Take a look at the survey raised by STEP to its Asian members. Members were asked to choose to a degree how much agreed or disagreed (or neutral) to the statements below - typical five-level Likert item. The results will supposedly be turned into a report so people who make big decisions can make well, big decisions.
So let's rig the results, shall we? After all, we all want to keep our jobs and ensure the money faucet doesn't turn off right?
1. Which branch of STEP are you currently a member of?
2. Hong Kong and Singapore will continue to take divergent paths in wealth planning
3. Regulatory initiatives to increase tax compliance in Asia will increase
4. The regulatory regimes of Hong Kong and Singapore will converge
5. China is several decades away from making an impact on the wealth planning industry
6. Tax is not the major driver of demand for trust structures in Asia
7. Clients' awareness of the need for tax compliance is growing
8. Asian clients will remain unique in seeking very strong control over their assets
9. Asian clients will remain very sensitive to fees
10. Banks will continue to have major competitive advantages in Asian wealth planning
11. The lack of fiduciary and legal talent is a major constraint on the future growth of the industry
12. The perception of Asia as a low cost financial centre is inaccurate
13. New wealth planning business in Asia will continue to be private banker driven
14. Banks will continue to be the primary providers of investment services
15. Independent asset management boutiques will increase their share of the investment services market
16. Both Hong Kong and Singapore will remain primarily offshore focussed in wealth planning
17. Singapore will be the dominant centre for Private Client Trust Services in Asia
18. Private wealth management in Hong Kong will remain focussed on corporate structures
19. Trusts in Asia will continue to be used primarily for asset protection purposes
20. The widespread use of private trust companies is consistent with a health wealth planning industry
Wednesday, September 28, 2011
Sunday, September 4, 2011
I Read The News Today….Oh Boy
What to make of all the news these days?
You can’t run, but you can continue to hide. Germany and Switzerland sign a tax deal whereby German tax cheats who stashed undeclared money away in Swiss banks can pay a one-time fine of some 19-34% on the assets hidden and keep their identity a secret for an ongoing 26% withholding fee. Hmmmm, did anyone bother to read the EUSD beforehand? The deal cost the Swiss banks some $2B CHF but now they’ve got happy anonymous customers again. Probably take them 3 years to recoup, less if the markets rebound. I think they've also agreed not to buy CDs anymore: http://trustprofessioninasia.blogspot.com/2011/04/new-performance-benchmarks-for-roi-on.html
http://www.sif.admin.ch/00488/index.html?lang=en&msg-id=40533
The UK made a similar deal a few days later. But they only get $500M CHF lump sum from the banks but a slightly higher entry fee of 27-48% with the same 19-34% annual charge from the dodgy Brits. And for all those working in banks, please note that: “The United Kingdom further states that the criminal prosecution of bank employees due to participation in tax offences is highly unlikely.” In other words, carry on lads.
http://www.sif.admin.ch/00488/index.html?lang=en&msg-id=40731
Vive la différence, France, declined to enter such a deal preferring to tackle tax evasion the old way, whereas the others “not only respects the protection of bank clients' privacy, but also ensures the implementation of legitimate tax claims”. Of course who knows what the hell the new French Wealth taxes, including a nice section on trusts (trusts in France?!), will ultimately look like? Time to kick out the French clients I guess.
Of course, just blacklist the Swiss like the Italians did.
For the adventurous, some will tell you that Singapore should be a destination for your black money. http://www.accountancyage.com/aa/news/2106406/swiss-banks-help-clients-singapore
Nothing new, been happening for years. Of course if anyone has ever bother to read Annex A [http://iras.gov.sg/pv_obj_cache/pv_obj_id_633E3BEAD35D7E54B6C4AACEDF6BD0869B6E0300/filename/Protocol%20amending%20Singapore-United%20Kingdom%20DTA%20(Ratified)(9Dec10).pdf ], of the Agreement between UK and Singapore, you’ll have noted that it is the “new” standards so I’m not sure why author Jaimie Kaffesh says: “ Singapore, which has a secretive banking system, with no information sharing agreements with western states”. Must be a Yank.
[Update: on the 6th of Sept, the Monetary Authority of Singapore (MAS) decided to make a statement and reminded the banks to be more "alert" to agreements between countries to resolve tax issues.
This is because such agreements between countries may create increased risk of illicit fund flows, said MAS.
The central bank, which issued guidelines to all financial institutions here to safeguard the integrity of the financial system, also wants them to undertake a more critical review of any asset transfers into Singapore from such countries.
In its guidelines for financial institutions to safeguard the integrity of Singapore's financial system published Tuesday**, the MAS said: "Financial institutions should carefully evaluate the risks and establish the bona fides of customers before accepting such assets. If they have reason to suspect that the assets are illegitimate, they should file Suspicious Transaction Reports and where appropriate, discontinue the business relationship."
Since the customer is already a customer of my financial institution's Swiss branch, there's no way they would have illegitimate assets or not be bona fides right? In other words, no problem here, "double confirm la".
http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1151436/1/.html
**http://www.mas.gov.sg/legislation_guidelines/banks/guidelines/Guidelines_for_FIs_to_Safeguard_the_Integrity_of_Singapore_Financial_System.html ]
Speaking of the Yanks, FATCA!! (turning out to be a nasty 5-letter word). Another year to for all sides to figure out what the hell is this? How the hell are we to implement this? How the hell are we to enforce this? Perhaps this was more about job creation/retention rather than taxes.
