The title is an ode to the Californian philosopher: Anthony Kiedis
Since Warren and Willy's "Giving Pledge" roadshow hit China last month and the HK Chief Executive's annual Policy Address which included a Community Care Fund, there's been a lot of reverberation about charity and philanthropy going on. I'd just like to put in a word or 2, because I, and my colleagues in the trust industry, are often the facilitators of charitable and philanthropist giving.
Trusts are the often the structure chosen to hold, manage and/or dispense the assets, typically money and property, for the charity/philanthropist/NPOs. Why? Because, a trust is great at legally separating the patron/donor from the assets. The trustee can then independently (with help from various committees/boards) manage and carry out the intended purpose with a greater degree of skill and professionalism then the giver could. Trusts can also go on for perpetuity if needed as most jurisdictions waive the rules against perpetuity for charitable/philantropic trusts (CPTs) for the greater good of society. Many times CPTs are named or called Foundations (which have nothing to do with the civil law entity) but is technically just another a trust. Some CPTs are quite small, private, unregistered and many details of the donors are kept to a minimum. Others are registered charities and can have a team of dedicated staff running it.
Although the principles are the same, CPTs can be quiet different than your typical private family trust. Firstly, there is tax. Unlike most private trusts, most CPTs are set up as tax-transparent. CPTs that seek/accept public donations are usually required to be registered, file tax returns - often to retain a tax-exempt status and issue tax receipts donors like so much, and sometimes subject to independent audit. Compliance is a big issue and if you're big, like a Red Cross or Community Chest then you can image the volume of record keeping as you have millions of dollars or assets, hundreds of thousands of donors and beneficiaries. CPTs that are "public" need to carefully operate so as to carrying out the purposes intended. Many eyes are upon you. For those trust companies that have never dealt with CPTs or large ones, my word of advice is don't. It takes a special skill set that normal trust officers and administrators do not have. CPTs are no place for the inexperienced. For many, CPTs are a losing proposition because it can consume time and resources like nothing like else you have ever encountered.
CPTs have been around for ages in Asia, just not many of them. There are myriad of articles floating around about why Asians are "less giving" then their Western counterparts and most them have some valid points. Mass wealth in Asia is a relatively new phenomenon. Much of these past few generations has been about surviving, making money and hoarding money, not giving it away. You never quite know when enough is enough for you could lose much of it tomorrow. That is the environment that the nouveau rich in Asia have been growing up in. Worrying about losing one's wealth borders on paranoia.
Many jurisdictions require registered charities to make their financials public. Take a look and you will see that Asians are not adverse to giving as many NPOs/CPTs have accumulated quite significant funds, so much so, you need to start wondering whether they are "worthy" of receiving more of your charitable dollar. Here's a recent tax case where a HK charitable body (a church), took property it owned and made a BILLION dollars and decided it should not have to pay any tax [CHURCH BODY OF THE HONG KONG SHENG KUNG HUI v COMMISSIONER OF INLAND REVENUE [2010] 2 HKC 475]: http://www.hk-lawyer.com/innerpages/37/2010/6/Taxation%20and%20Revenue/37
Religion and tax aside, I don't think this charity needs or deserves any of my money. Of course, there are those that use the guise of CPTs and NPOs for less than admirable purposes, further dampening the giving spirit.
I would say about 30% of the private trusts/wills have some charitable intent and not just because they need a "default beneficiary". However, the amounts are typically small, say a few percentage of the trust fund are earmarked for charity. The primary concern that most settlors have is the financial well-being of their family. And in Asia, often the family extends to siblings, uncles, aunts, nephews and nieces to cousins. I estimate some two-thirds of letter of wishes/trusts/wills leave something for remoter relations which I find rarer for Western clients.
