Chris Ball, CEO of Hoxton Wealth, discusses the company’s focus on wealth management for internationally mobile individuals, particularly in Dubai. Hoxton Wealth, with offices globally, offers fee-based services to high net worth and mass affluent clients, emphasizing comprehensive financial planning. Ball highlights the use of AI for administrative tasks and the challenges of property investing in the current political climate. He also addresses the debate on retirement income withdrawal rates, advocating for a balanced approach between needs and wants. Ball mentions the impact of geopolitical risks and economic trends on their business and the importance of risk-tailored investment strategies. NB This episode contains general information and should not be considered financial or investment advice.
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Timestamps for EP255
- Introduction (0:00)
- Hoxton Wealth’s Services and Client Base (4:59)
- Challenges in Property Investing and Political Climate (5:14)
- Client Profiles and Financial Planning (5:28)
- Investment Strategies and Risk Management (14:43)
- Cryptocurrency and Geopolitical Risks (20:35)
- Economic and Demographic Trends (23:59)
- AI in Wealth Management (31:58)
- Technology and Client Communication (34:37)
- Final Thoughts and Contact Information (35:44)
Takeaways
- The complexity of Global Wealth Management: Managing assets across multiple jurisdictions requires expertise in different tax regimes and regulatory environments, especially for high-net-worth individuals and ex-pats.
- AI’s Role in Financial Planning: While AI may not replace human financial advisors, it helps streamline administrative tasks, reduce costs, improve efficiency, and allow advisors to serve more clients.
- Property Investment Challenges: Rising interest rates and increasing regulation make property investments less attractive, especially for those looking for passive income in retirement.
- Retirement Strategies Vary: Wealth management clients need personalized plans that balance their wants and needs for a comfortable retirement.
- Crypto’s Place in Wealth Management: Chris Ball believes cryptocurrencies are here to stay. However, investors need to be prepared for volatility and risk with crypto, making it unsuitable for many traditional clients.
Links relevant to the conversation
Chris’s business, Hoxton Wealth: https://hoxtonwealth.com/
Chris’s bio: https://hoxtoncapital.com/staff/chris-ball/
Chris Ball’s LinkedIn page: https://www.linkedin.com/in/chrisballhx/
Fundsmith Equity Fund mentioned by Chris in the episode: https://www.fundsmith.co.uk/
Controversy over Dave Ramsey’s retirement withdrawal rate recommendation:
Info on tax in UAE:
https://taxsummaries.pwc.com/united-arab-emirates/individual/taxes-on-personal-income
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Transcript: Balancing Needs & Wants: Chris Ball, Hoxton Wealth, on Global Wealth Management in an Uncertain World – EP255
N.B. This is a lightly edited version of a transcript originally created using the AI application otter.ai. It may not be 100 percent accurate, but should be pretty close. If you’d like to quote from it, please check the quoted segment in the recording.
Chris Ball 00:04
Crypto is here to stay number one. I don’t, I don’t really think it’s going anywhere. I think you’ve got to be quite that, have quite thick skin to invest in crypto and be comfortable with ups and downs. Probably most of these things is, as we saw, kind of pre 22 was that a lot of people don’t really understand what cryptocurrencies are and what drive them, and unfortunately, a lot of people lose a lot of money.
Gene Tunny 00:35
Welcome to the economics explored podcast, a frank and fearless exploration of important economic issues. I’m your host gene Tunny. I’m a professional economist and former Australian Treasury official. The aim of this show is to help you better understand the big economic issues affecting all our lives. We do this by considering the theory evidence and by hearing a wide range of views. I’m delighted that you can join me for this episode. Please check out the show notes for relevant information. Now on to the show. Hello and welcome to the show. In today’s episode, we’re joined by Chris ball, CEO of Hoxton wealth, we talk about his company’s focus on wealth management for internationally mobile individuals based in Dubai. Hoxton wealth operates globally, with offices in the UK, Australia, the US and Europe. The company caters to high net worth and to mass affluent clients, offering fee based services. Chris emphasizes the importance of understanding clients’ needs versus their wants and developing comprehensive financial plans for them. In our conversation, he highlights the use of AI to streamline administrative tasks and the challenges of property investing in the current political climate with various left wing parties proposing radical policy interventions. OK, thanks to Lumo coffee for sponsoring this episode. This grade one organic specialty coffee from the highlands of Peru is jam packed full of healthy antioxidants. There’s a 10% discount for economics explored listeners and details are in the show notes. Okay? Without further ado, let’s dive into the episode. I hope you enjoy it. Okay? Chris ball from Oxton wealth, the CEO and founder, thanks for appearing on the show.
