Singapore and Hong Kong have been fighting with each other for a while around tax rates, to great benefit of citizens, corporations and investors alike. Crossinvest as a wealth management company in Singapore can only hope that this competition will keep on going for a long time, as it provides benefits to our company, our employees and the clients alike. It’s good to remember that no tax on capital gains, bond coupons and dividends is a great help to carry out a successful discretionary investment mandate and at the end a satisfactory wealth management plan overall.

Meanwhile, it is amazing to see that while the bankrupt European countries try to fight offshore centres to collect more tax revenue, other countries play the opposite game and are able not only to retain the wealth generated domestically but also to attract capital from all over the world. At the end is just the Laffer Curve at play. Actually it doesn’t take a genius: an increase in the tax rate over a certain threshold decreases the tax revenue as it creates a strong incentive for taxpayers to try to restructure their fiscal profile and keep incomes and assets elsewhere. The high tax rate also discourages workers: it is very common to hear people in Europe sarcastically complaining that they work 6 months a year to pay for the government incompetence.

The following article from the Wealth Bulletin depicts the most recent action by the Singapore government to stay on top of the competitive game and enhance even more the wealth management landscape.

 

Singapore has boosted its effort to attract wealth managers, hedge funds and private equity funds to the country with a new tax incentive, as a US justice department suit against UBS raises questions over Swiss private bank’s ability to protect their clients’ details.

Under the new regulations, funds with assets under management of S$50m (€25.8m) will benefit from a new enhanced tax tier.

Sharon Hartlin, a partner at law firm White & Case in Hong Kong, said: “This is going to make Singapore even more attractive to funds and fund managers. People will look hard at Singapore as an option when the markets come back as there is now a menu of tax and regulatory reasons to invest in Singapore.”

Under current conditions, Singapore residents are inadvertently discouraged from having their funds managed from Singapore due to limits on their investment in the fund, according to White & Case. Under the new rules, these restrictions will be lifted, making limited partnerships in particular more appealing.

The enhanced tier will be open to vehicles in the form of companies, trusts and limited partnerships, and there will be no restrictions on the residency status of the fund vehicles or the investors. The incentive will open to applicants from April 1 2009 through to March 31 2014, though funds which are part of the scheme before the cut off date will be able to continue to enjoy the benefits of the scheme post-2014 provided they meet the schemes conditions.

Linda Ng, a counsel at White & Case in Hong Kong, added: “The immediate beneficiaries of this enhanced incentive are Singapore-resident non-individual [including corporate] investors. Singapore has a range of tax incentives intended to attract off shore and on shore funds.

“As well as tax exemptions for investment funds, Singapore has a 10% concessionary tax rate for approved fund managers, with that rate falling to 5% for sharia-compliant activities.”

The move by the Singapore government arrives as the wealth management industry in Switzerland, considered as the primary private banking venue, faces an uncertain future. The US Justice Department today sued UBS to gain access to 52,000 accounts belonging to US clients following a separate tax-evasion probe, raising questions over the ability of Swiss private banks to offer protection to clients.

Again, with Switzerland working overtime to get in a weaker-than-ever position in respect to the broke European countries, no wonders that money is flowing to Singapore. We expect the wealth management indutry to develop quite fast even in the current market conditions becasuse of the urge to find a safe place for the ultra rich’s savings.

From Property Report Asia:

 

Forget Swiss bank accounts, having an offshore Singapore bank account is now the rage amongst the super rich.

If you noticed more Lamborghinis and Ferraris revving up Singapore’s roads lately, don’t be alarmed. It’s just the super rich making Singapore their playground. According to Boston Consulting Group’s latest Global Wealth Report, released September 2008, Singapore has the highest density of millionaires in the world, with an astounding one in 10 households having an investible asset of US$1 million or more. This is followed by Qatar, Switzerland, United Arab Emirates and Kuwait. Even the United States pales in comparison, ranking sixth.