But as the living get richer, their desire to give back grows stronger. Virtually every HNWI or UHNWI I have dealt with has made some contribution of 1 kind or another. The desire is there. There is no typical philanthropist is Asia. I have seen tens of millions donated anonymously, I have seen some go to great lengths for recognition (named building/wing, etc.). I have seen some that just do it with no strings attached, while others are dead-set on pulling the strings. I have those that write the cheque and go away. I have dealt with those that roll up their sleeves and help. If there is anything about Asian donors, it is that they are often quite specific about who/what causethey want to help - it may be some specific school, town, or heath issue,etc. Asians are the least likely to give to a "general" fund. My only advice is be prepared go in with an open mind spend the time to listen and understand what the donor wants.
Short and simple but covers a lot of issues: http://www.stepjournal.org/archive/2010/philanthropy_advisor_june/international_giving.aspx
Monday, October 18, 2010
Wednesday, October 6, 2010
How Many Trust People Does It Take To Change A Lightbulb?
The countless "lightbulb" jokes often satirize or mask pain and suffering.
Here is an ad (yes, I know better than to believe everything I read from a recruiter but...) that may seem innocuous enough but it seems like one bank has a lot of problems. Reading between the lines, a job description tells you what the company lacks or is in need of, where their weaknesses are. I'm guessing the organisation is American and has a bunch of people with vested interest: bankers, Wealth Advisors, CSS (Client Service Specialist/Support?), Trust Officers, etc. but none of them are motivated or coordinated enough to work together so we need a liaison to bring them all together! Create silos, get silo mentality.
Now factor in that most trustees are not in your home country (say Jersey), their number crunchers and support team are in another geography (like Mumbai) and their services are being marketed to you by an associate in another department (banker or wealth advisor in Singapore) and not by them directly, you can expect problems. This is like a kitchen that is not in control of the menu or waiters. God knows how the waiters (bankers and wealth advisors) are pitching the food? God knows if the waiter can answer "what's in the soup?" if ever asked? Do waiters really care about what's in the soup or understand how it is prepared? Just smile, make chit chat, write up the order and give me my tip. Sometimes, the waiter goes back to the kitchen to ask the potager for the correct answer, hence the delay. Other times, the waiter makes it up or guesses.....and of course the chef pays for it when the customer is irate that his soup which was supposed to contain lobster was actually was fish. Waiters have also been known to make promises to patrons like, of course we have lobster bisque, only to find out the potager can't deliver.
If you bank or have a trust with them, you're probably a victim of the 50 emails around the world it takes to get an answer to anything (if you get one at all). If you work for them, then you're probably pissed at the lack of teamwork, you're going round and round.
This manager role sounds like a band-aid solution to a troubling, all-too-common structural problem. I guess it's a good start that they know they have a problem.
The JD should read more like: the successful candidate will require very thick skin and expect to be thrown into harm's way. This is the UN Peace Negotiator aspect of the job I refer to in: http://trustprofessioninasia.blogspot.com/2010/04/you-are-who-you-hire.html
So here goes:
1) To represent International Fiduciary Services locally as part of the integrated team - tells you they're not a team right now, to each his own.
2) on-the-ground presence and provide a local presence - tells you they're a thousand miles away
3) timely and quick resolution - tells you they're currently doing neither
4) work through complex fiduciary issues with wealth advisors and bankers - tells you the people they have on the ground aren't very good, especially the wealth advisor who is supposed to be an expert. Then again, the wealth advisor is just there to sell, it's not his job to worry about post-sales activities which is where most fiduciary issues come up just like the car salesmen is of little use when your Lamborghini breaks down, that's the mechanic's (in Italy) problem.
5) bridge information flow between Wealth Advisors and Trust Officers - tells you the two parties aren't accustomed or are refusing to talk to one another, why else need a bridge? Can't they pick up the phone or send off an email themselves?
Trust Liaison Manager – Hong Kong, Singapore
Our client, a top tier private bank is looking for a senior trust relationship manager to be a liaison manager for its international trust offices.