Chris Ball 02:22
Thanks very much for having me appreciate it. Gene, yes,
Gene Tunny 02:26
be good to chat about wealth management and what you’re up to. So you’re based in the Middle East. Is that right? Chris,
Chris Ball 02:34
exactly, yes. I’m based in Dubai. I’ve actually been in the Middle East for 13 years now. So I moved out in 2011 in August, 31 of August. 2011 actually was in Abu Dhabi for nine years, which is the capital of the UAE. So Dubai’s more well known part of the business, well part of the country or part of the territory, but Abu Dhabi is actually the capital, and that’s where a lot of the oil wealth is in the United Arab Emirates. So yes, I’ve been based here for 13 years. Really enjoy it. We built out our business here. My kids were born here. So it’s been, it’s been quite a nice place or good it’s been a good place to me, I suppose, is the best way to put
Gene Tunny 03:18
it right. Okay, and what’s your business involved? What does Oxton wealth focus on?
Chris Ball 03:22
So we’re a wealth management business team. We focus on helping people that are internationally mobile manage their funds. And we’ve also got a UK domestic business as well, where we help people domestically in the UK with their financial planning. You know, we help with everything from helping people plan for retirement, plan for their kids’ education, funding for property purchases, tax planning, insurance planning, all of this good stuff that fits under that umbrella of financial planning. We’re a fee only or fee based service as well. So we don’t get paid commissions unless it’s for insurance related products, but all the financial planning and the investment advice that we give, we charge a fee, which makes us quite unique internationally, because a lot of people still work off the commission only model, and all day, every day, we’re helping people globally manage, manage their money in The in the most effective manner. We typically have people come to us with more complex situations, so maybe assets in Australia, but living in the UAE, or assets in the UK and living in the States. And we’ve got businesses globally. So obviously, in Dubai, where I currently am, we’re licensed and regulated. Also got offices in the UK. We’re regulated by the Financial Conduct Authority. We have offices in Australia, where we’re regulated by ASIC. In the US with the Securities and Exchange Commission sec, and in Europe, our base is in Cyprus, which gives us that global coverage and enabling people move around to, you know, to manage their. Their their money and their funds and their planning more effectively. Gotcha.
Gene Tunny 05:03
And what’s your client base look like, broadly? Is it a lot of expats? Yeah,
Chris Ball 05:09
a lot of them are gene A lot a lot of our clients are expats or internationally mobile. Funnily enough, a lot of them have gone back to their home destinations as well now. So we have quite big footprints, dostically, with domestic what you would see is domestic clients, but it’s they’ve lived internationally, and now they cut, now they’ve come back. But, yeah, we, we typically help people with more complex financial planning needs than, you know, I’ve been a plumber and have, you know, put away a bit of their retirement, and they just want someone to manage it. So typically, we’re dealing with assets in multiple countries, and helping people plan for the next generation and how to how to pass it
Gene Tunny 05:46
on, right? And you have a lot of high net worth individuals. We
Chris Ball 05:51
do, indeed, yeah. So we deal with what we call mass affluent and high net worth individuals. We don’t have too many ultra high net worth individuals that we deal with our service or how we you know, the advice that we provide is is more geared to towards mass affluent and high net worth individuals, but typically, like I said, it’s more complex planning needs. So assets spread around different tax taxation rules that you need to take into account different regulatory regimes because they’ve got assets in different places and really working with them to find the best solution for them and their families,
Gene Tunny 06:27
right? Okay, before we I want to ask you a question about that. But before we do that, can you explain what do you mean by mass affluent versus high net worth? I mean, I just use high net worth individual, I sort of had an idea in my mind of what it is, but I wasn’t thinking too specifically. And then you mentioned ultra high net worth. How do you distinguish between those categories? We typically
Chris Ball 06:51
do it in kind of investable assets. So we’d say, let’s say I don’t know, half a million, up to a million, or that’s probably more like 250,000 up to a million, of assets we would class as what we call mass affluent. So there’s, you know, a lot of those people, and they’re affluent high net worth, we typically say from one to 5 million, and then ultra high net worth would be 5 million plus.
