Joel Barretto

 Of money and financial literacy

By Earl D.C. Bracamonte

In 2016, an HSBC study showed, among others, that US expats living across Asia are the highest paid employees; raking in US$ 126K (roughly Php 6.3-billion) in yearly income - leaving a lot of excess disposable money after paying for the region’s low cost of living.

There are nine million US expats all over the world. In  2015, there were 220,000 living in the Philippines, and that number has grown to an estimated 350,000 at present. These increasing number of affluent nationals are some of the underserved sectors; having been sold investments not suited for their respective situations.

This is the scenario that encouraged financial adviser Joel Barretto to relocate to Manila five years ago, following close to three decades of fruitful stay in the US.

Joel graduated from San Beda University, with a degree in Business, and left for the US in 1987; a few months prior to the stock market collapse that year. After dabbling, for a few years, in sales, a colleague invited him to try his hand in financial planning and has never turned his back from it since. He found his calling and set up his own firm, Abacus, in 1999.

“Abacus Consultancy offers services in realty trust, insurance products, and a suite of different types depending on what clients need. Financial planning is the most regulated US sector because we are fiduciary in nature, like banks and other financial institutions,” shared the 56-year-old financial adviser.

“My firm undergoes a six-step process of financial planning when dealing with clients. We then do analyses with gathered data which includes the goals, concerns, and financial standing of each. Thereafter, recommendations are given. Implementation follows once an agreement is set. We then check on clients, once a year at least,” he continued.

He points out though that the Philippine tax shelter laws are not that rosy.

“Duration of investment intent, whether short or long-term or for retirement, points to how a client’s money is invested. Also, on how inflation rates affect investments in the long run. Sound advice comes before a pandemic, not after. This shows preparedness for scenarios like Covid-19.

“A sound financial plan consists of two things. One is  cash reserve for exigencies. This takes care of expenditures for the next three to six months. The other one is protection. This takes care of family members,  in case of death or disability,” he explained.

Joe will soon embark on a Webinar series where he explains in detail the mistakes investors make with their money. The series will also show which time zone clients prefer. He also does similar advice in his self-named Youtube channel for his expat clients across the globe.

“Financial planning is complicated as it is. Fortunately, the technology now is not the same as it was before where everything was done manually. Compliance then was really strict. Software programs now make projections easier. We only had the phone then to make the transactions, unlike today with its numerous platforms and programs.

“US financial planning and advising was regulated within its jurisdiction before. Now, it is of two - the US and a client’s country of residency - where we deal with tax compliance on universal income. There’s a law that requires US nationals to report all of their investments outside of US soil.

“That law is the FATCA. In 2010, then Pres. Obama issued the Foreign Account Tax Compliance Act that keeps track of its citizens all over the world. Failure to report universal income may result in a US$ 50,000 fine. Thus, some of the investors mistakes include not reporting investments outside the US, not foreseeing retirement planning, and not considering passive foreign income companies,” revealed Joel.

When not busy with money matters, Joel is into mixed martial arts and full contact sports like karatedo, shaolin temple kungfu, and kickboxing.

“My business is based on relationship and trust. I cherish my clients. I’ve watched their families grow, and they become my clients as well. It’s a thankful job. I’m not here just for the short term. I look after them all like they were family and will be always there for them,” confided Joel, at the close of our online colloquy.

As part of his ongoing advocacy on financial literacy, he published a book in 2016, here in the Philippines, entitled “Common Centimos,” to reach out to all those who have questions on money and investments.

Joel Barretto is the only licensed cross-border financial analyst here in the Philippines. He maintains an office here in the country, as well as a registered advisory firm in California.