“Singapore is going through a major transformation. It is going upscale and is getting into the highest league of world’s hot spots for the high net worth individuals. It is going to be a happening place, a non-stop party cosmopolitan city. There are many more upscale and very high-end residences and condos coming up, that just a few years back were simply nonexistent, creating more choices for the real rich,� Alex Shlaen, founder of Panache Management, explains.

Singapore has always set its sights on attracting the rich. In 1993, the Urban Redevelopment Authority (URA) approved the Master Plan for Sentosa Cove to develop über luxurious residences. In 2005, the Singapore government announced plans to develop two casinos - the Marina Bay Integrated Resorts and Resorts World at Sentosa. To support the expected arrival of the wealthy, the Singapore Tourism Board (STB) announced more plans to develop the cluster of six islands near Sentosa into a hot new destination in 2006, possibly a super exclusive enclave for billionaires much like Italy’s Isle of Capri or Dubai’s The Palm Island. And why not? Sentosa Cove’s success has witnessed its residential property prices increasing 75 percent since the first homes were sold there in 2003. Some 60 percent of its buyers are wealthy foreigners.

Ironically, the financial scandal that is currently rocking Switzerland, is expected to bring more of them to our shores. In November 2008, Switzerland’s flagship bank, UBS, became the target of a US probe, which alleged that its wealth management chief Raoul Weil helped 17,000 Americans hide about US$20 billion of dollars in offshore Swiss bank accounts. Weil was subsequently charged along with other unidentified UBS bankers, leaving many investors to look elsewhere to park their funds – Singapore.

“In Europe the changing private banking regulations are scaring the high net worth, while here in Singapore the stability of the regulations and the banking sector’s proven success to withstand this massive world economy storm is a magnet for big private banking money,� Shlaen says. “The financial markets and real economy look really bad, especially for the west. Now, many feel that it will take more time for the west to recover then estimated earlier. However, recovery will come eventually. The more the situation deteriorates, the more dramatic the recovery will be. Asia is well positioned and will be a strong engine of the world recovery, with bigger share of money coming in, more than ever before.�

The recent Merrill Lynch Capgemini Wealth Report supports Shlaen’s comments. It estimated that global high net worth financial wealth will grow at an annual rate of 6 percent to reach US$44.6 trillion by 2010. Asia is expected to reach US$10.6 trillion by then, close to the European wealth market. These trends favour Singapore as a leading wealth management centre and so far, the results are promising.

According to the Monetary Authority of Singapore (MAS), total assets under management (AUM) in Singapore’s fund management industry has grown from about S$280 billion in 2000 to more than $600 billion as of 2007. The growth in private banking AUM has been strong, with anecdotal feedback suggesting Singapore private banking AUM averaging 20 percent per annum over the past few years to about US$200 billion currently.

In March last year, Macquarie Bank officially launched its Asian private wealth business with its first office in Singapore. The business is headed by one of Asia’s leading private wealth advisers, Joseph Poon, former JP Morgan Private Bank head for South Asia.

“The decision to establish Macquarie Private Wealth Asia in Singapore followed extensive
consultation with the Singapore market over the last several years,� Guy Hedley, head of Macquarie Private Bank Australia, says.

“Singapore is the world’s fastest growing private banking and wealth management centre and in the future will be one of only two global private banking and wealth management hubs, the other being Switzerland,� Poon says.

While the MAS’s 2008 figures aren’t available as yet, banks in Singapore are hiring wealth management staff in Singapore to cope with the demand now that jobs cuts are happening in London and New York. According to Kees Stoute, managing director of EFG Bank Singapore, the hiring of wealth management staff has increased

“It has increased by 30 percent as of 2008 and is set to continue growing. When it comes to managing wealth, EFG distinguishes itself more through its business model rather than through its products,� Stoute says.