Gene Tunny 07:15
Gotcha, okay. And you talked about how you help them manage their their affairs. What are the typically, what are the things you look at, or what are the issues you deal with? I mean, you mentioned assets in different jurisdictions and tax I suppose I’m wondering, how do you, how do you go about finding a solution for your clients? A
Chris Ball 07:36
lot of people come to us with a very you know, they typically come in with one thing that they want to get, you know, one thing they want to get sorted. So let’s say a lot of our clients, what we call us connected people. So they have assets in the US, but they no longer reside in in the United States. So we would work with them to help them manage those US assets when they no longer reside in the US. But what most people really want to know is how much and when. So how much do I need and when can I stop working if I want to? Yeah, and you know, they’re the type of questions that we ask people because it’s difficult. You have to look holistically at all of their assets. You need to understand what their objectives and what motivates them and what they want to do, how much and when is very broad. How much you need will depend whether you want to fly business class, or you know you’re happy with economy, or whether you want five holidays a year, or you just want to go on one, whether you just want to travel domestically, or whether you want to live internationally, whether you want to support your kids, all of these things. It’s about questioning and listening and trying to find out, ultimately, what’s important to the client, to help them understand how much that they will need when they want to stop working. Now, where, you know, we kind of split that into kind of two buckets, which is, you know, what do I what do I need? You know, what’s a want, what’s a need, I suppose the best way to describe it. So what do I need to survive? And what do I want on top of that? And you know that also helps us understand realistically when they can retire. So you know, if you want $200,000 a year of income, and you’ve only got half a million dollars saved up at the moment, between your assignment assets in your bank account, you’re going to need to work for a bit longer, unfortunately, and helping them understand when that, you know, is likely to be given how much they can put away. And, you know, looking at realistic returns, and also stress testing that and flexing it as well. Yeah, is important. And you know, they’re the kind of things that we do, and they’re the kind of things that we really help people with. It’s about helping them develop that plan.
Gene Tunny 09:45
Yeah, gotcha. And you do financial modeling. How do you actually come up with that advice?
Chris Ball 09:51
So we’ve got an app that we have. So the first kind, I suppose, the first kind of step is, is that we would look to help people understand where they are. Are in the journey right at the start. So, you know, it’s great knowing where you want to get to, but if you have no idea where you started from, you’re not going to know how to get there. Very simply. There can be multiple ways to get to destination. So first off, it’s really getting a, you know, building a balance sheet, building a view of your net worth, of what you currently have. So we can get a good picture of where you currently are. We then go to the next phase, once we’ve got that. And we do this all on our app, our Hoxton wealth app, it’s free to download, even for people that aren’t clients, and they can go through this same exercise. The next is understanding their objectives, what’s important to them, understanding what they want out of life. Like we just said, The next phase is the modeling gene, which is we do through Cash Flow Planning, so ultimately helping them understand how much, and then looking at when. Then it is developing out the financial plan with them, step four, and then step five, which in my view, is the most important part, is constantly reviewing that with them every, every year, every six months, to make sure it’s still in line with what they want, making sure, you know, if there’s been any life changes we’ve, we’ve been working with them to ensure that their plan still works, or in making any tweaks to it if we need to.