I guess Credit Suisse will have a nice US $1B provision in the books for its alleged sins against the US: http://www.ifcreview.com/viewnews.aspx?articleId=3352
https://www.credit-suisse.com/news/en/media_release.jsp?ns=41815
Well there are about to be some 10,000 financial/banking job cuts around the world but Asia seems to buck the trend. UBS’ Asia CEO Kathryn Shih says it hired some 300 people in the past 2 months alone, whereas Credit Suisse says it let go some 20% of its WM business in India (ok that 20% equates to like 12 out 60 people). Weird isn’t that they’re not expanding headcount by 4000trillion percent in the same country touted to be the next economic engine of the world. Geez, won’t they be undermanned to handle the doubling of HNWIs that will happen by 2015 per a report by Julius Baer?
And a warm welcome to Singapore for Hilary May. Who? A transfer (or refugee? So hard to tell this days) from Jersey to head up RBC trust proposition in Asia it seems. Transnational trusts eh? http://www.rbcwminternational.com/pdf/newsletter/RBC-appointments.pdf
Unfortunately, this is not the Not the Nine O'Clock News.
You can’t run, but you can continue to hide. Germany and Switzerland sign a tax deal whereby German tax cheats who stashed undeclared money away in Swiss banks can pay a one-time fine of some 19-34% on the assets hidden and keep their identity a secret for an ongoing 26% withholding fee. Hmmmm, did anyone bother to read the EUSD beforehand? The deal cost the Swiss banks some $2B CHF but now they’ve got happy anonymous customers again. Probably take them 3 years to recoup, less if the markets rebound. I think they've also agreed not to buy CDs anymore: http://trustprofessioninasia.blogspot.com/2011/04/new-performance-benchmarks-for-roi-on.html
http://www.sif.admin.ch/00488/index.html?lang=en&msg-id=40533
The UK made a similar deal a few days later. But they only get $500M CHF lump sum from the banks but a slightly higher entry fee of 27-48% with the same 19-34% annual charge from the dodgy Brits. And for all those working in banks, please note that: “The United Kingdom further states that the criminal prosecution of bank employees due to participation in tax offences is highly unlikely.” In other words, carry on lads.
http://www.sif.admin.ch/00488/index.html?lang=en&msg-id=40731
Vive la différence, France, declined to enter such a deal preferring to tackle tax evasion the old way, whereas the others “not only respects the protection of bank clients' privacy, but also ensures the implementation of legitimate tax claims”. Of course who knows what the hell the new French Wealth taxes, including a nice section on trusts (trusts in France?!), will ultimately look like? Time to kick out the French clients I guess.
Of course, just blacklist the Swiss like the Italians did.
For the adventurous, some will tell you that Singapore should be a destination for your black money. http://www.accountancyage.com/aa/news/2106406/swiss-banks-help-clients-singapore
Nothing new, been happening for years. Of course if anyone has ever bother to read Annex A [http://iras.gov.sg/pv_obj_cache/pv_obj_id_633E3BEAD35D7E54B6C4AACEDF6BD0869B6E0300/filename/Protocol%20amending%20Singapore-United%20Kingdom%20DTA%20(Ratified)(9Dec10).pdf ], of the Agreement between UK and Singapore, you’ll have noted that it is the “new” standards so I’m not sure why author Jaimie Kaffesh says: “ Singapore, which has a secretive banking system, with no information sharing agreements with western states”. Must be a Yank.
[Update: on the 6th of Sept, the Monetary Authority of Singapore (MAS) decided to make a statement and reminded the banks to be more "alert" to agreements between countries to resolve tax issues.
This is because such agreements between countries may create increased risk of illicit fund flows, said MAS.
The central bank, which issued guidelines to all financial institutions here to safeguard the integrity of the financial system, also wants them to undertake a more critical review of any asset transfers into Singapore from such countries.
In its guidelines for financial institutions to safeguard the integrity of Singapore's financial system published Tuesday**, the MAS said: "Financial institutions should carefully evaluate the risks and establish the bona fides of customers before accepting such assets. If they have reason to suspect that the assets are illegitimate, they should file Suspicious Transaction Reports and where appropriate, discontinue the business relationship."
Since the customer is already a customer of my financial institution's Swiss branch, there's no way they would have illegitimate assets or not be bona fides right? In other words, no problem here, "double confirm la".
http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1151436/1/.html
**http://www.mas.gov.sg/legislation_guidelines/banks/guidelines/Guidelines_for_FIs_to_Safeguard_the_Integrity_of_Singapore_Financial_System.html ]
Speaking of the Yanks, FATCA!! (turning out to be a nasty 5-letter word). Another year to for all sides to figure out what the hell is this? How the hell are we to implement this? How the hell are we to enforce this? Perhaps this was more about job creation/retention rather than taxes.
I guess Credit Suisse will have a nice US $1B provision in the books for its alleged sins against the US: http://www.ifcreview.com/viewnews.aspx?articleId=3352
https://www.credit-suisse.com/news/en/media_release.jsp?ns=41815
Well there are about to be some 10,000 financial/banking job cuts around the world but Asia seems to buck the trend. UBS’ Asia CEO Kathryn Shih says it hired some 300 people in the past 2 months alone, whereas Credit Suisse says it let go some 20% of its WM business in India (ok that 20% equates to like 12 out 60 people). Weird isn’t that they’re not expanding headcount by 4000trillion percent in the same country touted to be the next economic engine of the world. Geez, won’t they be undermanned to handle the doubling of HNWIs that will happen by 2015 per a report by Julius Baer?
And a warm welcome to Singapore for Hilary May. Who? A transfer (or refugee? So hard to tell this days) from Jersey to head up RBC trust proposition in Asia it seems. Transnational trusts eh? http://www.rbcwminternational.com/pdf/newsletter/RBC-appointments.pdf
Unfortunately, this is not the Not the Nine O'Clock News.
Tuesday, August 23, 2011
Give A Little Bit
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."
"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."
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.
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