While wealth management centres may be flourishing in Singapore, banks are facing a daunting task ahead in winning back investor confidence. Already, several high net worth investors have seen their wealth eroded due to the current economic crisis, bad product selling and making misinformed decisions. As such, independent financial advisory firms are slowly gaining headways as they tend to be less biased in their financial advisory process, are not obligated to any particular product providers and will not professionally accept deals and sponsorships. One such independent firm is PromiseLand Independent Pte Ltd, who has increased hiring of its financial advisers targeting for growth in 2009 and armed with an impacting range of products to support the Accredited Investors’ (see box for explanation) market.

“Between last year and this year we have increased our hiring by 40 percent. Ten percent of our advisers’ clients comprise high net worth individuals, translating to 40 percent of their total business contribution,� Benedict Tan, manager for PromiseLand’s business development & operations, in an exclusive interview with Property Report, said.

However, Stoute is confident that banks with healthy balance sheets will ride out the storm. As of 30 June 2008, EFG Bank’s net profit was CHF 178.7 million, up 13 percent year-on-year.

“EFG Bank is sound, solid and robust – our healthy balance sheet speaks for itself and this gives comfort to investors,� he concluded.

Where to invest in 2009?
In light of the economic crisis, banks are understandably reticent when asked about their opinion. One such bank is ING Private Banking Asia Pacific.

“We are not able to recommend specific private banking products to the public, hence unfortunately am not able to provide specific answers to this question,� Renato de Guzman, its CEO says.

However, Property Report managed to speak to a few experts on their investment advice.

According to EFG Bank’s senior investment managers, Harmen Overdijk and Lodewijk Lamaison, several markets to look into include the commodities and energy market, amongst others.

“We believe Asia will actually recover sooner than the rest of the world. The Asian economic fundaments are currently much stronger than during the Asian crisis. We also expect commodity and energy prices to start rising again. Many governments have announced to spend money on large infrastructure projects to stimulate the economy. We would recommend investing in infrastructure, materials and mining companies. We would also recommend investing directly in energy or alternative energy, for example through nuclear technology. In the current market liquidity and transparency are key words for any investment, so we would recommend building exposure through Exchange Traded Funds or selectively through very well established mutual funds,� Overdijk and  Lamaison, say.

According to PromiseLand’s associate director of private wealth, Venugopal V Nair, India is the market to look into.

“In the last year the currency in India has depreciated by 20 percent. The market has come down form the by more than 55 percent. There are a lot of developments in India and at this point, the value of the market is attractive. The Satyam case will improve corporate governance, which would instil better confidence in the market, leading to tighter regulations while existing companies will improve their current procedures,� Nair says.

Nair also says investors may want to consider the UK’s Brandeaux Student Accommodation Fund, which specialises in ground rent and student hostels. The fund has a geographically diverse portfolio across the UK that totals over 15,000 beds in residences located in 18 major university towns and cities.

“This fund has very little correlation to market conditions as it is focussed on student hostels. All the properties are leasehold owned by Dukes, Lords and nobles. The company buys this rights from people with these land titles. The student hostels are located in prime area like in London. They sell the units, you buy the units from the company – income from ground rent and extending the lease. The fund is always performing as there are students all the time,� Nair says.

Another private wealth manager from PromiseLand, Edward Eu, says high net worth investors might want to look at Prestige Funds and Superfunds.

“Prestige funds deal with agricultural products. If you go back to the basics, agriculture is still important,� Eu says.

Meanwhile, Superfunds are trend following fund dealing with commodities and indexes.

“Individuals can profit even if there are markets downturn or upturn,� Eu says.

As in all investments, there are risks involved. Thus, investors will need to seek additional advice from their respective banks and their financial advisers.

