Here is a sample of the most recent media articles that are quoting our latest report “Mobile Apps for Financial Advisors and Wealth Managers 2013“:
Wealth Briefing (log-in required)
Mobile Business (German edition)
CIO (German edition)
In our last post we have asked ‘Where is Gaddafis’s money?’. Over the last few days governments around the world have started freezing his assets. You get some background here, here and here. It seems that governments are working more or less in concert on this issue. Yet it also seem that the Colonel from Libya has taken some precautions just before the violence started.
It remains to be seen what happens to Gaddafis’s assets when the war drags on or when he is able to overwhelm his opponents in Libya.
Of course at this stage the amount of money Gaddafi and his criminal gang of friends and family have stolen from Libya is speculative, as well as the countries, banks and companies where it is hidden. However, the hunt for the money begun. Switzerland and the UK frezzed his assets, respectively at least the share the know about and have access to.
Todays RT´s article “Defaulting on dictators: hunt for Gaddafi’s loot begins” draws on various credible sources to describe the stage of the hunt for Gaddafis money and where it is hidden. In total the wealth of the clan is estimated to go up to USD 80! billion, the majority squirreled away in Libya itself. The liquid assets alone are estimated at about USD 20 billion. No bad for a revolutionary leader. Not surprisingly Switzerland and the United Kingdom are prime candidates as places where the money is stashed away. Certainly news of other Gaddafi investments and financial havens will continue to pop up.
Let´s hope this freak and his screwed-up family is gone soon, that a lot of money will get back to the people in Libya (and will put to good use) and that not only politicians, but also banks and wealth managers will learn their lessons on the risks of dealing with dictators. (See our research brief “What the Arab Revolution means for Wealth Managers“)
Our new research brief What the Arab Revolution means for Private Banks and Wealth Managers has been published. So far we had a very friendly reception for this paper in the media around the world, including even a Nigerian newspaper. Here is a selection: Bloomberg, Wealth Briefing, Nigerian Compass, Banking Business Review.
German wealth managers are now openly promoting the country as tax haven for Swiss residents: The website of this German wealth manager basically says:
“Tax Oasis Germany: The German finance minister wants to stop tax havens worldwide. But he has overlooked one - Germany. Because Germany offers non-residents tax advantages - especially Swiss residents….”
Now, shouldn’t the OECD jump on this case and call for an emergency meeting of the G20?
It seems that over at Credit Suisse they are panicking about the tax probes lead by the Germans and other European governments against offshore clients and also bank advisers. We have been contacted by former Credit Suisse clients, some of them long standing clients, who have been rudely kicked out as clients. We have credible information that even clients who legalized their holdings in Switzerland have seen their accounts canceled. Only few weeks ago Credit Suisse sent a letter to foreign clients with less than 1 Mio. Euro that they have to pay additional fees if they want to keep an account in Switzerland. MyPrivateBanking has copies of this letter. We will follow up with this story next week and hope to get some comments from the CS management.
After some dispute within the German federal government on the legality the German state Lower-Saxony finally bought another CD containing data from about 20.000 German holders of Swiss bank account. This time supposley Euro 185.000 were paid to an unidentified seller.
The new business model for private bank employees is still intact and banks and clients may like it or not: Offshore-banking has no future. Pressured by “data leaks”, tougher regulations for tax havens and stricter law enforcement at home less and less clients will take the risk of bringing untaxed money across borders. Banks with a lot of offshore-clients better adopt their strategy now!
Liechtenstein had net money outflow of CHF 7 bn (USD 6.5 bn) in the year 2009 (source in German). However, overall assets under management increased by 17% to USD 250 bn. The negative net new money is most likely a consequence of the actions against offshore tax shelters taken by EU countries and the US. Liechtenstein’s pro-active policy to work with EU governments and the US authorities on the revision of double taxation agreements is probably one factor that money outflows could be contained to less than 3% of total assets. MyPrivateBanking has found that the outflow of money from Switzerland has probably been more severe in 2009.
Just want to quickly post a link to the Swiss (German speaking) daily NZZ which today had an excellent analysis on the new Fatca act that was just signed by Obama. This law requires that foreign banks and other financial instiutions disclose all US account holders to the US tax authorities. The provisions include a 30 percent withholding tax on U.S. source payments to foreign financial institutions, foreign trusts, and foreign corporations that do not agree to disclose their U.S. account holders and owners to the IRS. We will follow up early next week with more analysis on our main site as this is a major and impotant development.
A few months ago we have made an analysis of data from the Swiss National Bank. It showed that between January 2008 and August 2009 foreign private assets in Switzerland had declined by 25.9% (whereas domestic private assets declined by only 13.8%). Three months later we have gone back and looked at the latest data, covering the period until November 2009. The data have not improved - on the contrary. Whereas the domestic assets have been stable (decline since beginning of 2008 at 13.9%, just 0.1% worse than in August), the private foreign assets are now down by 28.1% since Jan. 2008, a further decline of 2.2 percentage points. This equals a net decline of more than SFR 20 bn between August and November 2009. In addition, there might be quite a bit of foreign private wealth invested in instituional vehicles like trusts which is not even tracked in this statistic.
Potentially, there could be other reasons for this decline than net money outflow across the border. Yet, it is hard to explain why foreign assets are persistently declining while domestic assets stay relative stable.
Today there is also a analysis on Wealth Bulletin which confirms our data. Wealth Bulletin finds the same trends across many offshore destinations in Europe.
We find that this trend is quite frightening from the point of view of Swiss competitiveness. As we said before, it is the eleventh hour for a change of strategy.