A very nice read from the good folks at UBS and Insead Business school: http://www.ubs.com/1/ShowMedia/wealthmanagement/philanthropy_valuesbased_investments?contentId=194353&name=Insead_Report.pdf
"Today the private wealth industry in Asia-Pacific offers
philanthropy advisory and investment services to their clients.
There have been a number of big firms leading in this space
for a number of years and the result of that has been a more
professional engagement by HNWIs resulting in strategic
investments to developing world non-profits. In partnership
with philanthropy and development experts empanelled with
them (or staff recruited from the development sector), banks
and wealth management firms today provide professional
advice to clients resulting in sound grant making, establishing
philanthropy infrastructure (trusts and foundations) and educational
programs/peer learning opportunities that help them
share and learn about philanthropic initiatives and practices."
Tuesday, August 23, 2011
Sunday, August 7, 2011
Mumble Jumbo in Taiwan
Most trust people in Asia are so entrenched in the life insurance business that we sometimes feel like we're insurance people more than trust people. Why is that?
Insurance is an important tool of wealth (and sometimes tax and estate) planning. The benefits of insurance for the client are well known. But do you know why we trust companies like them too? The liquidity from the retrocessions we get from the insurance companies and brokers makes all "wealth management" bosses very happy. The low risk and the revenue stream from life insurance products makes it a priority product for many of the trust companies. According to a confidential informant....one banking group trustee sells 10 times more insurance and/or insurance stand-by trusts than normal trusts. Strange isn't it? People are ready to pay up to and over 500bps on insurance but not remotely the same for a trust. Ever see a customer hangle over premiums? How do you think insurance groups like AIA got so "big to fail"?
Well the bubble is bursting, at least in Taiwan. http://www.iflr.com/Article/2863215/Home/Canges-to-insurance-law.html "....to deter unapproved offshore insurance policies by raising the punishment from administrative fines of between NT$900,000 ($31,200) and NT$4.5 million to imprisonment of up to 3 years or criminal fines between NT$3 million and NT$20 million, or both" Ouch!
While the offshore and onshore sales of unregulated products to onshore markets (essentially the illegal "cross-border" business) is what all parties of the game are good at, heck we've been doing for the last 40 years....the stakes are getting higher. If Taiwan actually is able to enforce a case or two then it becomes a bark with a bite and not just a bark.
So before you go back to Taipei with those no-name term sheets and generic product features and your James Bond kits think about how easy it is for your client to turn you in should he or she ever chose to. Just send them tickets and book them into your local 5-star hotel. Come on, you can afford it, remember the 3-yr trailer you get.
Insurance is an important tool of wealth (and sometimes tax and estate) planning. The benefits of insurance for the client are well known. But do you know why we trust companies like them too? The liquidity from the retrocessions we get from the insurance companies and brokers makes all "wealth management" bosses very happy. The low risk and the revenue stream from life insurance products makes it a priority product for many of the trust companies. According to a confidential informant....one banking group trustee sells 10 times more insurance and/or insurance stand-by trusts than normal trusts. Strange isn't it? People are ready to pay up to and over 500bps on insurance but not remotely the same for a trust. Ever see a customer hangle over premiums? How do you think insurance groups like AIA got so "big to fail"?
Well the bubble is bursting, at least in Taiwan. http://www.iflr.com/Article/2863215/Home/Canges-to-insurance-law.html "....to deter unapproved offshore insurance policies by raising the punishment from administrative fines of between NT$900,000 ($31,200) and NT$4.5 million to imprisonment of up to 3 years or criminal fines between NT$3 million and NT$20 million, or both" Ouch!
While the offshore and onshore sales of unregulated products to onshore markets (essentially the illegal "cross-border" business) is what all parties of the game are good at, heck we've been doing for the last 40 years....the stakes are getting higher. If Taiwan actually is able to enforce a case or two then it becomes a bark with a bite and not just a bark.
So before you go back to Taipei with those no-name term sheets and generic product features and your James Bond kits think about how easy it is for your client to turn you in should he or she ever chose to. Just send them tickets and book them into your local 5-star hotel. Come on, you can afford it, remember the 3-yr trailer you get.
Tuesday, July 26, 2011
Covet Thy Comrade's Assets
The trust industry is often broken into 2 major sectors: private and corporate. Private deals with mainly individuals and families, charities, etc.. Corporate is largely business oriented: REITs, securitization, custody, pensions, etc. While there are some blurring of lines, typically an organisation will operate them as 2 distinct businesses with their own staff and systems.
Regardless of which side of the family you are from, this headline should perk up your interests: "China’s trust sector amasses Rmb3.7 trillion in assets" http://www.asianinvestor.net/News/264714,china8217s-trust-sector-amasses-rmb37-trillion-in-assets.aspx
Now before you all jump for joy, PRC trust companies are not your typical western corporate trust company. Therefore, it is not a simple as setting up a Joint-Venture or getting a license and off-you-go. However, we all have the infrastructure and 70% of the know-how to capture a piece of that pie. If your strategy people aren't already working on a way for you to tap into this market, then fire them as well as the people who hired them.
