JANUARY 2012 BY SIMON DANAHER The beneficiaries of a Royal Skandia discounted gift trust (DGT), which was sold by an IFA to a client one year and three months before her death, have lost a court battle over whether the money is eligible for inheritance tax (IHT). On 21 Dec, 2004, Kath- leen Watkins, then aged 89 years and nine months, was advised to invest her money in a DGT for the benefit of her sons, David and Keith Watkins. A little over a year later, Kathleen Watkins died, BY HELEN BURGGRAF Hong Kong insurance bro- kers are expressing frustra- tion over a requirement that they inform clients when- ever they are to receive commission from the sale of insurance products, even though their rivals in the marketplace – insurance agents – do not have to. This transparency requi- rement is not new, having its origins in a 1997 law known as the Prevention of Bribery Ordinance. But pressure to abide by it has increased, in part as a result of a recent voluntary industry agreement pro- moted by what some bro- kers argue was a relatively small number of insurers. The result, claim the bro- kers, is that they are being burdened with a competi- tive disadvantage relative to the insurance companies’ tied agents, since these operate under a different business model that lacks a commission element – because they are consid- ered agents of the insur- ance companies whose products they represent. At the same time, there are concerns among some in Hong Kong’s insurance brokerage community that this newly-emphasised Continued on page 7 Trevor Smith has left Friends Provident Inter- national’s Hong Kong office, where he was Hong Kong sales director, to join Standard Life (Asia) as chief distribution officer. At Standard Life he suc- ceeds Roy Halliday, who was named chief executive officer last year, leaving a vacancy that was left unfilled until now. In his new role, Smith reports to Halliday, and will be based in the com- pany’s Time Square offices in Causeway Bay. At the Court rules against DGT beneficiaries’ IHT claim Smith leaves FPI for Standard Life role NEWS Axa Group sells Hong Kong-based Ipac 5 RL360˚ relaunches its Quantum offering 5 Sturgeon targets Central Asian equities 5 France goes after trusts with ‘mini-FATCA’ 7 Spectrum IFA opens new office in Italy 7 Providers react to HMRC’s QROPS reforms 7 Swiss Life withdraws from int’l retail market 8 Hartnett due to retire from HMRC this summer 8 Int’l money laundering gang is jailed 10 Investec expands its Luxembourg range 13 Deutsche names Masud as UAE chief officer 14 Julius Baer enters Chinese market with new office 17 Standard Bank names de Klerk as int’l head 17 Threadneedle rolls out Lux-domiciled UK fund 18 HSBC Global AM opens frontier fund to retail 18 Old Mutual sells Nordic Skandia operations 21 Aviva closes to business in the Middle East 21 Singapore raises stamp duty for foreigners 52 For Distributors of International Fund, Life and Banking Products www.international-adviser.com Features – page 4 aged 91. The trust, which it had been anticipated would be a potentially exempt transfer, became chargeable. The latest ruling was made after an appeal by the two sons over an earlier court case, which found that HM Revenue & Customs was right to charge IHT on the assets held in the trust. The main reason the trust was eligible for IHT was because the court decided that it could not be proven, and was therefore unlikely, that a life policy against Kathleen Watkins end of December, his suc- cessor at Friends Provident International (FPI) had not yet been named. At Standard Life, Smith’s brief will include further developing the company’s Hong Kong business and strengthening its team, while working to develop new markets in the region, the company said. Smith, who is from the UK, came to Hong Kong ten years ago, after 16 years with Clerical Medical’s City of London operation. Standard Life and FPI both have estimated market shares in Hong Kong’s investment-linked insur- ance market of around 5% each. HK insurance brokers dispute ‘bribery’ rules South America As Brazil’s economy develops, financial services providers are taking a closer look at the rest of South America Regional profile 24-26 would be attainable on the open market, as is required for the trust to work. A spokesperson for Skandia International said the company was not involved in the sale of the product as it does not pro- vide advice to clients. Rachael Griffin, head of product law at Skandia said: “DGTs can play an important role in a well considered IHT planning strategy. The actual dis- count applied is a matter to be agreed by HMRC and the executors of the estate in question.” Continued on page 5 John Van Der Wielen The newly appointed head of the international operation at Friends Life discusses his business objectives MD profile 22-23 London & Capital The company explains how it focuses on clients interested in staying rich rather than getting rich Intermediary profile 30-31 Smith: ‘Hong Kong position’
Transcript
JANUARY 2012
BY SIMON DANAHER
The beneficiaries of a Royal Skandia discounted gift trust (DGT), which was sold by an IFA to a client one year and three months before her death, have lost a court battle over whether the money is eligible for inheritance tax (IHT).
On 21 Dec, 2004, Kath-leen Watkins, then aged 89 years and nine months, was advised to invest her money in a DGT for the benefit of her sons, David and Keith Watkins.
A little over a year later, Kathleen Watkins died,
BY HELEN BURGGRAF
Hong Kong insurance bro-kers are expressing frustra-tion over a requirement that they inform clients when-ever they are to receive commission from the sale of insurance products, even though their rivals in the marketplace – insurance agents – do not have to.
This transparency requi-re ment is not new, having its origins in a 1997 law known as the Prevention of Bribery Ordinance. But pressure to abide by it has increased, in part as a result of a recent voluntary industry agreement pro-moted by what some bro-kers argue was a relatively small number of insurers.
