Forget the Swiss, Come To Asia

A rather odd article (I guess by Sitaraman Shankar) from Reuters:
http://uk.reuters.com/article/idUSTRE64P4C820100526

The story is based around how "the Global rich want trusts, Swiss banks stay wary". It appears that the Swiss banks really want less to do with the "estimated $5-trillion global market" for it "could attract more unwelcome attention from foreign tax authorities".

WTF? Attract "more" attention? Little late don't you think? $2M threshold a problem? Are we talking private banking here or mass affluent?

While there are times when no business is better than bad business, I think this is a case where whoever is doing strategy at the Swiss banks concerned ought to be fired ( unless this is an exercise in disinformation and they are really gearing up their trust businesses). Have they stopped taking money from the same people? Is a trust any more inherently "dangerous" or "cancerous" to the institution than a bank account? Of course not....but if you've been accustomed to numbered accounts and "Red Cross" trusts, I guess you have problems adjusting to the brave (not-so-new) world.

Instead of finding a way to offer tax compliant/transparent structures and really performing due diligence and KYC and avoiding grey/dirty money, it appears they are taking the simple way out and saying no thanks. If you want honey, there will be bees, and bees can sting but there are plenty of beekeepers out there that know how to protect themselves and still get what they want. If it's bankable then it's trust-able. If it's not bankable then of course it's not trust-able.

But when push-comes-to-shove, bankers want assets under their management, not booked with some trustee. AUM that is under trust isn't exactly a selling point when negotiating with a prospective new employer. AUM under trusts screws up your revenue targets as trustees aren't as gullible and stay away from all those high profit funky geared/structured investments, accumulators and swaps. A true banker never puts their client in a trust, only true advisers do.

Obviously I'm biased and have vested interest in seeing Switzerland fall off the map as far as wealth management and trust services go. Just means more opportunities for the rest of us. So yes, pull out of the trust business, get out as fast as you can.