The PRC trust business offers another route to get to the HNWI market as well as a place to park money and investments outside of the traditional banking system. And sooner-or-later, your existing clients will be asking you to park your trust funds into these PRC trust company offerings so you better understand the system.
Regardless of which side of the family you are from, this headline should perk up your interests: "China’s trust sector amasses Rmb3.7 trillion in assets" http://www.asianinvestor.net/News/264714,china8217s-trust-sector-amasses-rmb37-trillion-in-assets.aspx
Now before you all jump for joy, PRC trust companies are not your typical western corporate trust company. Therefore, it is not a simple as setting up a Joint-Venture or getting a license and off-you-go. However, we all have the infrastructure and 70% of the know-how to capture a piece of that pie. If your strategy people aren't already working on a way for you to tap into this market, then fire them as well as the people who hired them.
The PRC trust business offers another route to get to the HNWI market as well as a place to park money and investments outside of the traditional banking system. And sooner-or-later, your existing clients will be asking you to park your trust funds into these PRC trust company offerings so you better understand the system.
Sunday, July 24, 2011
The Sidekick
Not Asian news but trust related. A comrade is in trouble. Josef Dörig was part of the Credit Suisse Group at one time. He was founder of Dörig Partner AG, a Zurich trust company and serves on the board of a couple of Swiss companies so he's not a total nobody. The company website is now conveniently offline. Try Moneyhouse.
Apparently Josef's relationship with CS was intimate enough for him to be indicted in connection to the CS-US tax evasion war. CS already has about 6 or 7 staff under indictment so that is likely to end up where the UBS-US tax war ended. Book that provision now.
So another stark reminder for all you independents, being a "preferred provider" of trust and related services to the banks is not all that it is cracked up to be. Just like the old movie/book cliché, these days, the sidekick can and will be killed. You spend precious time and resources buddying up to the banks, only to get the "high risk" stuff they can't or won't do in-house. The old joke for bank trustees has been: "you send the shit out-house". You get peanuts in comparison to their fees. Perhaps time to re-think the business model?
Apparently Josef's relationship with CS was intimate enough for him to be indicted in connection to the CS-US tax evasion war. CS already has about 6 or 7 staff under indictment so that is likely to end up where the UBS-US tax war ended. Book that provision now.
So another stark reminder for all you independents, being a "preferred provider" of trust and related services to the banks is not all that it is cracked up to be. Just like the old movie/book cliché, these days, the sidekick can and will be killed. You spend precious time and resources buddying up to the banks, only to get the "high risk" stuff they can't or won't do in-house. The old joke for bank trustees has been: "you send the shit out-house". You get peanuts in comparison to their fees. Perhaps time to re-think the business model?
Monday, June 27, 2011
Wire-to-Wire
Just came over the wire (probably fiber optic now but...) India and Singapore have revised their double tax treaty:
http://www.thehindu.com/business/Economy/article2132285.ece
The Protocol to be ratified (hence not effective today): http://www.iras.gov.sg/pv_obj_cache/pv_obj_id_FFCB86402606AD1BB409F254BEDF0EBCE7D40000/filename/Protocol%20amending%20Singapore-India%20DTA%20(Not%20in%20force)(24%20June%202011).pdf
This Protocol replaces Article 28 on Exchange of Information of the existing DTAA with the current OECD-model wording (paragraphs 4 & 5 to be more exact). Read carefully: “In no case shall the provisions of paragraph 3 be construed to permit a Contracting State to decline to supply information solely because the information is held by a bank, other financial institution, nominee or person acting in an agency or a fiduciary capacity or because it relates to ownership interests in a person.”
When researching this, I used the Google search engine. Now I noticed something unusual about the search results. Great Googly-Moogly, virtually all the hits were from India or Indian news/business websites. You would be hard pressed to find this news on Singapore news feeds. Hmmmmmm
Do you own search. Draw your own conclusions.
Sorry gotta run, many wire transfer forms to fill out.
http://www.thehindu.com/business/Economy/article2132285.ece
The Protocol to be ratified (hence not effective today): http://www.iras.gov.sg/pv_obj_cache/pv_obj_id_FFCB86402606AD1BB409F254BEDF0EBCE7D40000/filename/Protocol%20amending%20Singapore-India%20DTA%20(Not%20in%20force)(24%20June%202011).pdf
This Protocol replaces Article 28 on Exchange of Information of the existing DTAA with the current OECD-model wording (paragraphs 4 & 5 to be more exact). Read carefully: “In no case shall the provisions of paragraph 3 be construed to permit a Contracting State to decline to supply information solely because the information is held by a bank, other financial institution, nominee or person acting in an agency or a fiduciary capacity or because it relates to ownership interests in a person.”
