Abstract
M.Com. (Investment Management)
The study explores how investing offshore is being used as an investment diversification strategy by Zimbabwean High Income Earning Individuals (HIEI) after dollarisation. Dollarisation revalued everything that was previously denoted in ZWD to zero. No one was spared as bank deposits disappeared overnight and other investments like pensions and life policies were revalued to nil (Chowa & Mhlanga, 2013). To understand wealth management in a Zimbabwean context, Zaharoff (2004) emphasises the need for adequate planning and sound financial decision-making when faced with financial uncertainty. The purpose of this study is to equip academics and the wider commercial fraternity with practical and strategic knowledge of the Zimbabwean wealth management services industry. The study presents a true Zimbabwean story. It seeks to establish how the turbulent past experiences of the dollarisation period influence Zimbabwean HIEI behaviour today in relation to their wealth management approaches, in order to protect their financial assets against political and economic volatilities in the future. Kurach (2012), states that when seeking to lessen volatility and raise returns, foreign investment can be viewed as the best diversification method in an unstable economic environment.
The study used a qualitative approach in its methodology, making use of research tools such as questionnaires and an interview. A computer-aided system of data analysis was used. The data was collected from HIEIs with offshore investments, those individuals without, financial advisors and the Securities Exchange Commission (the industry regulator). The study concludes that HIEI are able to control the risks associated with the Zimbabwean economic environment by investing in relatively uncorrelated markets. From this research, it is evident that the robo advisor will soon change the way the industry works in the next half decade or so. The Zimbabwean government through, the Reserve Bank of Zimbabwe, has over the past year been putting in place measures to curb the haemorrhaging of foreign currency out of Zimbabwe through various monetary and exchange control regulations. With the growing calls for greater transparency in international finance, the calls against offshore tax havens are growing louder. According to the findings of this study, HIEI feel their wealth is under attack once again and now more than ever, are looking towards offshore investing as a refuge. The findings of the study have identified the desperate urge of Zimbabwean HIEIs to secure their wealth as the main influence driving the offshore investing phenomenon. Further research into the advancement of locally-oriented financial centres is crucial for the development of a sustainable wealth management industry, not only in Zimbabwe but in Africa as a whole.