Lloyds Banking Group: Lend a helping hand – Richard Musty
The logistics of moving high-level employees and executives from offices overseas to headquarters in the UK, or vice versa, always present a challenge, particularly when it comes to their finances. International private banking director for Lloyds Banking Group Richard Musty discusses the issues faced by inpatriates when relocating to a new country and how the bank has developed a one-stop shop for those moving to the UK.
Everyone who's moved around a lot knows that it's always the little things that are the hardest: from coming to terms with new local bureaucracies, or lack thereof, to finding schools - settling in to a new way of life is as much about getting used to small differences as it is about the big picture. For big multinationals, the process of transferring an employee from a foreign subsidiary to the headquarters - which may be on the other side of the world, in some instances - is full of little things to consider.
Take personal finance, for example. International private banking director for the Lloyds Banking Group Richard Musty says that the first priority for inpatriates is that they can get paid, and have an account up and running. There are so many other issues to consider, too, from organising a home for the family to finding a school for children.
For example, someone arriving in the UK may not have a credit rating, despite having perfectly sound personal finance. They also may not be accustomed to the technicalities of spending money in the new place they call home. And since the stress of getting all this in order can put a strain on an inpat's ability to do their new job, being able to offer support is a crucial priority for a multinational with a globalised work force.
Musty has lived overseas for a number of years in different parts of the world so has first-hand experience of the challenges inpats can face and has seen some changing trends. He sits down with Finance Director Europe to discuss how banks can make life easier for inpats and help them feel right at home.
What are some of the challenges faced by inpatriates when relocating to a new country?
Richard Musty: Well, over the past seven years, we've seen a significant increase in the number of inpatriates coming into the UK. It's increased from around 7% of the population to 15%, and that's become really important to the economy. It's believed that they contribute over £200 billion towards the UK economy overall.
The big challenge for some people is that when they relocate here, they've so many things that they need to consider. First of all, they have got to find somewhere for themselves and their families to live. If they have children, they've got to find a school for them, and then, of course, there are the finances.
What is the international banking solution and what does it offer in dealing with the challenges that someone might face?
We have a one-stop shop, the London Expat Service, provided by Lloyds Bank, which is the first point of contact of the person moving to London. To be eligible for the service you will need a sole annual income of at least £100,000 and be able to attend an appointment in London in the next six months. After discussing the clients specific needs, they can then arrange introductions to our UK and international banking teams to help with opening bank accounts so they can get salaries paid in and sort out the arrangement of credit cards, subject to our lending criteria. On the face of it, this all sounds very easy, but if you're moving to the UK from abroad, you won't necessarily have a credit record, so you need some assistance there, because if you go to a normal high-street bank, it's likely they will turn you down. People move overseas in a lot of instances to create wealth, so they need some guidance in terms of how they can manage that wealth.
We also offer service and financial expertise that some local banks may not provide - from multicurrency banking to complete wealth management.
While our services will be available to many customers, there are countries where, due to legal or regulatory restraints, we cannot provide them.
In terms of expatriation and inpatriation, have you seen the attitudes of organisations change when it comes to putting benefits in place?
I've worked overseas for a number of years in different parts of the world and have seen some changing trends, and I think if you go back 10-15 years, there were some very attractive expat packages for people moving overseas.
There's no doubt these have been reduced, and there's another trend that's emerged where people, or certainly Brits, have moved overseas out of necessity to find employment where they've not been able to get a job in the UK. When you move overseas, it's really important that you plan before you go. You have to have all your affairs in order - your bank accounts, considering what to do with your property, but most importantly you need to talk to a tax adviser so you can structure your affairs appropriately.
What are some of the challenges for a company in terms of payroll and managing finances with international employees?
All companies have their own way of doing things and there is no one-size-fits-all solution, but there are some considerations that will be looked at. I guess salary packages are not always the same as they are overseas - in certain countries, there are other allowances that people get, such as for housing or flights - so companies will have to develop different package structures to meet the local market.
Another thing is that there will be different ways of paying people, so some people might be paid an allowance or a certain amount of money in the country in which they're living, and then a certain amount either in the UK or internationally. Every company is different, and what we're trying to do is help them go through or manage their finances effectively.
What costs are involved for your clients when transferring money online between currencies?
We've tailored our banking facilities to the requirements of someone either living overseas or coming into the UK, so we have a range of different accounts and investment offerings to suit different customer needs. One of the key things we offer is that we don't charge customers for making international payments from their bank accounts. However, the recipient and corresponding banks abroad may charge a fee for receiving payments.
Anyone considering moving money around needs to look at a number of things. The first is what the basic cost is. The second is what kind of foreign-exchange rates they're going to pay and also what the hidden charges are on the receiving bank at the other end, which often links it to the amount of money that's transferred.
How do you see the inpatriate community evolving in the years to come?
I think we'll see some further development in the market as we see more entrepreneurs coming to the UK and more people running their own businesses here, which is great news because it's bringing in talent and it's helping the economy - it's helping the UK prosper.
The London Expat Service is provided by Lloyds Bank.
Lloyds Bank plc registered office: 25 Gresham Street, London EC2V 7HN. Registered in England and Wales No. 2065.
Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under number 119278. Authorisation can be checked on the Financial Services Register at www.fca.org.uk. Eligible deposits are protected by the Financial Services Compensation Scheme. Lloyds is covered by the Financial Ombudsman Service. It subscribes to the Lending Code; copies of the code can be obtained from www.lendingstandardsboard.org.uk.
International accounts and services are provided by either Lloyds Bank International Limited or Lloyds Bank (Gibraltar) Limited. These companies are not and are not required to be authorised under the Financial Services and Markets Act 2000 of the UK and therefore are not subject to the rules and regulations of the Financial Services Compensation Scheme made under that Act for the protection of depositors and investors.