As the current crisis made painfully explicit, many financial institutions have an intrinsic conflict of interest that is simply impossible to avoid. Therefore, the importance of including a truly independent wealth manager like Crossinvest in the process becomes more and more evident. Even though this short article doesn’t deal with the most sophisticated aspects, it still describes a couple of fundamental reasons for working together with independent professionals. From Articlebase.com:

One of the most precious things that people like to protect is wealth. But did you know that now you can not just protect your wealth but monetize it further to make more money from it. This is called Wealth Management and it is quite an intelligent way of investing as well securing one’s wealth, property and different kinds of assets. And this is best done by a Wealth Management Company.

What is a Wealth Management Company? A wealth management company is a financial institution that advices you on how to invest your wealth in a way that you reap benefits in the shape of RoI or Return on Investment. These wealth management companies suggest you the right places where you can gain maximum benefits by investing your money.

Not just advices and suggestions, some wealth management companies also, on your request, make the investments and manage the portfolio, till the time you avail their services. So basically, a wealth management company suggests you the right places to invest and gain maximum returns and also invests your property and assets in the way you want, when you want them to do it for you.

Now comes the most important part. When it is your hard earned money or wealth and assets that you have inherited, properties that has been passed from generations to generations, then such wealth acquires not only high monetary value but also your personal attachment and emotions in some cases. In such a situation, you can not let them be managed by those who do not understand their worth or how dear your wealth is to you. 

Therefore, it is very important that you place your wealth in the right hands. You should be highly cautious while selecting your wealth management company and also remain wary throughout the time your wealth is being managed by someone else.

After a few years of success in Switzerland, Shorex brings its Wealth Management Forum in Singapore for this year. It will be very interesting to see if they’ll be able ot replicate the European success with the Asian audience. From http://www.shorexsingapore.com:

The Shorex Wealth Management Forum Singapore 2009

For the first time, the world’s leading Shorex wealth management forum is moving to Singapore to address the growing need of the Asian market for private banking, asset management and international tax planning solutions and services. The event is an exhibition and conference offering a unique platform where professionals can network to explore new services, products and ideas in wealth management.    The Shorex Wealth Management Forum will attract over 1200 participants from Singapore, Hong Kong, India, Indonesia, Malaysia, Thailand, Vietnam, Korea, Taiwan, the Emirates and China. After 7 years of success in Geneva as the most credible European platform for professionals advising HNWIs, Shorex is now launching its sister forum in Singapore, the undisputed centre of wealth management excellence in Asia. The event mainly focuses on professionals but also welcomes high net worth clients invited by our private banking partners. OBJECTIVES   - Provide a comprehensive networking platform for professional advisors & investors   - Enhance distribution channels for financial institutions   - Deliver knowledge updates from leading industry figures   - Introduce a global range of financial services for the Asian fast growing financial services sector   - Establish distribution agreements between international providers and local banks and advisers   - Design new products specifically made for the Asian markets   - Establish joint-ventures with local partners MORE - Conference Themes - Exhibitors Profile - The Audience - Singapore: Wealth Management Fastest Growing Market - Venue & Dates - Admission Policy - Apply for an Invitation

 

 

Here is an interesting little chart illustrating the developent of Singapore as a world-class Wealth Management centre from 1974 through 2007. By watching closely the developments affecting other wealth management jurisdictions like Switzerland and Liechtenstein, it is fair to assume that this trend will continue:

(From http://www.shorexsingapore.com/singapore-wealth-management-fastest-growing-market.html)

 

Singapore: Wealth Management Fastest Growing MarketÂ

In today’s turbulent times, Singapore is wealth managers’ most promising market. Asia Pacific contains 27% of the global HNW population and 23% of global wealth and HNWIs financial wealth in the region is forecasted to reach US$10.6 trillion by year 2010. Singapore, a premier financial hub, is relatively untouched by the sub-prime crisis and growing at nearly 20% annually. There are currently unprecedented opportunities and significant market shares to be taken in Asia for dynamic financial service providers active in Singapore. With the region poised as the largest growing market for the wealth management industry and Singapore as Asia’s capital of private banking where financial products are developed for Asia’s HNWIs, the potential for expansion is phenomenal.Financial Sector Growth & Evolution in Singapore 1974 - 2007     Â