Gene Tunny 11:17
Yeah, okay. Oh, that’s that’s good. And Have you followed this debate in I’ve seen it on YouTube between Dave Ramsey and and other financial advisors about what percentage you can take out of your your retirement funds each year and live on without running the risk of running out of money. And so one of Dave Ramsey’s colleagues, George Carmel, I think it is He. He was saying, Oh, be really conservative. There’s a he was saying 3% I think the fire people financially independent retire early people say 4% and then Dave Ramsey goes, no, that’s just too conservative. You can take 8% out or so, yeah, it was, yeah, but no one else agreed with Dave. That’s a huge controversy on about that bit of advice. I don’t know if you had a if you came across that at all, or had any views on that, but I’ll put some links in the show notes anyway, if people are interested in in checking that out. I just thought it was interesting that there was that even with someone like Dave Ramsey, who’s a well known financial advisor, he Yeah, that advice just seemed a bit yeah. It was very contentious. So there’s still some, it’s not a, I guess there is an element of that is up for debate and some of this advice. And suppose it depends on what rates of return you’re assuming and what level of risk you’re willing to tolerate. I don’t know if you’ve got any thoughts on that at all. Chris,
Chris Ball 12:55
yeah, I think the issue with kind of operating this, kind of, what the rule of four some people call it, it’s, you know, 4% which is the fire people like you said it’s, you know, it’s kind of widely adopted, I think, by a lot of planners. I mean, really, again, what we look at is, is okay, so needs and wants, you want your needs, ideally, to be built up with some kind of fixed level of income, because you don’t want to be worrying about your needs in retirement. So far, at the moment, what an area that we’re looking at for a lot of people, is using those needs or getting those needs funded by annuities, if you can do that when interest rates are high, and lock it in now, actually, that gives you a really good base in the US. You’ve got things like social security in the UK, state pension, etc, that can go towards that. But building that solid base up can be, can be a very sensible and prudent thing to do, because then you haven’t got to worry about the needs. With the wants, you can be more flexible. And typically with the wants, you want to be more, you know, in it, and you know you’re talking about 4% but you might actually want to take out 8% in the earlier years, and then 3% later on, as life tends to slow down, and that’s what we see a lot of as well. As people get, you know, older and maybe less mobile and want to go on less holidays, then you know that what’s the point in taking out more you really want to spend more in the earlier years? Well, probably when you can enjoy it, and then less than the later years, when you know, potentially, you know, health or or, or other issues, and getting around might, might prove a problem. Um, ultimately, what you don’t do is die the richest person in the graveyard, either way. Yeah. But also, you don’t want to be having to go back to work at 75 because that’s no fun for anyone, because you’ve run out
Gene Tunny 14:39
of money. Yeah. Yeah, exactly. So that point you made about, okay, make sure they get a steady, dependable income. And you were saying, annuities. What about investment property? To what extent are you getting? Are you advising them on the types of investments to generate that steady income? Do you have thoughts on. That, Chris,
Chris Ball 15:00
I think, I think property investor. I mean, look, it depends what parts, what parts of the world you’re talking about. So property investing, for a number of years, has been in vogue. So a lot of people have really found it attractive, or wanted to be a landlord. Now, what we’re finding is, with it rising interest rates, is it’s not very attractive to be a landlord. And actually, there’s a lot of headaches that come with being a landlord. So mortgage payments have gone up, but rental increases haven’t gone up as much. There’s very there’s more, you know, there’s a lot more socialist movements in the western world as well now that are making it more difficult to become a landlord. And, you know, put pushing, uh, pushing tougher regulation and on on landlords and how they operate, and then obviously, you’ve got all the maintenance that goes along with it as well. Do you really want to be trying to arrange a plumber in your 70s when you’re enjoying your retirement because your rental property is gone? Probably not. However, some people are portfolio landlords, and they’ve got, you know, a big you know that they use it for their fixed level of income. It is a great level. It is a great way to earn an income, I believe. And it should probably, you know, you should have some property in your portfolio, the cornerstone of it. But if you want a hands off investment, and you don’t like the day to day running of it, then you know, you should almost forget it, because I think it will become more of a job in retirement. It’s like most things, you’ve got to really want to do it and enjoy it, whereas your more traditional style investments, much less hands off, much more liquid. You know, there’s no management involved really, you know, by dividend paying stock or something like that. So I feel that more people are going to creep back into that side, and property will become less in vogue as we go forward. But, yeah,
Gene Tunny 16:48
gotcha. So can I understand? I just want to understand, are you, are you advising on the specific investments they should make, where they should put their money, or you just advising on the broadly what they should be saving what the broad asset allocation should
Chris Ball 17:04
be. So we’re holistic financial planners. We do take into account people’s risk tolerances and then ultimately help them devise investment portfolios that are suited to their risk. You know, we everything we do is risk created for our clients. Ultimately, we don’t want to be putting someone in 100% equities or a single stock equity, if they are if they won’t sleep at night when the market goes down by 10% you know, it’s all about what tolerance that you have to risk and how comfortable you can get with taking on risk yourself. But you know, typically, Gene we don’t advise on individual stocks and shares, so we’re not saying, buy Apple, sell Amazon, buy Tesla, sell Nvidia. They probably don’t want to sell nervidia at the moment. But ultimately, what we’re set what we’re saying to them is, is that we are broad based, indexed investors. We have a few actively managed funds in there with active managers that we feel have a good chance of beating the market over time due to their investment philosophy, which is typically long term investing. But we are in this for the longer term. We’re not day traders, we’re not jumping in and out. We’re not jumbling around asset allocation. We’re not trying to be territory specific. It’s it’s broad based, indexed investing is what we typically do,
Gene Tunny 18:24
yeah. And so those active investors, or the fund managers, where are they based? Are you able to say anything about them? I mean, I recognize it might be confidential, but what sort of businesses are we talking about there?