Suitable candidates will already be based in Hong Kong and Singapore
Responsibilities: To represent International Fiduciary Services locally as part of the integrated team and improve service levels of fiduciary through on-the-ground presence and timely resolution of issues:
- To provide a local presence for quick resolution and feedback of client issues
- To work through complex fiduciary issues with wealth advisors and bankers
- To work with the wealth advisor to represent fiduciary on new business
- To provide training and bridge information flow between Wealth Advisors and Trust Officers
The successful candidate will serve as a liaison between the bankers, wealth advisors, CSS and the Trust locations on a wide range of fiduciary issues and act as a technical resource to fiduciary officers, wealth advisors, bankers and other practice and/or functional partners on a broad range of fiduciary matters.
Requirements
- Seasoned client management skills
- 10 years + PQE fiduciary experience in an international environment including extensive client contact
- A professional qualification Law or STEP qualified
- Extensive knowledge of the marketplace as it pertains to fiduciary structures and client needs
- The ability to develop effective solutions in respect of administrative and other legal issues and to monitor these in a dynamic environment.
[Edit: It’s now June 2011 and the JP Morgan HR team is now in carpet-bombing mode trying to fill the role above (see below). After some 8-9 months, it appears they are still stuck on square 1 and even if they found someone today, it maybe another few months before they’re on the job. While JPM deal with Santiago’s curse (see http://trustprofessioninasia.blogspot.com/2010/11/on-85th-day.html) it raises an interesting question – how mission critical is it when your operation keeps chugging along without this person/function? I'm always tempted to point to managerial ineptitude when a position is not filled for any significant period but only JPM knows the whole story. When people don’t have an excuse or recourse, they tend to get the job done. Perhaps instead of a new role, observing how the various teams cope may be part of the ultimate solution. Necessity seems to have a way of solving problems.
Job Description
PB - International Fiduciary Services - Trust Client Services-110038423
Job Description
J.P. Morgan Private Bank Asia - International Fiduciary Services (IFS) - Trust Client Services
Objective
To represent IFS in Asia and improve responsiveness and service levels of IFS through on-the-ground presence and timely resolution of complex issues. Provide the technical expertise to educate and train Trust Officers on complex jurisdictional, tax, legal issues and ensure structures are in compliance with changes/updates:
• Provide a local presence in Asia for resolution and feedback of complex client issues
• Work through complex fiduciary issues with Wealth Advisors and bankers
• Coordinate with Wealth Advisory to represent fiduciary on new business opportunities
• Provide training and bridge information flow between WA and TOs
Principal Responsibilities
• New fiduciary business: Partner with Bankers, Wealth Advisors, Clients and their advisors, and Trust Officers to structure, assess and on-board new fiduciary business
o Participate with client, client's advisors, JPM colleagues to propose fiduciary solutions appropriate to client needs
o Represent IFS in this process by assessing potential fiduciary risk and suggesting appropriate risk mitigants
o Propose and negotiate fiduciary pricing
o Review and comment on draft documents
o Work with Trust Officers to on-board new fiduciary business
• Existing fiduciary business: Partner with Bankers, Trust Officers, Clients and their advisors to retain and deepen existing relationships
o Serve as technical resource to IFS to resolve specific client issues , restructuring exercises, or complex fiduciary administration issues
o Represent IFS locally by providing real-time answers and responses to questions about fiduciary administration
• Training: Lead the IFS training agenda to ensure technical skill set of Trust Officers remains current
o Develop and deliver regular training on specific issues relating to tax, regulatory, fiduciary administration topic
o Liaise between Wealth Advisory and IFS on specific, highly technical issues with respect to fiduciary structures and administration
o Participate in roll out of changes in policies/procedures; refinements to existing fiduciary products; introduction of new fiduciary products
Qualifications
• A minimum of 10 years fiduciary experience, including extensive client interaction, in an international environment
• In depth knowledge of trust law and legal/regulatory requirements affecting international fiduciary locations
• The ability to evaluate and propose effective structuring solutions
• The ability to access Fiduciary risk to make appropriate business decisions
• Experience with cross-border tax and planning issues
• Knowledge of investment and credit products and services
• Chinese Language skills preferable
Job
Private Banking
Primary Location
CN-Hong Kong-Hong Kong
Organization
Asset & Wealth Management
Schedule
Full-time
Job Type
Standard
Shift
Day Job
Employee Status
Regular
Here is an ad (yes, I know better than to believe everything I read from a recruiter but...) that may seem innocuous enough but it seems like one bank has a lot of problems. Reading between the lines, a job description tells you what the company lacks or is in need of, where their weaknesses are. I'm guessing the organisation is American and has a bunch of people with vested interest: bankers, Wealth Advisors, CSS (Client Service Specialist/Support?), Trust Officers, etc. but none of them are motivated or coordinated enough to work together so we need a liaison to bring them all together! Create silos, get silo mentality.
