One in eight expats remains ignorant of the local jurisdiction which applies to their bank should it hit financial difficulties.

Despite the financial crisis, one in eight expats remains ignorant of the local jurisdiction which applies to their bank should it go into difficulties, reveal an Expatica survey.

The survey showed that two-thirds of respondents have their money spread over more than one financial institution. A quarter of expats placed all their money in one financial institution, with more than half confessing that they don’t know what will happen should their bank get into financial difficulties.  

This seems surprising considering that banks around the world have either been collapsing, consolidating or turning to the government for state aid following the Lehman Brothers’ bankruptcy in September 2008.

Sophie Seesing, an investment advisor for Finsens in the Netherlands said she was not surprised at the findings as most banks provide information in Dutch and not every expat understands the local language.

“Expats should do their homework and ask their bank which jurisdiction they come under and how much they are protected in the event of a banking failure.” said Craig Welsh, a financial advisor with The Spectrum IFA Group.
 
However, Welsh observed that, as of this year  more people are asking more questions about their bank; its financial strength and its investment activities.

The online survey, which ran from May to July 2009, was filled out by 400 expats from all over the world.
The survey also showed that only 30 percent of expats consult a financial expert or advisor when it comes to money matters. More than half of these expats use the services of financial experts who come recommended through friends or colleagues.

One expat based in the Netherlands admitted: “I don’t have a financial advisor because everything comes under the name of my Dutch husband and I trust that he will take care of everything. Plus it’s hardly worth employing a financial advisor to take care of a couple of thousands of euros, is it?”

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