Chris Ball 18:38
So one of the funds that we invest in is a fund called fund Smith. I don’t know if you’ve ever heard of them before, by a guy called Terry Smith. So he’s the UK’s answer to Warren Buffett. They run about a 50 billion US dollar equity fund. They do, you know they do really well. He’s actually in our office yesterday, talking to our team. So we invested in it, in their active fund, other funds that we’ve looked at before, Blackrock world technology, we found that’s been good fun to get technology exposure, and there’s a couple of others as well. But really what we’re looking for is long term over performance of the equity market, which, as we know, it’s very difficult for a active manager to do over a long period of time. But there are the kind of, there are the there are the individuals that can potentially do it. And ultimately, I know it’s very difficult to pick them, and statistically speaking, it’s unlikely that they will over long periods of time, but we find it just offers, you know, that kind of passive, active hybrid can be quite nice and can offer some good returns to,
Gene Tunny 19:41
okay, so, well, a combination of passive and active. Okay, gotcha, gotcha. And how did you come to pick those funds you were looking at their historical performance, or you just, I mean, I imagine they do a roadshow, they pitch to you. I mean, how do you make the decision which, uh. Which fund manager to go with. So we
Chris Ball 20:01
have a fund research team that are constantly looking at different managers and speaking to them. We have a buy list, and then from that buy list we, you know, we essentially drill down. We have investment notes on each and then we’ll drill down and pick the underlying model portfolios. So we don’t tend we tend to run model portfolios again. Our our planners are financial planners. They’re not investment advisors. They’re two separate things. So we have a set of investment advisors that construct the portfolios for the financial planners. Gotcha?
Gene Tunny 20:35
Okay, yep, yeah, that makes sense. And I should ask, because I’ve had a few guests on the show talk about crypto, and what are your thoughts about cryptocurrency?
Chris Ball 20:46
I think crypto is here to stay number one. I don’t, I don’t really think it’s going anywhere. I think you’ve got to be quite, quite thick skin to invest in crypto and be comfortable with ups and downs. Probably most of these things is that, as we saw, kind of pre 22 Hey, it was during 2021 when the market, the crypto markets, got up to their highest points, was that a lot of people don’t really understand what cryptocurrencies are and what drive them. And unfortunately, a lot of people lose a lot of money when your next door neighbor becomes a expert in something. It normally means that the market is getting pretty hot and it’s time to get out. Unfortunately, when you’ve got people shouting to the moon every five minutes, then you know it’s it can make things slightly more difficult. But I do think, if you are happy for a large risk rated return, are you happy for a very big upside, but also happy to stomach that the big downside that can go with it and the volatility, then I think crypto does present an interesting opportunity. And like I said, I think it’s here to stay, but that’s not something that we would typically advise on. That’s just kind of my personal opinion on it. But as a business, we, we aren’t regulated, to advise on crypto, right?
Gene Tunny 22:01
Okay, yep, gotcha. And how concerned are you with geopolitical risk at the moment, particularly since you’re in the Middle East, is that affecting your your advice at all? Yeah.