The result, claim the bro-kers, is that they are being burdened with a competi-tive disadvantage relative to the insurance companies’ tied agents, since these operate under a different business model that lacks a commission element – because they are consid-ered agents of the insur-ance companies whose products they represent.
At the same time, there are concerns among some in Hong Kong’s insurance brokerage community that this newly-emphasised
Continued on page 7
Trevor Smith has left Friends Provident Inter-national’s Hong Kong office, where he was Hong Kong sales director, to join Standard Life (Asia) as chief distribution officer.
At Standard Life he suc-ceeds Roy Halliday, who was named chief executive officer last year, leaving a vacancy that was left unfilled until now.
In his new role, Smith reports to Halliday, and will be based in the com-pany’s Time Square offices in Causeway Bay. At the
Court rules against DGT beneficiaries’ IHT claim
Smith leaves FPI for Standard Life role
NEWSAxa Group sells Hong Kong-based Ipac 5
RL360˚ relaunches its Quantum offering 5
Sturgeon targets Central Asian equities 5
France goes after trusts with ‘mini-FATCA’ 7
Spectrum IFA opens new office in Italy 7
Providers react to HMRC’s QROPS reforms 7
Swiss Life withdraws from int’l retail market 8
Hartnett due to retire from HMRC this summer 8
Int’l money laundering gang is jailed 10
Investec expands its Luxembourg range 13
Deutsche names Masud as UAE chief officer 14
Julius Baer enters Chinese market with new office 17
Standard Bank names de Klerk as int’l head 17
Threadneedle rolls out Lux-domiciled UK fund 18
HSBC Global AM opens frontier fund to retail 18
Old Mutual sells Nordic Skandia operations 21
Aviva closes to business in the Middle East 21
Singapore raises stamp duty for foreigners 52
For Distributors of International Fund, Life and Banking Products www.international-adviser.com
Features – page 4
aged 91. The trust, which it had been anticipated would be a potentially exempt transfer, became chargeable.
The latest ruling was made after an appeal by the two sons over an earlier court case, which found that HM Revenue & Customs was right to charge IHT on the assets held in the trust.
The main reason the trust was eligible for IHT was because the court decided that it could not be proven, and was therefore unlikely, that a life policy against Kathleen Watkins
end of December, his suc-cessor at Friends Provident International (FPI) had not yet been named.
At Standard Life, Smith’s
brief will include further developing the company’s Hong Kong business and strengthening its team, while working to develop new markets in the region, the company said.
Smith, who is from the UK, came to Hong Kong ten years ago, after 16 years with Clerical Medical’s City of London operation.
Standard Life and FPI both have estimated market shares in Hong Kong’s investment-linked insur-ance market of around 5% each.
HK insurance brokers dispute ‘bribery’ rules
South America As Brazil’s economy develops, financial services providers are taking a closer look at the rest of South America
Regional profile 24-26
would be attainable on the open market, as is required for the trust to work.
A spokesperson for Skandia International said the company was not involved in the sale of the product as it does not pro-vide advice to clients.
Rachael Griffin, head of product law at Skandia said: “DGTs can play an important role in a well considered IHT planning strategy. The actual dis-count applied is a matter to be agreed by HMRC and the executors of the estate in question.”
Continued on page 5
John Van Der Wielen The newly appointed head of the international operation at Friends Life discusses his business objectives
MD profile 22-23London & CapitalThe company explains how it focuses on clients interested in staying rich rather than getting rich
Intermediary profile 30-31
Smith: ‘Hong Kong position’
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4 INTERNATIONAL ADVISER [www.international-adviser.com] JANUARY 2012
PROFILES
contents
IA Intermediary PanelGraham BarnesDirector, international division, The Fry Group, UK
Tony ShahAssociate director, Christchurch Investment Mgt, UK
David BellinghamCEO, Professional Investment Advisory Services, Singapore
Gary BoalManaging director,Boal & Co, Isle of Man
Glen CochraneInvestment director, Creechurch Capital, IoM
Tim SearleChairman, Globaleye, Dubai
IA Tax Panel
Brendan HarperTechnical services manager, FPI
Neil ChadwickTechnical manager, Royal London 360º
Margaret JagoInternational technical manager, Aegon Ireland
Rachael GriffinHead of product law and financial planning, Skandia International
Gerry Brown Head of trusts and taxation, Prudential
Mark GreenHead of estate and tax planning, Legal & General International
Brian MurphySenior financial planning manager, Axa Sun Life
Julie HutchisonHead of international technical insight,Standard Life Int’l
Paul Kennedy Business development director, FundsNetwork
Ernest ChanChief commercial officer, Convoy Financial Services, Hong Kong
Sam Instone Director, AES International, UK
TECHNICAL
Briefing: Retirement income 34-35As life expectancies rise and birth rates fall, corporate and state pension systems around the world are coming under pressure. Individuals should therefore not rely on traditional schemes to fund their retirement, argues Luanne Ahearne, a technical consultant at Royal London 360˚. Instead, investors should consider such products as offshore regular premium savings policies, which aim to generate capital growth over the medium to long term, and offer a range of asset classes, risk profiles, and currency denominations
Robert ParkerChief executive, Holborn Assets, Dubai
Sean KelleherChairman, Financial Partners Group, Dubai