Christophe Audergon will represent Crossinvest (Asia) Pte Ltd at the Private Banking Asia 2009 conference in Singapore, participating at the panel discussion “The future of independent asset managers in Asia”, on 26th March 2009 at 10.45am. Here is the complete programme (from http://www.terrapinn.com/2009/pbasg/programme.stm):

 

Pre-conference masterclass - Monday 24th March 2009   Â
9am	The art of advice : Leading wealth management businesses during tough times Wealth management differentiation      What makes a great Relationship Manager How do clients choose a Private Banker/Wealth Manager Service as a differentiator The future of Wealth Management Client relationship management Targeting the right client mix How to score and prospect clients Strategic Intent Strategic selling Advanced tactical and strategic selling skills Client profiles and needs-based selling Portfolio management in a bearish economy Delivering bad news to a client Determining portfolio strategies The right asset classes The changing global financial landscape   * All attendees for this workshop would receive membership to AAFM, compliments of AAFM   Registration for masterclasses start at 8.30 am. Masterclasses commence at 9.00 am and end at 5.00 pm. Lunch and refreshments will be served at the appropriate times. Â
Register Now!
Day One - Wednesday 25 March 2009   Â
THE SIGNIFICANCE OF ASIA IN GLOBAL PRIVATE BANKING
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8am	Registration & Breakfast      Â
8.45am	Chairperson’s Welcome Address      Â
9am	Keynote: The future of private banking globally      Assessing the global private banking industry and market complexities in Asia Lessons learnt from 2008 The future role of the private banker Creating a model for long term sustainable growth
9.45am	Thought leaders league panel: The new realities of the continued volatile global financial markets and its impact on the private banking landscape - is there still room for growth?      The global outlook on private banking and where is the Asian private banking heading amid the difficult landscape? What are the key challenges ahead for Asia’s private banking landscape with shifting demographics and volatile economic conditions and how would private banks withstand the storm? Exploring the trends in Asian private banking with insights into Asian customers needs and preferences and the importance of traditional values Are the current business models sustainable? How to improve on the cost & income ratio?
10.30am	Morning Refreshments      Â
INVESTORS’ PSYCHOLOGY AND ASSET ALLOCATION FOR HNWIS
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11am	Asset allocation and behavioral finance in wealth management      Understanding investors’ psychology and its application to investors and managers The role of risks and behaviour approach towards investments The psychological buttons of fear, greed, loathing, panic, disbelief and capitulation in financial markets
11.30am	Panel: Beating the bear: Constructing a portfolio that delivers higher absolute and total returns with less downside risks for HNWs investors      Is achieving a diversified portfolio applicable to Asian investors? Assessing the maturity of each of these asset classes with development stages of HNWs across different markets in Asia Understanding the usage and advantages of ETFs for rebalancing clients’ portfolio and complementing other investments What works now? Building a well diversified portfolio for HNWs using the latest portfolio structuring techniques
12.15pm	Speed networking    Â
12.30pm	Networking lunch reception      Â
TOWARDS MORE SOPHISTICATED PORTFOLIOS: CREATING INNOVATIVE PRODUCTS AND CLIENT-CENTRIC SOLUTIONS FOR HNWIS
Â
1.30pm	Panel: Pain or gain: Do structured prodcuts work for HNWs in a bear market?      How can investors in Asia better position themselves to profi t from the current volatile markets? The global macro and volatility environment in Asia’s developed and emerging markets Managing expectations in a bear market - valuable lessons learnt from previous turbulent times What is lacking in the current array of products to sustain growth and returns?