Now factor in that most trustees are not in your home country (say Jersey), their number crunchers and support team are in another geography (like Mumbai) and their services are being marketed to you by an associate in another department (banker or wealth advisor in Singapore) and not by them directly, you can expect problems. This is like a kitchen that is not in control of the menu or waiters. God knows how the waiters (bankers and wealth advisors) are pitching the food? God knows if the waiter can answer "what's in the soup?" if ever asked? Do waiters really care about what's in the soup or understand how it is prepared? Just smile, make chit chat, write up the order and give me my tip. Sometimes, the waiter goes back to the kitchen to ask the potager for the correct answer, hence the delay. Other times, the waiter makes it up or guesses.....and of course the chef pays for it when the customer is irate that his soup which was supposed to contain lobster was actually was fish. Waiters have also been known to make promises to patrons like, of course we have lobster bisque, only to find out the potager can't deliver.
If you bank or have a trust with them, you're probably a victim of the 50 emails around the world it takes to get an answer to anything (if you get one at all). If you work for them, then you're probably pissed at the lack of teamwork, you're going round and round.
This manager role sounds like a band-aid solution to a troubling, all-too-common structural problem. I guess it's a good start that they know they have a problem.
The JD should read more like: the successful candidate will require very thick skin and expect to be thrown into harm's way. This is the UN Peace Negotiator aspect of the job I refer to in: http://trustprofessioninasia.blogspot.com/2010/04/you-are-who-you-hire.html
So here goes:
1) To represent International Fiduciary Services locally as part of the integrated team - tells you they're not a team right now, to each his own.
2) on-the-ground presence and provide a local presence - tells you they're a thousand miles away
3) timely and quick resolution - tells you they're currently doing neither
4) work through complex fiduciary issues with wealth advisors and bankers - tells you the people they have on the ground aren't very good, especially the wealth advisor who is supposed to be an expert. Then again, the wealth advisor is just there to sell, it's not his job to worry about post-sales activities which is where most fiduciary issues come up just like the car salesmen is of little use when your Lamborghini breaks down, that's the mechanic's (in Italy) problem.
5) bridge information flow between Wealth Advisors and Trust Officers - tells you the two parties aren't accustomed or are refusing to talk to one another, why else need a bridge? Can't they pick up the phone or send off an email themselves?
Trust Liaison Manager – Hong Kong, Singapore
Our client, a top tier private bank is looking for a senior trust relationship manager to be a liaison manager for its international trust offices.
Suitable candidates will already be based in Hong Kong and Singapore
Responsibilities: To represent International Fiduciary Services locally as part of the integrated team and improve service levels of fiduciary through on-the-ground presence and timely resolution of issues:
- To provide a local presence for quick resolution and feedback of client issues
- To work through complex fiduciary issues with wealth advisors and bankers
- To work with the wealth advisor to represent fiduciary on new business
- To provide training and bridge information flow between Wealth Advisors and Trust Officers
The successful candidate will serve as a liaison between the bankers, wealth advisors, CSS and the Trust locations on a wide range of fiduciary issues and act as a technical resource to fiduciary officers, wealth advisors, bankers and other practice and/or functional partners on a broad range of fiduciary matters.