MD profile: John Van Der Wielen 22-23Having joined Friends Life as managing director of its international businesses in November last year, John Van Der Wielen describes his background and what attracted him to the role. He also sets out his plans for the future, which include a whirlwind tour of the company’s offices and distributors, and a review to ensure that its structure and strategy are compatible
Mahmoud NodjoumiChairman and chief exec, Nexus Group, Dubai
Mike Coady Director, deVere Group, Western Europe
PORTFOLIO
Fund selector: Global emerging market debt 37-39Investors were last year reminded about the volatility that emerging market debt strategies can suffer. Emma O’Neill at OBSR examines the asset class in detail
CLASSIFIEDS
Recruitment 50-51Find the job that suits you in IFA firms operating around the globe
FEATURES
Gulf Expert Investor Forum 32-33More than 180 delegates attended the International Adviser Gulf Expert Investor Forum, which took place in Dubai at the end of November. Attendees heard speeches from a range of experts from around the world, and participated in breakout seminars, one-on-one question and answer sessions, and roundtable discussions
Mark RawsonBusiness director, The Henley Group, Hong Kong
Paul StanfieldChief executive, FEIFA
Sandra Hogg Senior tax manager, Scottish Widows
Rex CowleyPrincipal, Newdawn Consultancy & Research, Jersey
Bill BlevinsManaging director, Blevins Franks, pan-Europe
Sarah LordWealth planning director, Killik & Co, Middle East & Asia
Rainbow PanCEO, ipac, Hong Kong
Chris AllattSenior tax consultant,Sanlam UK
Anthony RothwellTechnical consultant,Canada Life International
Regional profile:South America 24-26Few investors saw the potential of South America ten years ago, but the continent has grown in terms of its economic importance and is proving more attractive to financial services providers. Helen Burggraf examines the rise of the region and the challenges it poses to the IFAs who work there
Intermediary profile:London & Capital
30-31With an approach that focuses on wealth preservation rather than accumulation, London & Capital has built a high net worth client base, with $3bn in assets under advice. The company plans to target new segments, including divorcees and beneficiaries of personal injury claims
Life listings 47-48
Service listings 49
The IA Quality Funds40-45
A list of the blue chips of the offshore fund world
Court rules against DGT beneficiaries Continued from page 1“The illustrations that we provide are based on HMRC agreed principles so will be a good guide. Even if no discount is agreed by HMRC, DGTs still offer value in terms of ensuring future investment growth is outside of the estate for IHT purposes, and that the potentially exempt transfer rules are utilised. Financial advisers are well placed to determine whether a DGT is an appropriate product for someone’s individual needs,” Griffin added.
Generali appoints James Weston Guernsey-based life insurer Generali International has hired James Weston, the former head of strategic partners at Skandia International, for its newly-created head of bank distrib-ution role. Weston’s appointment is in line with the company’s ambition to expand its distribution model.
UK Treasury delays residency test draftThe UK Treasury has postponed the publication of draft legislation that would have established a statutory residency test. The legislation had been due to be published in the draft Finance Act 2012 last month, but the Treasury announced it would delay the draft legislation until the Finance Act 2013.
For the current and all previous editions, with full news archive, go to
www.international-adviser.com
Hedge fund manager Sturgeon Capital plans to launch a Ucits-compliant Central Asia Equities Fund, offering investors expo-sure to such markets as Kazakhstan, Turkmenistan and Georgia.
The Luxembourg-domiciled fund, Sturgeon’s first foray into the retail market, is designed to tap into Central Asian growth, which has been boosted by demand from China and India for its natural resources.
Sturgeon, which runs a $30m multi-strategy Central Asia hedge fund, says the Ucits portfolio will have 25 to 35 holdings. The fund will be “long-biased” but will also be able to take short positions in commodities and indices, by using exchange traded funds and derivatives.
Towards the end of December, the largest weighting in a mock-up portfolio was to Kazakhstan, the ninth-larg-est country in the world by land mass and the big-gest exporter of uranium. Other exposures included Turkmenistan, Tajikistan, Georgia, Mongolia, Turkey and Russia.
According to Sturgeon, named after the caviar-bear-ing fish found in Central Asia, the fund will take advantage of “under-devel-oped and fundamentally inexpensive” markets in the region. It will be managed by Clemente Cappello, the company’s founder.
The fund, which is expected to be unveiled early in the second quar-ter of 2012, will have an annual management fee of 2%, and a 20% perform-ance fee. To protect per-formance, Sturgeon plans to close the portfolio to new money, if and when its assets reach approxi-mately $300m.
Sturgeon plans Ucits fund to target Central Asian equities
BY HELEN BURGGRAF
Axa Group plans to sell those parts of its Hong Kong-based Ipac advisory company that it did not dis-pose of last year, as it seeks to end a nine-year affilia-tion with the self-described “holistic lifestyle financial planner”, sources in Hong Kong and Singapore say.
As International Adviser went to press, Axa was said by these sources to be in the final stages of a sale agreement with an undis-closed Australian com-pany, and understood to have obtained permission for the deal from Hong
Axa Group sells Hong Kong-based Ipac advisory firm
Kong’s regulator.It had also sought per-
mission from the regula-tor in Singapore, where Ipac also has offices, the sources said.
Ipac chief executive, Rainbow Pan, declined to confirm that Ipac was on the block, saying it was company policy not to comment on “speculation [and] rumours”. Axa Group also did not respond to requests for comment.