Chris Ball 22:15
I mean, look, we don’t advise locally in terms of our you know, we’re not investing in local assets here in the Middle East. Obviously, political tensions are rising with, you know that Hamas and Israel, and now Hezbollah and Israel, that seems to be getting stronger. Obviously, if there is an out and out war, that wouldn’t be good for the Middle East, but you would expect things like oil prices to rise pretty rapidly as a result of that, especially if it’s affecting especially for other parts of the Middle East, getting involved as well, Saudi UAE, other bigger players, that would not be good necessarily, for for the overall region, in terms of locally. Are we seeing anything on the ground? No. I mean, this business is normal. You actually hear very little about it, unless you’re reading a lot of the publications. It’s not impacting your daily life in any way. Obviously, we’re looking, from a investment, short term investment perspective, at what’s happening in the US. And you know, seeing, we’re seeing how then elections in November will play out Ultimately, though, we don’t think a lot of it will impact too much. I think you know, if Miller Harris gets in, then ultimately it will continue. How, how will what we’ve seen with Biden more the same, and then obviously, if Donald Trump gets in, you know, we know that he tries and pushes up the markets. We might seem see a bit more of a short term push in it. But really, you know, the Constitution in America is, is, is insanely well guarded, and doesn’t really allow governments to make too many horrendous decisions. You know, it has to go through. Congress has to go obviously, before it can, you know, be put into action. So it’ll be interesting to see how it goes and what happens. But I wouldn’t expect anything too drastic, right?
Gene Tunny 24:07
Okay, okay, fair enough. And I’d like to ask about the economic and demographic trends and how they’ve affected your business and what you see happening over, say, the next decade or two. I mean, are you seeing changes in the demographics of your client base? Are you seeing more of the high net worth individuals due to I don’t know to what extent you’d you’d see it, but there are concerns expressed by some about growing inequality globally, the rich getting richer, the poor getting poorer, so to speak. Do you see that those impacts in what’s happened with your business, the growth of your business, the composition of your client base?
Chris Ball 24:53
Yeah, I think yes, and no, I suppose that there is obviously that worry that the rich are getting richer and the. Were getting poorer, that that equality gap, I think what we’ve seen more of is the flights of wealthy people to places like the Middle East, or places with lower taxes, as we’ve seen Taxes increase. And obviously, you know, that was bound to happen with the amount of money that they were spending during covid and, you know, trying to push the push through more money into the economies that’s got to be paid back for from somewhere. And I think it’s kind of like payback time now, especially in the UK, we’ve got a Labor government in now, and Keir Starmer came out and said, those with the broadest shoulders would bear the cost of it. You know, for everyone, basically, you know, if you’re rich, you’re rich, you’re going to get taxed more than anyone else, so that obviously, what concerns a lot of more wealthy people, I think that you’ve got the one end of the spectrum, which is the ultra high net worths that it doesn’t really matter, and they will go wherever they need to, and obviously they can pay for the advice. It’s more that kind of mass affluent ultra high net worth that it will really pinch the can’t move as easily. And, you know, we’ll, we’ll get caught up other things that we’ve seen, obviously inflation and rising interest rates. You know, that’s that’s been interesting, because we’ve obviously seen money come out of equity markets and go into things like money market instruments. So, you know, there was an insane amount last year in money market instruments, because interest rates were so high and the risk rated return meant that you could keep it there, and you were getting over 5% return. I mean, you know, why would you be investing in equity markets that had the potential to go down quite a lot? You know, technological advancements, we’ve obviously seen things like aI really driving the markets this year as well, and that’s had a big impact whether that kind of shine wears off, and what happens over the longer run is this, is there a lot of hype with looking at some of the PE ratios of some of the S, p5, 100. I mean the top seven, all of them are over 30. I think bar meta, which was at 29 that’s a lot. I mean, I think it was something like Tesla, yeah, he was paying, I think it was nearly double check, but I’m pretty sure it was like 74 I suppose. I mean, how can a car manufacturer be beat that? I know they’re trying to build themselves as more as a technological business, but crazy. So a lot of things like that are driving our business as well, because ultimately, it’s driving more wealth to people that hold that and have back technology. Shift to ESG, another one you know that we’ve had, we before, covid, if you remember, everyone was on this call, whole kind of environmental, social and governance piece. It seems a little bit less in your face now, but I think we’ll get back to that as as things, as things die down a bit more. Maybe not with a Republican, with a with a Republican Congress or republican president, but we shall, we shall see how that plays out. There’s so much that goes on that that impacts how we operate, but it’s really just trying to put your finger on it, isn’t it, and see which things really move the move the dial.
Gene Tunny 28:09
Okay, we’ll take a short break here for a word from our sponsor.