Requirements
- Seasoned client management skills
- 10 years + PQE fiduciary experience in an international environment including extensive client contact
- A professional qualification Law or STEP qualified
- Extensive knowledge of the marketplace as it pertains to fiduciary structures and client needs
- The ability to develop effective solutions in respect of administrative and other legal issues and to monitor these in a dynamic environment.
[Edit: It’s now June 2011 and the JP Morgan HR team is now in carpet-bombing mode trying to fill the role above (see below). After some 8-9 months, it appears they are still stuck on square 1 and even if they found someone today, it maybe another few months before they’re on the job. While JPM deal with Santiago’s curse (see http://trustprofessioninasia.blogspot.com/2010/11/on-85th-day.html) it raises an interesting question – how mission critical is it when your operation keeps chugging along without this person/function? I'm always tempted to point to managerial ineptitude when a position is not filled for any significant period but only JPM knows the whole story. When people don’t have an excuse or recourse, they tend to get the job done. Perhaps instead of a new role, observing how the various teams cope may be part of the ultimate solution. Necessity seems to have a way of solving problems.
Job Description
PB - International Fiduciary Services - Trust Client Services-110038423
Job Description
J.P. Morgan Private Bank Asia - International Fiduciary Services (IFS) - Trust Client Services
Objective
To represent IFS in Asia and improve responsiveness and service levels of IFS through on-the-ground presence and timely resolution of complex issues. Provide the technical expertise to educate and train Trust Officers on complex jurisdictional, tax, legal issues and ensure structures are in compliance with changes/updates:
• Provide a local presence in Asia for resolution and feedback of complex client issues
• Work through complex fiduciary issues with Wealth Advisors and bankers
• Coordinate with Wealth Advisory to represent fiduciary on new business opportunities
• Provide training and bridge information flow between WA and TOs
Principal Responsibilities
• New fiduciary business: Partner with Bankers, Wealth Advisors, Clients and their advisors, and Trust Officers to structure, assess and on-board new fiduciary business
o Participate with client, client's advisors, JPM colleagues to propose fiduciary solutions appropriate to client needs
o Represent IFS in this process by assessing potential fiduciary risk and suggesting appropriate risk mitigants
o Propose and negotiate fiduciary pricing
o Review and comment on draft documents
o Work with Trust Officers to on-board new fiduciary business
• Existing fiduciary business: Partner with Bankers, Trust Officers, Clients and their advisors to retain and deepen existing relationships
o Serve as technical resource to IFS to resolve specific client issues , restructuring exercises, or complex fiduciary administration issues
o Represent IFS locally by providing real-time answers and responses to questions about fiduciary administration
• Training: Lead the IFS training agenda to ensure technical skill set of Trust Officers remains current
o Develop and deliver regular training on specific issues relating to tax, regulatory, fiduciary administration topic
o Liaise between Wealth Advisory and IFS on specific, highly technical issues with respect to fiduciary structures and administration
o Participate in roll out of changes in policies/procedures; refinements to existing fiduciary products; introduction of new fiduciary products
Qualifications
• A minimum of 10 years fiduciary experience, including extensive client interaction, in an international environment
• In depth knowledge of trust law and legal/regulatory requirements affecting international fiduciary locations
• The ability to evaluate and propose effective structuring solutions
• The ability to access Fiduciary risk to make appropriate business decisions
• Experience with cross-border tax and planning issues
• Knowledge of investment and credit products and services
• Chinese Language skills preferable
Job
Private Banking
Primary Location
CN-Hong Kong-Hong Kong
Organization
Asset & Wealth Management
Schedule
Full-time
Job Type
Standard
Shift
Day Job
Employee Status
Regular
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