According to those familiar with Ipac, which specialises in providing high-end, fee-based advice to wealthy expats and local residents in all its jurisdic-
tions, the firm has not been profitable in recent years.
News of Axa’s inten-tions to shed the remainder of Ipac follows reports that it is also looking to sell most of its London-based Bluefin advisory business.
The firm continues to keep a foothold in the Hong Kong market with Integrity Financial Advice Network, which it estab-lished in 2010. Integrity, a platform business, is aimed at financial services profes-sionals who cater mainly for local clients.For a profile of Ipac, see page 23 of the September 2011 issue of IA.
RL360˚ relaunches its Quantum offeringBY WILL JACKSON
Royal London 360° has revamped Quantum, its international regular sav-ings product, and launched a ‘superhero’ advertising campaign to raise aware-ness of the changes.
Several new features have been added to Quantum: 100% allocation for all regular premiums; Australian dollars as a policy currency; premium incentives for qualifying top-ups; and revised policy exchange rates to reflect market conditions.
The Emirates Securities & Commodities Authority (ESCA) is likely to become the “wholesale regulator” in the UAE, regulating life companies to IFAs, accord-ing to HSBC’s Daniel Rudd.
Rudd, the bank’s head of wholesale distribution for the MENA region, said it is only a matter of time before ESCA, which was created in 2000, takes charge of all aspects of financial regulation.
ESCA tipped to be ‘wholesale regulator’ for UAE
The company has also introduced an enhanced fund range, which includes: Australian dollar funds to complement the new policy currency; extra Islamic
funds; and additional cur-rency variants to limit cur-rency exchange fluctuation.
“I expect the new fea-tures, especially the 100% allocation for all regu-lar premiums, to attract an even broader range of investors at the lower pre-mium level,” said Natalie Hall, the director of market-ing at Royal London 360°.
Quantum is available to single and joint life inves-tors in the international markets in which Royal London 360° operates – excluding the UK, Hong Kong and Lebanon.
The regulation of finan-cial institutions in the UAE is currently shared between the UAE Central Bank, with which most asset management com-panies are registered; the Insurance Authority, with which most international life companies and IFAs are registered; and the Dubai Financial Services Authority, which regulates activities in the DIFC.
It is understood that
ESCA will become the main regulator of asset man-agement activities in the UAE, and is consulting on new rules that are expect-ed to be implemented in 2012.
Early drafts of the rules proved controversial – in particular a suggestion that life companies may be responsible for register-ing new funds with ESCA, rather than this duty lying with asset managers.
NEWSIN BRIEF
JANUARY 2012 [www.international-adviser.com] INTERNATIONAL ADVISER
Hall: ‘investor range broadened’
For professional investors or advisers only. *Source for team: Schroders as at 31 October 2011. **Source: Schroders as at September 2011. Past performance is not a reliable indicator of future results, prices of shares and the income from them may fall as well as rise and investors may not get back the amount originally invested. Issued in November 2011 by Schroder Investment Management Limited, 31 Gresham Street, London EC2V 7QA. Registered number 1893220 England. Authorised and regulated by the Financial Services Authority. w40852
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NEWS
HK insurance brokers dispute sales ruleContinued from page 1commission disclosure requirement could saddle them with a significant potential historical liability, were they to be accused by a client of failing to obtain consent to receive the commissions that were subsequently paid.
“What we want to know is, where the heck is transparency for the agents as well [as the brokers] in all of this?” said Glenn Turner, a Hong Kong adviser who is also chairman of the Independent Financial Advisors Association.
Caruana ends tenure as Gibraltar ministerVoters in the British overseas territory of Gibraltar have replaced their chief minister of the past 15 years, Peter Caruana, with Socialist Labour Party member, Fabian Picardo. Observers said the vote was more about a desire for a change in leadership style than political philosophy.
Facebook adviser fined HK$20,000 An unlicensed adviser in Hong Kong was fined HK$20,000 ($2,600) last month, and given a community service order of 80 hours for advising on securities via the social networking website Facebook. According to Hong Kong’s Securities and Futures Commission, Lo Kam Chung gave advice between April and November 2010.
For the current and all previous editions, with full news archive, go to
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The QROPS industry has until the end of this month to respond to a consultation on contro-versial changes to legis-lation announced by HM Revenue & Customs at the start of December 2011.
Unanticipated by the industry, the reforms were published as part of the UK’s Autumn Statement alongside the Finance Bill 2012, and were mainly tar-geted at preventing pen-sioners from using QROPS to move their pensions out-side of the UK, in order to take a tax-free lump sum.
However, as well as including clauses aimed at preventing this, particularly in New Zealand where the practice has been wide-spread, HMRC introduced clauses which could, if enacted as they stand, be detrimental to other “third country” jurisdictions.
The main concern is around Condition 4, which stipulates that a QROPS must be taxed at the domestic rate of tax of the jurisdiction in which it is based, or that residents of that jurisdiction are treated in the same way as mem-bers of the QROPS for tax purposes.
Many in the QROPS industry welcomed the new legislation, saying it was time HMRC moved to stop potentially illegal prac-tices. But an online poll conducted by International Adviser revealed that 76% of readers believed HMRC had gone too far with its proposals.
Rex Cowley, a former head of marketing and QROPS specialist at Close, and now of New Dawn Consultancy, said: “Providers and advis-ers need to stay close to this process over the coming months, so they are best placed to advise their clients.”