2.15pm	Investing in gold - The strategic case      Examining the recent price trends and relative performance Exploring the strategic properties of gold Forecasting the demand and supply of gold How to make sensible investments in gold?
2.40pm	Assessing arts as an investment      Deconstructing the risks and rewards profi le of art investments - is hedging the solution? Understanding the drivers of the art markets, how to manage illiquidity, lack of transparency, transaction costs and differences in expertise among art dealers and collectors Methods for analyzing and predicting pricing trends and appreciating potential correlations with other market factors The top five issues facing investors: information asymmetry, liquidity, access, supply and demand and symbolic value
FORMULATING WINNING STRATEGIES TOWARDS INCREASING CLIENTS & MARKET SHARE IN COMPETITIVE MARKETS
Â
3.10pm	Special address: Designing a global super brand. Lessons learnt from Shanghai Tang      The cult of the luxury brands – Asia’s penchant for prestigious brands. What can private banks learn from this? Successful case studies and branding strategies for building a global brand with emphasis on affluent customers in Asia Driving revenue and earning customers’ loyalty through cross cultural brand building
3.40pm	C Level Think Tank: Achieving real differentiation: The key to creating superior brand excellence and leadership      The evolution of the private banking models How to differentiate the bank while offering homogenous products and services? Differentiation through innovations in Asian private banking: process, products, services, segmentation & experience Sustainability of the differentiated advantage and maintaining the equilibrium factor – balancing the interests of clients vs shareholders
4.30pm	Afternoon Refreshments      Â
REVOLUTIONISING STRUCTURE FOR THE NEW FACE OF PRIVATE PHILANTHROPY
Â
4.45pm	Panel: What role should private banks have in the facilitation of philanthropy?      What are the trends and demand for philanthropy by Asia’s wealthy? What are the benefi ts and costs for private banks to be involved with their clients’ philanthropic giving? Evaluating the viable business models for private banks in Asia to be engaged in philanthropy
5.30pm	Case Study: Igniting philanthropy 2.0      Family foundations are evolving to stay relevant and deliver better results. What are the new tools and new models of philanthropy emerging in the field that are demonstrating impact, changing the conversation and infl uencing public policy? Explore how to harness new technologies and the media to spark innovative change in nonprofits and the community Enter the exciting world of international philanthropy and learn some simple solutions to meet the needs of Asia’s poorest and most vulnerable citizens Gain insights on nurturing the philanthropic impulse of UHNWI, and creating new points of convergence with corporate philanthropy
6pm	Closing remarks by Chairperson      Â
6.05pm	Networking Cocktail      Â
Register Now!
Day Two - Thursday 26 March 2009   Â
8am	Registration & Breakfast      Â
8.45am	Chairperson’s Opening Address      Â
CREATING NEW OPPORTUNITIES FROM ALTERNATIVE DISTRIBUTION
Â
9am	Special Address: Sustainability in Asia: A peek behind the scenes of economic, social and environmental imbalances      What does sustainability really mean beyond the rhetoric and what are the key sustainability challenges facing Asia? The major policy challenges governments must confront to turn the tide Why businesses must get engaged and understand the real cost of doing business? How private wealth can make a difference through smart enlightened investments for the future?
9.30am	Panel: The rise of the multi family office: Friend or foe?      Private bank vs. MFO: Which is a better model for UHNWs? Examining the increasing role and popularity with multiple family offices among the UHNWs Assessing the structure and investments needs of Asian family offices and their relationship with private banks Successful partnership: How can private banks benefit from the gaining popularity with MFO and capitalise on the opportunities The roadmap ahead