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Gene Tunny 28:43
Now back to the show. You remind me about the tax settings in the Middle East. Said is, am I right in remembering they don’t have an income tax is that right? Some
Chris Ball 28:57
countries do, but ultimately, where I’m currently based now, the United Arab Emirates, doesn’t they recently introduced corporation tax, but there’s no income tax on individuals. Saudi Arabia, no income tax. QA no income tax. Qatar, no income tax. Bahrain, no income tax as well. So the GCC zero income tax for individuals,
Gene Tunny 29:22
right? And, I mean, Saudi’s got, I guess, does UAE get oil income too, like the Saudis do from their their state owned oil company, yeah, and have a soft and wealth fund. Okay, I’ll have to, I’ll look a bit more into it, but yeah, it might put some links in the show notes. So it’s interesting, isn’t it? That’s one of the reasons people are attracted to to Dubai, for example. And you get a lot of really good people go to Dubai. But then there’s also concerns about money laundering. I’ve seen that there’s concerns about Australian outlaw motorcycle gangs, their members. Buying up luxury apartments in Dubai high rises. There was a 60 minute story about that couple of months ago. So yeah, Dubai is very attractive to people with money from all sorts of different places in the world, all sorts of
Chris Ball 30:16
backgrounds, exactly. I mean, Dubai was on the gray list for money laundering, until recently, where it’s come off. So I think that was the kind of jolt that was needed locally. And they take it very, very seriously. So the banks over here, you know, probably more so than you get in Australia and in the UK, constantly asking you, where’s the money come from? You’ve sent money. Can you prove where it’s come from? Like, there is a there is a high area of transparency that’s needed with the banks. You can’t operate in this opaque nature anymore. You know, cash transactions for properties, they’re trying to wean out and things like that. So they are making it more and more difficult and trying to take it seriously, as you would expect from an economy that is developing and wants to be developed, and is doing, you know, all the good things that they’re doing it, it would be a shame to get tarnished with that, with that brush, but, yeah, I mean, look locally the wealth is earned from, you know, the locally Abu Dhabi, the wealth is earned from will that is then, you know, that has been their main source of income. They’ve developed the Abu Dhabi Investment Authority, and then various subsidiaries around that as well, which is their sovereign wealth fund, which ultimately they go out and invest in other businesses as well to try and buy returns. So when the oil does run out, they can continue to support the country as well. And obviously, very similar to what they do in likes and Norway Saudi Arabia’s got there, I think it’s the the PIF, the public investment fund as well. So, yeah. So, you know, it seems like a lot of these Gulf states, that’s how they want to go and do things, which is obviously great, because if that keeps income taxes down, then then that’s obviously good for them to attract wealth as well, which will ultimately be spent indirectly in their economy as well,
Gene Tunny 32:00
yeah, yeah, okay, and that’s, that’s good, Chris, it was a good overview of different, different factors, different trends. What ask about AI. You mentioned AI and you were talking about, you know, what that meant for the market, for investment opportunities, what does it mean for you? What does it mean for wealth management? Are you taking advantage of it?
Chris Ball 32:22
Yeah, definitely. I think that AI will not replace advice, because advice is about questioning and trying to work with you to get answers. But where, I think you know, ultimately, people want to see the whites of people’s eyes when they when they invest. It’s it’s nice to deal with a person. And I don’t think you’ll replace that in the in the near future. Anyway, I think ultimately, AI, what we’re using it for, is to try and limit the amount of repetitive tasks that we have to do, trying to take, you know, trying to improve our administration, processes, data entry, processes, all of these things by using AI, which ultimately, hopefully drives down costs, increases profit margins within the business, and means that ultimately we can try and help a wider range of people that need our services. Because, again, you were talking before about that equality in terms of net worth that exists in wealth management as well. I mean, you know, there’s a subset of people that could probably really do with advice, but don’t get it because it’s not profitable for firms to be able to service them. They can’t do it. They can’t run it at a loss. So yeah, so it’s we all. I think we’ll see more AI tools come in to offer simplified advice to that subset of people, and then as their wealth accumulates, then they’ll be able to deal with maybe more face to face advisors, where, when it becomes a, you know, feasible for them and for the company?
Gene Tunny 33:51
Yeah, yeah. So there’s talk about robo advisors. So is that that’s what you’re thinking about. For the people with the smaller amounts of of funds they there’d be automated advice.