Providers react to HMRC’scontroversialQROPS reforms BY HELEN BURGGRAF
Tax specialists who have studied France’s new tax regime for wealthy individ-uals are likening its treat-ment of trusts to elements of the much-bemoaned US Foreign Account Tax Compliance Act (FATCA) regulations.
Just as the FATCA obliges non-US financial institutions to furnish the Internal Revenue Service with details concern-ing assets held in over-seas accounts by US cit-izens, they say, the Loi de Finances Rectificative pour 2011 contains meas-ures that oblige trusts and
Talk of ‘French mini-FATCA’ as France goes after trusts
their trustees to report to French tax inspectors on the trust’s French assets, their French beneficiaries, and/or French settlors.
Reporting is also required even if all the parties to the trust reside outside of France, if the trust holds French assets, such as loans, real estate, stocks and shares.
Virginie Deflassieux, associate director of French tax at PKF (Channel Islands), said last month that she and her colleagues had been “sifting through client portfolios” to identify trusts affected by the rules.
The new law, added Gerry Brown, technical
manager of Prudential, could be seen as a pos-sible “thin end of a FATCA wedge”.
Meanwhile, France is seeking to borrow yet another page from the US’s FATCA book, with plans to extend the scope of back assessments on undeclared foreign assets.
Just as the US has taken to enforcing long-existing rules requiring its citizens to report on all of their for-eign bank accounts, France is proposing to extend to ten years, from the current three, the period of time undeclared foreign assets may be assessed for back tax and penalties.
Spectrum IFA targets the Italian marketThe Spectrum IFA Group has opened an office in Rome to cater for the 28,000 British nationals that the Foreign & Commonwealth Office estimates live in Italy.
Heading the office is Gareth Horsfall, a UK-qualified finan-cial planner who has lived in the city for the past seven years. Most recently he looked after Britons living in Italy for AES International, the London-based IFA net-work, which no longer has an office there.
The Rome office brings
BY SIMON DANAHER
Ignis Asset Management is registering its Absolute Return Government Bond Fund for sale across Europe – starting with Spain, where the fund was registered last month.
The fund, a Luxembourg-domiciled Ucits III compli-ant Sicav, was launched in the UK on 13 March, 2011. By 13 Dec, 2011, it had assets under management
Ignis rolls out its Absolute Return Bond in Europe
to six the number of coun-tries in which Spectrum has a presence, after France, Spain, Switzerland, Luxembourg and the Netherlands. The company
employs 44 advisers, and the plan in Italy is to “build a team” around Horsfall, according to Michael Lodhi, chairman and co-founder of the company.
Horsfall notes that Italy has proved a challenging market for UK financial advisers, because Britons in Italy tend to be scattered thinly across the country.
“There are a few hot spots, such as Rome and Milan, but even in these places, the expat popula-tion has been hit quite hard by the economy,” Horsfall said.
of €115m ($150m) and by 19 Dec had returned 5.7% from launch, according to FE Analytics.
The UK-based asset manager said that, as well as Spain, it plans to reg-ister the fund for sale in Italy, Austria, Germany, Switzerland and France during 2012.
Managed by the com-pany’s head of rates, Russ Oxley, and chief economist Stuart Thomson, the fund
invests primarily in govern-ment bonds, but also takes long and short positions in money market instruments and derivatives. Foreign currency exposure is lim-ited to 25%.
“We know Spanish investors are frustrated by the poor performance of absolute return funds in general,” said Mauro Loran, regional director, Iberia and Latin America, at Ignis.
NEWSIN BRIEF
JANUARY 2012 [www.international-adviser.com] INTERNATIONAL ADVISER 7
Horsfall: ‘building a team’
NEWS
INTERNATIONAL ADVISER [www.international-adviser.com] JANUARY 20128
Swiss Life calls time on its foray into int’l retail marketBY SIMON DANAHER
Swiss Life will completely withdraw from the interna-tional retail market, in order to “refocus on the corpo-rate and high net worth segments” of its business.
The company has ter-minated relationships with several international IFAs through which it had dis-tribution agreements.
Swiss Life’s foray into the international retail space was short lived, with the project encountering difficulties early on.
In January 2010, it appointed industry veteran Carlos Sabugueiro from Zurich International Life,
to develop its internation-al retail proposition. It is understood that the offer-ing was likely to include investment products within an insurance “wrapper”.
However, one year later, Sabugueiro left Swiss Life. The company cited “differ-ences regarding the strate-gic direction of the project”, and said it would continue to develop the proposition.
In a letter terminating its relationship with one inter-national IFA group, Swiss Life said: “We would like to inform you that the board of directors of Swiss Life Group has decided to refo-cus its international divi-sion on the corporate and
Hartnett due for retirement from HMRCBY HELEN BURGGRAF
Dave Hartnett, the HM Revenue & Customs (HMRC) official who was criticised by some politi-cians for his role in giving Goldman Sachs a break on tax monies owed, will retire this summer.
The departure of Hartnett, who turns 61 next month, was revealed in an announcement of the appointment of Lin Homer as HMRC’s new chief executive.
Homer, permanent sec-retary at the Department for Transport, will take over from Lesley Strathie, who was forced to step down in November owing to illness. She takes up the post this month, and will be responsible for choos-
high net worth segments.“As a consequence, and
with immediate effect, Swiss Life Products (Luxembourg) will no longer accept any business under the ‘free-dom to provide services’ regime. This includes all the ‘affluent’ solutions that were offered directly from Luxembourg. Business sold via our branches in existing Swiss Life markets will not be affected.”
