For most clients, it combines diversification, risk management and the need to structure wealth effectively for long-term wealth creation and intergenerational wealth transfer.
One of the strongest behavioural drivers is home bias, the tendency to favour familiar local markets. In a South African context, that often results in investment portfolios that are concentrated in a relatively small opportunity set. Investing offshore directly addresses this by widening exposure across geographies, asset classes, sectors and companies that aren’t accessible locally.
It also plays a key role in managing portfolio risk. Offshore exposure helps diversify away from South Africa-specific economic and political risks, while providing a hedge against rand volatility. For clients with future foreign expenses, such as education or emigration, the ability to hold assets in hard currency becomes even more relevant. While these reasons are very important, the suitable offshore solution ultimately depends on the client’s specific objectives.
Start with the client’s objective
The reasons for investing offshore vary widely. Some clients want broad diversification or reduced exposure to emerging markets. Others are solving for specific outcomes, such as funding offshore expenses or relocating. These differences matter.
A portfolio designed to improve diversification will look very different from one intended to support emigration. The allocation to investment components, product requirements, and ownership and beneficiary nominations all shift depending on the end goal.
Allowances and alternatives
Momentum Wealth International accommodates different ways for clients to externalise capital. The most straightforward route is through personal offshore allowances. Clients convert rands into foreign currency via an authorised dealer, who handles the regulatory reporting and transfers funds offshore.
The investment is then held in the client’s name. Some clients already have offshore capital, through prior investments or employment abroad, which can be invested without using these allowances.
However, not all clients have this option. For example, South African trusts and companiesdo not receive foreign investment allowances under current regulations. Some individuals may have already used their allowances. In these cases, a prudential limit capacity provider (also referred to as an asset swap provider) offers an alternative.
The prudential limit capacity provider utilises its offshore capacity to invest through Momentum Wealth International. The client remains the beneficial owner, but transactions flow through the provider and proceeds are settled in rands. This route avoids the need for tax clearance and provides access even when personal allowances are unavailable.
Choosing the right product
Momentum Wealth International offers two core offshore solutions: the Global Wealth Investment and the Global Wealth Endowment. The Global Wealth Investment is simpler in structure, giving clients flexible access to their money. It allows for joint ownership, providing basic continuity between clients. However, it offers limited support for more complex succession planning.
The Global Wealth Endowment, by contrast, is built for longevity and legacy. It is available as either a Capital Redemption Bond or a Life Insurance Bond. The difference lies in how the policy is structured, whether it includes lives assured or not, but both fall within a framework designed for long-term wealth transfer.
Where the Global Wealth Endowment stands out is its ability to support intergenerational planning. It includes a wider range of succession features that allow advisers to structure ownership, beneficiary arrangements and wealth transfer more deliberately.
Structuring matters as much as selection
Selecting an offshore product and the underlying components is only the starting point. The real value often sits in how the investment is structured. Ownership, beneficiary provisions and the treatment of proceeds on death all have practical consequences.
Poor structuring can lead to delays, administrative complexity and unnecessary costs. Done correctly, structuring an offshore endowment can streamline estate administration, reduce executor fees, and mitigate tax exposure – including capital gains tax and estate duty, while also minimising situs tax risk and avoiding the need for a lengthy foreign probate process.
These considerations become more important in cross-border and multi-generational scenarios, where assets, beneficiaries and jurisdictions may not align neatly. With the Global Wealth Endowment advisers can align investment structures with estate and legacy goals in a practical, efficient way.
Bringing it together
Offshore investing is not a box to tick. It’s a set of decisions – allocation, access, product choice and structuring – that all need to work together. For advisers, the key is to anchor each step in the client’s objective. Diversification, currency protection and global access are all valid reasons to invest offshore. But they lead to different solutions. Momentum WealthInternational’s offering addresses the practical realities behind those decisions: how to get money offshore, invest it, and structure it so it holds up over time.
For your gateway to global investments, visit Momentum Wealth International here or speak to your Momentum consultant for more information about how offshore investing can help clients build and protect their financial dreams globally.
Momentum Wealth International Limited, registered in Guernsey (registration number 30830), is licensed by the Guernsey Financial Services Commission to conduct Investment Business. Momentum Wealth International Limited is an authorised financial services provider (FSP 13495) in terms of the Financial Advisory and Intermediary Services Act 37 of 2002 in South Africa and part of Momentum Metropolitan Life Limited (registration number 1904/002186/06) (South Africa), an authorised financial services provider (FSP 6406) and registered credit provider. Momentum Wealth International Limited is part of Momentum Group Limited (registration number 2000/031756/06) (South Africa).
Momentum Metropolitan Life Limited, Guernsey Branch is licensed by the Guernsey Financial Services Commission under the Insurance Business (Bailiwick of Guernsey) Law 2002 to carry on long-term insurance business. Momentum Metropolitan Life Limited (registration number 1904/002186/06) (South Africa), an authorised financial services provider (FSP 6406) and registered credit provider. Momentum Wealth International Limited and Momentum Metropolitan Life Limited Guernsey Branch are part of Momentum Group Limited (registration number 2000/031756/06) (South Africa).