10.15am	Morning Refreshments      Â
10.45am	Panel: In conversation: The future of independent asset managers in Asia      Overview of the IAM business model Discussing the issues, challenges and opportunities for IAMs in Asia The quality of trust and advice from IAMs Evaluating the strategic relationship and partnership with private banks
NEXT GENERATION WEALTH TRANSFER: FROM WEALTH ACCUMULATION TO WEALTH PRESERVATION & WEALTH TRANSFER
Â
11.30am	Family affairs: Surviving inter-generational wealth transfer      Assessing the role of private banks in succession planning for families Generation Y: Getting to know and understand the expectations of the millennium kids and resolving family conflicts in succession planning The role of insurance in estate planning Highlighting the strategies tax planning unique to HNWIs international business & investments for wealth preservation
12pm	U Turn - Exectuve round table exchange      Â
12.30pm	Networking Lunch Reception      Â
OPPORTUNITIES & TRENDS IN EMERGING AND HIGH GROWTH MARKETS
Â
2pm	Panel: Capitalizing on the upward momentum of India’s billionaires and growing demand for sophisticated investments solutions      What are the regulatory restrictions for channeling offshore money to onshore? The impact of global economic crisis on future prospects of private banking inside the competitive landscape Exploring the trends, opportunities and connectivity between onshore and offshore banking for the Indian diasporas. Assessing what works and what does not work for Indian HNWs & NRIs Differentiating the investment preferences for domestic investors and NRI markets. Which asset classes work for them?
2.45pm	Panel: What are the opportunities of China’s growing competitive private wealth and landscape      Tailoring entry strategies across regions, cities and sectors – Is China a multi-strategy market to enter? The new balance of power: Is Renminbi taking the spotlight? Developing tailor-made products and customer-oriented service in a highly regulated China market. What are the regulatory constraints in the market? Reviewing challenges facing China’s private banking sector
3.30pm	Afternoon Refreshments      Â
4pm	Panel: Chartering the Islamic way of wealth: Trends & opportunities in Islamic wealth management in Asia      Innovation and best practices in Islamic private wealth management Understanding taxation issues for Islamic funds & investments Evaluating structures and strategies of Islamic wealth management Where are the growth areas of new Islamic funds - hedge funds, private equity funds and REITs?
4.45pm	Closing remarks by Chairperson      Â
4.50pm	Close of conference Day Two      Â
Register Now!
Post-conference masterclass - Friday 27 March 2009   Â
9am	The role of Trusts for asset protection in an economic downturn      The traditional banking model of using trusts to hold investments, supported by professional advisors is being challenged by the current volatile economic environment, client needs, and increasing transparency. 3rd party litigation has also raised issues on the effectiveness of Trust structures.   This masterclass provides an overview of issues with Trust structures established in common onshore and offshore jurisdictions. This session also discusses and examines practical approaches in the current environment and considers alternative solutions for providing protection and privacy. Introduction to the regulatory environment affecting asset protection in various jurisdictions such as: Barbados, British Virgin Islands, Cayman Islands, New Zealand and Singapore Review of the relevant criteria which affect the Trust’s performance as an asset protection vehicle Consideration of the pro’s and con’s of alternative vehicles such as foundations, limited liability companies and limited partnerships Analysis of client case studies Registration for masterclasses start at 8.30 am. Masterclasses commence at 9.00 am and end at 5.00 pm. Lunch and refreshments will be served at the appropriate times.