A spokesperson for Swiss Life confirmed the company’s withdrawal from the international retail sector, and said there had been a “few unavoid-able job redundancies” as a result.
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10,097 July ’10 – June ’11
BY ESTHER ARMSTRONG
The UK Financial Services Authority (FSA) has banned and fined a former client adviser at UBS £150,000 ($230,000), for breaching its code of conduct and failing to act with integrity.
Jaspreet Singh Ahuja, who worked within UBS’s London wealth manage-ment business, is now pro-hibited from performing any function in relation to a regulated activity in the financial services industry.
During the period between 1 Jan, 2006 and 30 Jan, 2008, Ahuja used a pre-existing investment struc-ture to enable an Indian resident customer, via an investment fund incorporat-ed in Mauritius, to breach Indian law.
The client invested over $250m in the fund. Under Indian law, investors are not permitted to invest in Indian securities through “Foreign Institutional Investor” vehicles, except in particular circumstances.
Following his wrong-doing, Ahuja took steps to conceal the true nature of the investment, by giving misleading information to the UBS compliance depart-ment, among others. Finally Ahuja assisted in making unauthorised redemption payments out of the fund, knowing the redemptions were not properly author-ised by the customer.
Tracey McDermott, the FSA’s acting director of enforcement and financial crime, said: “This behaviour has no place in the financial services industry.”
Canaccord buys Collins Stewart Hawkpoint
FSA bans UBS adviser, issues £150,000 fine
BY GARY CORCORAN
Collins Stewart Hawkpoint will be acquired by Canadian brokerage firm Canaccord, in a deal expected to be worth £250m ($390m).
Canaccord, which wants to expand its UK brokerage and wealth management business, had reportedly been in talks with Collins Stewart since September.
Under the terms of the agreement, shareholders in Collins Stewart will receive 96 pence per share, which includes 57.6 pence in cash and 0.072607 of a share in Toronto-based Canaccord.
The deal was the third acquisition by Canaccord in 2011, following its take-over of The Balloch Group in China in January, and its purchase of a 50% share in BGF Capital Group.
In 2010, it built on its investment banking busi-ness with a £180m cash and stock takeover of Genuity Capital Markets.
Collins Stewart has 850 UK staff, and a large presence in the Channel Islands, Singapore and the US.
Tim Ingram, chairman of Collins Stewart, noted that the combination of the two firms would strength-en the enlarged group’s capital markets, advisory and wealth management presence in North America, Europe and Asia.
Paul Reynolds, chief executive of Canaccord, added: “When the trans-action closes, Canaccord will have operations in 12 countries.”
Hartnett: ‘tax break criticism’
ing Hartnett’s successor.Hartnett’s retirement
had been expected, since the normal age of retire-ment is 60. Nevertheless, some observers suggested his departure had been hastened by publicity sur-rounding the Goldman Sachs matter, which involved HMRC giving the bank a £10m ($16m) break, evidently in error, on pen-
alties owed in connection with an offshore company the bank was using.
Others, though, praised Hartnett, a former tax inspector, for the inno-vation and openness he brought to HMRC. Several tax amnesty schemes and anti-tax evasion campaigns, including the Liechtenstein Disclosure Facility, were implemented while he was in charge, they noted.
Homer qualified as a lawyer in 1980 and began her career with Hertfordshire County Council, where she stayed for 15 years, rising to director of corporate services. She worked her way through several gov-ernment posts until she reached the transport department in 2010.
AMBEST
B++ Good
Financial Strength Rating
»»»»»»»
NEWS
INTERNATIONAL ADVISER [www.international-adviser.com] JANUARY 201210
an important business, serving both our domestic and international clients. I have every confidence that Sofia and Vincent will con-tinue to develop this strate-
Int’l money laundering gang is jailed after investigation
Anti-tax haven campaign is launched by UK-based TJNBY HELEN BURGGRAF
Tax Justice Network (TJN), a UK-based anti-tax haven organisation, has started a campaign to call attention to the impact low- and no-tax jurisdictions have on people in higher-tax countries.
The European Network on Debt and Development (Eurodad) said TJN launched the campaign, Tackle Tax Havens, to “highlight the critical role that [tax havens] play in corrupting the global economy”.
Eurodad cited research from TJN that it said shows tax evasion “costs 145 countries, representing over 98% of world GDP, more than $3.1trn annually”.
“In the UK… a stagger-ing £69.9bn a year is lost to tax evasion in the ‘shadow economy’ – that is, 56% of the country’s total health-care spend,” it added.
According to TJN, three conditions must be met in order to resolve the prob-lem of tax havens. First, all jurisdictions considered to be tax havens must put details of the ownership of all companies and trusts located in them, and the accounts of those organisa-tions, on public record.
Second, all multination-al companies should pub-lish accounts that reveal their use of tax havens.
Last, all tax havens should be required to exchange information each year on the income gains recorded in their financial institutions that belong to citizens of other countries, with the tax authorities in the countries in which those individuals reside.
Eurodad is a Brussels-based network of 54 non-governmental organisa-tions from 19 countries that share a common interest in issues relating to debt.
