and foreign jurisdiction rules all need to be understood before a recommendation is made. Rhodes says offshore jurisdictions have their own rules, and advisers need either to understand those rules or know when to bring in specialist support.
Another challenge is the sheer scale of the global fund universe. Advisers are faced with thousands of offshore funds, strategies, managers, benchmarks and wrappers. This is where discretionary fund managers (DFMs) can help. An adviser can appoint a DFM to run a bespoke mandate for a client or a model portfolio.
“The DFM then has the resources and capability to look across the world of funds and identify funds that meet the mandate.”
To support advisers, Momentum Wealth International partners with Morningstar and makes data available on performance, peer comparisons, benchmarks and ratings. Even so, Rhodes says the volume of information can be difficult to absorb.
Managing tax effectively
One of the advantages of the Global Wealth Endowment is simplified tax administration. Momentum Wealth International applies the five-fund tax approach, which offers a way to manage tax within an investment-based insurance policy. “Rather than each underlying investment being taxed individually in the hands of the investor, the endowment structure pools assets into broad categories, typically interest, dividends, income and capital gains, within the five internal tax ‘buckets’,” Rhodes explains. “The insurer then applies a flat tax rate to these categories on behalf of the investor, removing the need for complex tax reporting.”
This creates certainty and administrative ease, particularly for higher-rate taxpayers, as the effective tax rates within the endowment are often lower than their marginal rates. For advisers and clients alike, this structure not only streamlines compliance, but also allows for a more focused investment approach, where portfolio decisions can be made with clarity around tax implications and long-term outcomes.
Volatility and the adviser’s behavioural role
Offshore investing often brings behavioural challenges. Clients may expect smoother returns or may become more anxious when global markets fall. In practice, offshore exposure can introduce new sources of volatility, including currency movements, global equity drawdowns and geopolitical uncertainty. Rhodes believes advisers are essential in preventing clients from making emotional decisions during periods of market stress. "Clients are understanably very jittery about volatility and the impact on their goals. Advisers are there to steady that ship."
The key message, he says, is that offshore investing is still for the long term. Advisers can help clients distinguish between a change in market conditions and a change in their personal financial plan.
Remedying common errors
One of the mistakes Rhodes often sees relates to succession planning, particularly in endowment products. Momentum Wealth International’s endowment structure offers several options that can help with estate planning, including beneficiary nominations and successor contract owners. Used properly, these features can help avoid unnecessary offshore probate processes, executor fees and delays. However, Rhodes says the advantages depend on proper structuring. “Using those succession planning options can really optimise your estate planning process and can avoid the need to go through probate,” he says. “Not understanding how the succession planning options can play out in real life is often a real problem.”
Image: Getty Images/d3sign
Image: Getty Images/d3sign
A second common mistake arises when clients emigrate. A South African endowment may be tax-efficient while the client is resident in South Africa, but it can become problematic if the client moves to another jurisdiction. Rhodes gives the example of a client relocating to the UK. “Often there is not an appreciation that by holding an endowment, bringing it into the UK makes that endowment product subject to UK tax through HMRC,” he says. “If an investor was to immigrate, they really shouldn’t be immigrating with that endowment product.” For advisers, this means that offshore product suitability should be revisited when a client’s residency, tax status or life plans change.
Technology, integration and cyber risk
Technology is also reshaping offshore investing. Clients increasingly expect the same convenience from investment platforms that they receive from banks and digital service providers. While platform products are more complex than banking products, Rhodes says online transacting is becoming increasingly important. Momentum Wealth International offers integration capabilities to link its platform data with advisers’ financial planning software. Advisers and clients are able to make certain transactions digitally, including portfolio switches and additional investments, and the firm is preparing to launch an online new business journey that will allow accounts to be opened without manual application forms and physical copies of documents. Rhodes explains that this has recently been launched for the Momentum Wealth platform and has been very positively received by the adviser community.
Rhodes says the platform is also upgrading its reporting capability, to make them easier for clients to understand and easier for advisers to tailor to the specific needs of their clients. The business is also aligning the experience between Momentum Wealth and Momentum Wealth International so that South African advisers have a more consistent journey across local and international platforms.
Structuring for allowances and ownership
For clients approaching the R10m foreign investment allowance, exchange control structuring becomes another important consideration. Rhodes says Momentum Wealth International doesn’t itself provide exchange control structuring, but it does support investments through prudential limit capacity, commonly known as asset swap capacity.
This allows a client to access the offshore capacity of an institutional investor rather than using their personal offshore allowance. The client doesn’t need tax clearance for that investment, and the amount is determined by the asset swap provider’s available capacity. However, there are trade-offs. “All the flows need to go through that asset swap provider,” Rhodes says. “When you are redeeming or encashing your investments, it goes to the asset swap provider and gets paid out to you in rands.” For clients who want to externalise assets and keep them offshore, an asset swap may not be the right route. Advisers also need to consider whether the investment is held by an individual, trust or company, as the tax implications may differ.
Ultimately, offshore investing requires a joined-up advice process that creates both responsibility and opportunity. The clients who benefit most are likely to be those whose advisers treat it as a core part of long-term financial planning, and not merely as a product sale.
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