Wealth management prospers in Singapore

By Neil Chatterjee and John O’Donnell
Reuters

Sunday, December 14, 2008

SINGAPORE: As pressure mounts on UBS, the flagship bank of Switzerland, and that country’s secrecy code comes under fire from the United States and Germany, Singapore’s star as a haven for the super-rich is rising fast.

Singapore, a sun-drenched Asian city-state with the highest density of millionaires in the world, is seeing its wealth management industry prosper as the United States and Europe grapple with the worst slump in a generation.

Singapore’s strict bank secrecy rules are likely to be spared an assault similar to the one that Switzerland is defending itself against now, after UBS’s wealth management chief was charged with helping Americans hide money.

With close ties to power throughout Asia, Singapore is in a stronger position to resist pressure from the United States than either Switzerland or Liechtenstein, which partially reduced its bank secrecy protections recently.

“It’s a wealth center,” said Martyn Schilte, a manager in charge of selling million-dollar cars in Singapore. “If you look at the type of client we sell to, it’s people with a net worth of $50 million-plus.”

The city-state has its sights on attracting the world’s wealthy to its palm-tree-lined coastline, where some apartments come with a private yacht berth. Its plan is working.

As Asia’s elite move billions to the country, assets under management soared by a third last year to more than $800 billion.

The industry is still small compared with Switzerland’s. Singapore had $500 billion in offshore assets under management last year, according to the Boston Consulting Group, while Switzerland had four times as much.

But it puts the region on the map for banks hoping to capitalize on a more resilient Asia as economies in the West slow.

As jobs cuts cloud London and New York, banks like Credit Suisse and Macquarie Group of Australia are hiring wealth management staff in Singapore.

Bank of China is one of the latest to plan a wealth management arm in Singapore, hoping to meet millionaires like those who recently gathered to buy and sell private jets on the sidelines of a Formula One race.

“Singapore has developed a lot and has all the ingredients to compete internationally,” said Deepak Sharma, an executive in charge of Citigroup’s global wealth management business outside the United States.

Like Monaco, another tax haven, Singapore has a hard line on bank secrecy. It has not agreed to the standards of transparency and exchange of information as put forth by the Organization for Economic Cooperation and Development, or OECD, a grouping of 30 industrialized democracies.

Singapore, which is trying to grow financial services to wean itself from dependence on manufacturing, is on the International Monetary Fund’s list of tax havens and is a target of a proposed new U.S. law to fight tax abuses.

Another country that had similarly shunned the OECD, Liechtenstein, recently agreed to a landmark deal with the United States, paving the way for the exchange of account details with Washington in cases of tax evasion.

The agreement may pressure Switzerland into similar concessions, which could work to Singapore’s advantage.

Prime Minister Lee Hsien Loong of Singapore said this month such scrutiny in the West could lead to more European money flowing into the country, a hot talking point in the industry.

“It is interesting to notice a growth in the number of European clients booking wealth through Singapore, which unlike Switzerland does not recognize the European tax directive,” said Sebastian Dovey, a consultant at Scorpio Partnership.

But European cash comes with the risk that Singapore could be targeted in the crackdown on tax havens. “I expect Singapore to come under pressure, too,” Lee said.

The United States told Singapore and its banks last year to sever financial links with Myanmar’s military junta, widely believed to use Singapore as its main offshore banking center.

“Increasingly Singapore is looking out on a limb,” said Jeffrey Owens, director of the Center for Tax Policy Administration at the OECD. “It’s for the Singapore government to assess how the political climate is changing to protect the reputation of the Singapore brand.”

Singapore’s central bank has said that its confidentiality laws are not a shield for criminal activities and that banks can disclose customer information to assist such investigations.

Singapore is in a stronger position to resist the strong arm of Washington. Experts in the region point out that it is a U.S. military ally and one of the few Asian countries with a deep-water port that could hold a U.S. aircraft carrier.

Brussels, too, might shy away from a fight, as it is unclear how many Europeans park money in Singapore. Bankers have played down its significance as a destination for European money and say that most came from Asia, and in particular Indonesia.

Singapore’s central bank says over half the money managed in the city-state comes from outside the Asia-Pacific region, although this includes pension funds and hedge funds as well as private banking.

Ultimately, however, it may be politics that makes throwing down the gauntlet to Singapore difficult. To do so, said experts, would be an indirect challenge to China.

“If I were the Singapore government, I would not sign unless it’s on equal footing with Hong Kong, the key competitor,” said Roman Scott, managing director of Calamander Capital, a consulting firm.

The European Union, Scott said, is not putting pressure on Hong Kong, however, because it is reluctant to confront Beijing.

Furthermore, any agreement with Europe could pave the way for demands for the same treatment from places like Indonesia, Thailand or Taiwan.

“That is one of the reasons for the resistance as they do not want to open a Pandora’s box,” Scott said. “They are scared what might come up. The European customers are minor - what’s more important is that you do not want to open up everything for everybody.”