Friends Life has launched a Shariah-compliant insur-ance business in Malaysia, three years after it acquired a 30% stake in AmLife, a major Malaysian insurer.
An announcement to the London Stock Exchange last month marked the signing of a shareholder agreement by Friends Life with AMAB, a wholly-owned subsidiary of AmBank Group.
The deal established AmFamily Takaful Berhad, which will manufacture and sell Shariah-compliant family Takaful business, subject to final approval from the Malaysian regulator.
Initial paid-up capital of AmFamily Takaful will be RM100m ($31m), of which Friends Life is contributing RM30m and AmBank the remaining RM70m. The chief executive of AmFamily Takaful is Wan Zamri Bin Wan Zain.
John Van Der Wielen, the recently-appointed managing director of Friends Life’s international business, hailed the deal as “an exciting development”.
Takaful offers an alter-native to conventional insurance for Muslim inves-tors, allowing scheme members to pool money in a way that guarantees one another against loss or damage.
For more on John Van Der Wielen and Friends Life, see MD Profile on page 22.
BY RAY CLANCY
Four men who created a tangled web of financial transactions across the globe, in an attempt to launder $15.5m stolen 11 years ago from a German bank, have been jailed.
The criminal gang used offshore companies con-trolled by trusted associates and offshore banks, in jurisdictions including the Channel Islands and Cyprus to try to hide the trail, before transferring the money to the UK.
But an extensive finan-
cial investigation by the UK-based Serious Organised Crime Agency (SOCA) unpicked the com-plex trail and found that the money was originally stolen by Matthew Holmes and Donald Somers, who worked for Commerzbank in Germany.
Both men were convict-ed in Germany but the money could not initially be traced.
SOCA investigators dis-covered that another employee of the bank, Leigh Greest, had enlisted a specialist criminal money
laundering group headed by Herbert Austin to try to obscure the money trail.
Austin and co-conspira-tors Raymond Jewitt and Anthony Heald created an international system to receive and wash the stolen money, which was eventually transferred to accounts of Equity Holdings and Investments, and Westfield Corporation in the UK.
Austin was jailed for eight years, Greest for two years, and Heald and Jewitt for three and five years respectively.
BY WILL JACKSON
Index provider MSCI has decided not to upgrade Qatar and the United Arab Emirates (UAE) from fron-tier to emerging market status, following an extend-ed review period.
The announcement was a disappointment to some investors in the region, who at the start of 2011 were anticipating a “wave of fund flows” into the two countries upon their expected promotion to the MSCI Emerging Markets
Index last May.However, MSCI delayed
its potential re-classifica-tion decision, following the implementation of delivery versus payment (DVP) models on the Qatar Exchange, Dubai Financial Market and Abu Dhabi Securities Exchange, to allow market partici-pants to assess their effectiveness.
In its statement last month, MSCI said that, while international institu-tional investors were upbeat on the introduction
of the DVP model in the UAE and Qatar, they were concerned that the new framework would not fully safeguard their assets under certain circumstances.
In particular, they were worried about failed trades, “where a forced sale of assets, without the owner’s consent, remains a possibility”.
As a result, many inter-national investors and their custodians continued to view the use of a dual account structure as a requirement, it said.
Qatar and UAE remain frontier markets
BNP names Merlo and Lecomte to run wealth management arm
Friends unveils Takaful offering in Malaysia for Muslim clients
Merlo: ‘strategic development’
Van Der Wielen: ‘exciting deal’
BNP Paribas Group has appointed Vincent Lecomte and Sofia Merlo as co-heads of its wealth man-agement business.
They report to both Jacques d’Estais, deputy chief operating officer of BNP Paribas Group and head of the investment solutions division, BNP Paribas Personal Finance and International Retail Banking; and François Villeroy de Galhau, the chief operating officer of BNP Paribas Group and head of domestic markets.
“Wealth Management is
gic business, drawing on BNP Paribas Group’s broad range of advisory and management expertise,” said d’Estais.
Merlo began working at Paribas in 1985 and held a number of key roles, including sales director for wealth management in France. Lecomte held sev-eral positions in the con-sulting field before joining Paribas’ Securities Services business in France, and became chief operating officer at BNP Paribas Wealth Management in September 2010.
This financial promotion is published by VAM Funds (26 Avenue de la Liberté L-1930 Luxembourg). For professional investors only. The funds are authorised by the Financial Services Authority (UK). This is not an offer to purchase shares, which may only be bought under the terms of the prospectus. The value of shares may go down as well as up. Changes in the rate of currency exchange may cause the value of the investment to go down or up. Past performance is no guarantee of future results.
For further information on VAM Funds please contact VAM Marketing on + 230 465 6860 or email us at [email protected]
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NEWS
Investec boosts Luxembourg range with new strategies
New Zealand’s public sector is ranked least corrupt in worldNew Zealand is viewed as having the world’s least corrupt public sector, according to the 2011 Corruption Perceptions Index published by Transparency International.
The index, which scored 183 countries and territories from zero (highly corrupt) to ten (very clean), award-ed the island a rating of 9.5. Scandinavian nations also fared well, with Denmark and Finland in joint-second place on 9.4, and Sweden ranked fourth on 9.3.
Singapore and Norway were the only other coun-tries to receive scores of more than nine. At the bottom of the table were North Korea and Somalia, both of which received rat-ings of just 1.0.