Chris Ball 34:03
Or, yeah, I think, I think Robo advice is an interesting one. I don’t think a good financial planner has ever lost a client to a robo advisor. Okay, robo advisors more. I’ve got $100,000 or $50,000 I don’t want to use an advisor. I just want someone to place the funds for me. So it’s more. I think it Okay. Probably replace investment advice, but the financial planning aspect is much more personal.
Gene Tunny 34:25
Yeah, gotcha, because you have to take into account the personal circumstances figure out what Yeah. The thing I liked how you were, you were talking about needs versus wants and the standard of living that they want in retirement. I thought that was, they were good points, right? Oh, okay. And how, finally, how are you using technology to interact and communicate with your clients? So, how does so, do you have an app or a portal that they Yep, okay,
Chris Ball 34:56
so we’ve got the Hoxton wealth app gene, which is our client portal. So they can, like I said, they can see their overall net worth, their plans, their policies, they can upload their documents. We communicate through push message out to them and things like that. And we’re really developing that out to become our one stop shop to communicate with clients. We have our back end, which is our operating system, effectively, which is called matrix. And that is how we, how we, you know, do fact finds, how we manage our client relationships, how we help the advisors manage more clients efficiently, rather than through paper based things, losing data, you know, data security, data integrity, is super important to us, and also, you know, it’s, it’s, you know, worth a lot to a business in terms of management information and the like. To, yeah,
Gene Tunny 35:46
absolutely okay. And Chris, what, what? Where can we find more about you? Do you have a podcast? Do you have a newsletter that people can can subscribe to? Yep,
Chris Ball 35:57
so I feature regularly on a podcast called financial planner life. But the best place to find out more about me is through my LinkedIn profile, which is Chris Paul. If you just type Chris Paul Hoxton into the search bar, it will come up and then also, obviously our company website, http://www.hoxtonwealth.com, you’ll be able to see more on you know what we’re about and what we’re doing and how everything’s going.
Gene Tunny 36:23
Okay? Well, I’ll put links in the show notes to those, to your LinkedIn, for sure, and to your to your website. Found this really informative. And, yeah, good discussion, Chris, I like the point you made about, yeah, the risk to investment properties. We’re seeing that here within Australia, because we’re having a, you know, major housing crisis, and I guess, yeah, big increase in homelessness. That was a sharp increase in rents about a year or maybe a year or so ago, and now you’ve got a political party, which was the Greens political party, and it’s morphing into a party of renters, and they’re getting a lot of traction because there are a lot of disaffected, you know, people out there who, who are, you know, not happy with the housing situation. And so, yeah, the great, but the so I understand where they’re coming from. The issue is that the policies that The Greens are advocating for are not actually correct the problem, and could actually make it worse with their the idea of red freezes and caps and things so that all sorts of silly, you know, really bad economic policy. But yeah, I thought your point was well made, and it did it. So, yeah, yeah, absolutely, that’s a really good point. Any, any final thoughts before we wrap up?
Chris Ball 37:47
No, that’s it for me, really, unless you’ve got anything. But thanks very much for having me on. Really appreciate if your if your listeners want to download our app, the Hoxton wealth app, type it into the app store, they can download it for free. Yeah. And if you ever need anything, let me know. Will
Gene Tunny 38:04
do okay? Chris ball from oxen wealth, thanks so much for joining me.
Chris Ball 38:08
We appreciate gene thanks very much.
Gene Tunny 38:11
Righto, thanks for listening to this episode of economics explored. If you have any questions, comments or suggestions, please get in touch. I’d love to hear from you. You can send me an email via contact at economics, explore.com or a voicemail via SpeakPipe. You can find the link in the show notes. If you’ve enjoyed the show, I’d be grateful if you could tell anyone you think would be interested about it. Word of mouth is one of the main ways that people learn about the show. Finally, if your podcasting app lets you, then please write a review and leave a writing. Thanks for listening. I hope you can join me again next week.
Obsidian 38:58
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Credits
Thanks to the show’s sponsor, Gene’s consultancy business, www.adepteconomics.com.au. Full transcripts are available a few days after the episode is first published at www.economicsexplored.com. Economics Explored is available via Apple Podcasts and other podcasting platforms.