When researching this, I used the Google search engine. Now I noticed something unusual about the search results. Great Googly-Moogly, virtually all the hits were from India or Indian news/business websites. You would be hard pressed to find this news on Singapore news feeds. Hmmmmmm
Do you own search. Draw your own conclusions.
Sorry gotta run, many wire transfer forms to fill out.
Monday, June 13, 2011
EX-rated Stuff
For us trustees, we like exculpatory clauses as much as anyone else and God knows we need them, here is an interesting "real" world application. It's not trust-related but I'm sure we'll all be thinking of what this judgment may mean to the way we do business.
For all you bank in-house counsels out there, this is a must read – time to secure your job for the next 12-months by doing a comprehensive review of account opening documentation and procedures.
For all you that book business into banks (like us trustees), this is also a must read – who knows, you may qualify to get back some of those trading losses or “exorbitant fees” yourself. Hire a bank account statement reader ASAP!
For you bank OPs guys, here comes another nightmare project.
Steven Chong, nice one!
EFG, back to the drawing board. In hindsight, they should have paid the measly restitution, got a gag and avoided looking "unconscionable" among other things.
Tony? Well’s he’s teaching at Nanyang Poly I understand
MAS? Hello? You there?
Jiang Ou v EFG Bank AG [2011] SGHC 149
http://www.singaporelawwatch.sg/remweb/legal/ln2/rss/judgment/12554.html?utm_source=web%20subscription&utm_medium=web&title=Jiang%20Ou%20v%20EFG%20Bank%20AG %5B2011%5D%20SGHC%20149
At the heart of the matter were some 160 transactions EFG did on the non-discretionary account of a customer. EFG practised their “craft” and managed to successfully lose some US$2.4M of the customer’s money (some 45% of the total value) as well earn some US$1M in transactional fees. Turns out the transactions weren’t authorised, therefore EFG tried to rely on shifting the burden to the customer, under those nasty "conclusive evidence" provisions that say if you didn’t object to your bank statements and do so in a timely manner then all’s well and you can’t sue us, nah-na-na-nah.
For all you bank in-house counsels out there, this is a must read – time to secure your job for the next 12-months by doing a comprehensive review of account opening documentation and procedures.
For all you that book business into banks (like us trustees), this is also a must read – who knows, you may qualify to get back some of those trading losses or “exorbitant fees” yourself. Hire a bank account statement reader ASAP!
For you bank OPs guys, here comes another nightmare project.
Steven Chong, nice one!
EFG, back to the drawing board. In hindsight, they should have paid the measly restitution, got a gag and avoided looking "unconscionable" among other things.
Tony? Well’s he’s teaching at Nanyang Poly I understand
MAS? Hello? You there?
Jiang Ou v EFG Bank AG [2011] SGHC 149
http://www.singaporelawwatch.sg/remweb/legal/ln2/rss/judgment/12554.html?utm_source=web%20subscription&utm_medium=web&title=Jiang%20Ou%20v%20EFG%20Bank%20AG %5B2011%5D%20SGHC%20149
At the heart of the matter were some 160 transactions EFG did on the non-discretionary account of a customer. EFG practised their “craft” and managed to successfully lose some US$2.4M of the customer’s money (some 45% of the total value) as well earn some US$1M in transactional fees. Turns out the transactions weren’t authorised, therefore EFG tried to rely on shifting the burden to the customer, under those nasty "conclusive evidence" provisions that say if you didn’t object to your bank statements and do so in a timely manner then all’s well and you can’t sue us, nah-na-na-nah.
Sunday, June 5, 2011
Welcome to The Jungle
Collas Crill (who?) - a small 15-partner Guernsey law firm is about to open an office in Singapore. (yawn!) http://www.law.com/jsp/tal/PubArticleAL.jsp?id=1202495434828&Channel_Islands_Firm_to_Launch_in_Singapore&slreturn=1&hbxlogin=1
Now I would think with the opening of the listing rules for Guernsey companies on the HK Stock Exchange would mean more legal work in HK than Singapore but what do I know?
The point I picked up on is that CC partnership owns a Guernsey trust company, aptly named "Guernsey Trust Company"! Now you know where (else) to go to should you need a Guernsey trust.
The Channel Islands have never been a top trust destination for Asian clients. When given a choice, virtually no one wants a CI administered trust. The only people that promote Guernsey or Jersey trusts are the banks that have a trust center there. With the exodus of trust companies/business from the CI, it seems no one else is either.
Now I would think with the opening of the listing rules for Guernsey companies on the HK Stock Exchange would mean more legal work in HK than Singapore but what do I know?
The point I picked up on is that CC partnership owns a Guernsey trust company, aptly named "Guernsey Trust Company"! Now you know where (else) to go to should you need a Guernsey trust.
The Channel Islands have never been a top trust destination for Asian clients. When given a choice, virtually no one wants a CI administered trust. The only people that promote Guernsey or Jersey trusts are the banks that have a trust center there. With the exodus of trust companies/business from the CI, it seems no one else is either.
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