Interview by John Harrison
Why did you decide to live in Moscow, and continue your career in financial services in a completely different environment?
Simply really, I was fortunate to meet and marry a beautiful woman in the United Kingdom. She happened to be from Russia. With the financial crisis looming in 2006, the mortgage and financial services company I was working with was struggling for clients, profits were low and redundancyâs were increasing and I realised that it was time to get out of the UK. Moscow seemed to be a place of opportunities.
I took a position with a financial services company in Moscow and although I quickly realised that I loved the job and helping all my clients, the companies credibility and business ethics left a lot to be desired so I decided to leave. At the same time, I wanted to stay in Moscow, and still felt that I had a lot more to offer the clients whom I had already worked with. The choices were: either set up my own company from scratch, and become Brian Johnson Independent, or find a company that I could actually believe in and trust to work with.
What regulatory basis does your new company work by?
Platinum Financial Services is a Hong Based company; covered by Hong Kong regulatory authorities, So whilst there are limited regulations as such in Russia governing financial services, by using the same regulations as we have in Hong Kong our clients receive a far superior service.
When we opened the office for PFS in Moscow, there were three of us, we had no clients. We had a telephone and some prospective clients names, we had support from head office in Hong Kong, and that was it. We worked 20+ hours a day. Yes, we had to call people and say, âweâre here, please come and talk to us,â but now, a lot of people call us. Obviously this new office is not cheap, itâs actually the most expensive in the whole group, and we have to do quite a high level of business to cover our costs here. But weâre doing it.
Weâve now made a big commitment to Russia. We have a lot of staff in here now, and we will be recruiting more this year. We will be opening additional offices across Russia and former CIS countries. We have a real opportunity to help not just expats but Russians. I see the business going forward.
Whatâs the worst business experience youâve had in Moscow?
Last December our bank account was frozen by the tax authorities because we were a couple of days late filing our quarterly report. That to me was a complete shock. Iâm used to the UK system where if you donât file your tax returns on time, you get a nasty letter. That was just before Christmas when we had salaries to pay. It took weeks and weeks to get the account unlocked, and then we also received a penalty for filing late. Weâll never be late again.
What are the best business experiences you have had here?
Being able to ensure that our clients get the best possible advice. We have genuinely 100% independence. So I can look at a clientâs personal circumstances, his or her lifestyle choices, and I can find exactly the right solution. No ties, no restrictions. And thatâs a great position to be in for a financial advisor.
Is that something that would be difficult to do elsewhere in the world, such as in the UK?
You couldnât do it in the UK because the UK government tightly controls which products clients can have access to internationally to prevent the treasury losing any tax.
But you are using a Hong Kong based regulatory framework?
Yes we operate in all our locations to exactly the same standards and regulatory procedures. I think we are the only financial services company here in Russia dealing with expats and locals who do this.
What are the most popular services?
For Russians, probably real estate purchase and second citizenship are very popular now for obvious reasons. For expats, it is pension planning, making sure that the money that they have earned here is kept safe and well for when they eventually want to retire. A lot of our expat clients have married locals, thatâs pretty standard, but this can complicates things in the future.
If you are a Brit and married to a Russian, and you drop down dead in the UK, the inheritance tax is far more complex than if you had an English wife with a British passport, it could cost you a lot more. It isnât just expats, many Russians who have invested into expensive real estate in the UK and Europe are also oblivious to the fact that they are going to be hammered by inheritance tax. We are not trying to avoid paying tax, but want people to be aware of the facts before it is too late.
Childrenâs education is a big thing that expats are letting themselves down on. Many have children going, like my family, to one of the English schools in Moscow, which certainly costs more than the average UK private school. A lot of parents are fortunate to work for large international companies, or working for an embassy, which pay for the schooling. This is wonderful for the children, but maybe their parents will not be working for an international company or an embassy one day, the children could end up in not very good school, or not be able to go to university because mummy and daddy donât have the money on the day that itâs needed. I canât understand why parents donât set up a childrenâs education fee programme and put away a few hundred pounds a month. It seems crazy that parents are gambling that they will have the money available to continue the education costs when required in this unstable world.
A lot of expats want to buy property in the UK for when they return. They would like to buy a house in say Oxford to retire to, but are shocked to discover that they canât afford to do that. So we help them buy a property in a cheaper location for example, which they rent out with a guaranteed income. The rent is used to pay the mortgage, and they are then able to sell and buy the property they want when they get older. But itâs no good waiting until you are 55 or 60, have just lost your job and want to go back home. This is especially true for younger people, all these English teachers and young professionals in Moscow, they should be buying something now for Â£50,000 or Â£100,000.