Transparency Inter-national, a Berlin-based “organisation leading the fight against corruption”, warned that ongoing civil unrest around the world reflects concerns from citi-zens that their leaders are neither transparent nor accountable enough.
Huguette Labelle, chair of Transparency Inter-national, said: “[In 2011] we have seen corruption on protestors’ banners be they rich or poor. Whether in a Europe hit by debt crisis or an Arab world starting a new political era, leaders must heed the demands for better government.”
The index, which was compiled with support from Ernst & Young, drew on assessments and busi-ness opinion surveys car-ried out by independent institutions. These includ-ed questions relating to the bribery of public officials, kickbacks in public pro-curement, embezzlement of public funds, and the strength and effectiveness of public sector anti-cor-ruption efforts.
BY SIMON DANAHER
International advisory company Globaleye has opened a UK office to act as a training and recruit-ment hub.
Jenny Owens, head of recruitment at the firm, said: “We have a clear man-date to build the recruit-ment function without diluting the proposition of Globaleye.
“This is great for our management team who are looking to build their oper-ations, and even better for potential candidates since we hold their hands throughout the entire recruitment process.”
Globaleye said the call centre will also provide a back-office service to its international wealth man-agers, with a team of busi-ness development manag-ers solely booking appoint-ments for advisers.
The company added it aims to increase the number of business devel-opment managers to more than 30 by the end of 2012.
Company chairman Tim Searle said: “We present a superb opportunity for those individuals who are looking for a solid partner to take them into some of the most exciting markets worldwide.”
BY WILL JACKSON
Investec Asset Management has expanded its Luxem-bourg-domiciled range by launching a global equity fund for its contrarian team, and an emerging market multi-asset portfolio for Philip Saunders and John Stopford, specialists in mul-ti-asset and fixed income investing, respectively.
Investec GSF Global Contrarian Equity, which mirrors the £45m UK-domiciled Investec Global Special Situations Fund, is co-managed by Alastair Mundy and Mark Wynne-Jones.
According to Investec, Mundy and Wynne-Jones
make decisions designed to “oppose the herd instinct that drives market move-ments”, thereby minimising volatility and correlation.
Their bottom-up invest-ment process avoids vul-nerability to long-term macro-trends or themes, and instead seeks to iden-
tify underperforming stocks with favourable risk/reward ratios.
Investec GSF Emerging Markets Multi-Asset, mean-while, uses flexible asset allocation. By varying its weightings to equities, local currency debt and hard cur-rency debt, the fund aims to provide exposure to emerging markets, but with lower volatility than an equity-only approach.
The multi-asset fund has a minimum investment limit of $3,000 and an annual management charge of 1.8%. GSF Global Contrarian Equity has the same mini-mum investment limit and an annual management charge of 1.5%.
BY RAY CLANCY
Expat wealth remains robust despite the tough global economic condi-tions and political unrest experienced in some regions last year, a study of hundreds of countries has found.
Even in countries where the economy is reported to be weak, expats report higher earnings than in their home country, accord-ing to the HSBC 2011 Expat Explorer survey.
Barclays Wealth has appointed Carol Chen to head its Greater China desk in Singapore. Chen took up the role last month, and is responsible for building and managing the team.
The Singapore-based Greater China desk, which was created in 2011, looks after the wealth manage-ment needs of high net worth and ultra-high net worth clients, offering
Some 37% of expats say the economic situation in their country has stayed the same, while 30% think it has worsened in the past year.
But this is more positive than the 2010 survey, which found that almost half of expats said that the economy in their current country had deteriorated.
Indeed, the survey shows that expats remain relatively robust to the wider turmoil, with only 14% of respondents who
believe the economic situa-tion in their country has deteriorated actively look-ing to return home, and 63% intending to stay in their current location.
Saudi Arabia tops the survey’s expat economic league table, followed by Egypt and Singapore.
Expats in these coun-tries work predominantly in the banking or financial sector, the survey shows, and they cited career pros-pects as one of the key reasons for moving.
Expats earning more despite tough times
Barclays bolsters its Greater China desk in Singapore
Globaleye adds to recruitment service with UK training hub
Mundy: ‘opposes herd instinct’
strategies in credit, deriva-tives, foreign exchange, portfolio management and trust structuring.
Chen also leads the team in delivering solutions in the areas of capital raising, mergers and acquisitions, and strategic risk manage-ment, leveraging the capa-bilities of Barclays Capital.
The company said it will continue to focus on Greater China and Taiwan as part of its overall key
Asia Pacific markets strate-gy in 2012, as it seeks to more than double its assets under management in the sub-region during the next three years.
“There is a compelling strategic rationale for establishing a Greater China team in Singapore to complement our estab-lished presence in Hong Kong,” said Pakorn Boonya-kurkul, the head of North Asia.
“We are committed to expanding the scope of offerings to better serve the needs of our clients, and this allows us to offer Greater China clients choices for doing business with a Hong-Kong based or Singapore-based wealth manager.”
Chen joined Barclays Wealth from UBS in Singapore, where she worked as managing direc-tor from 2007.
NEWS
Deutsche names Masud as chief officer for UAE regionBY RAY CLANCY
Deutsche Bank has appoint-ed strategic initiatives spe-cialist Nadeem Masud as its chief country officer for the United Arab Emirates.
Masud, the head of corporate and investment bank (CIB) coverage for the Middle East and North Africa (MENA), was due to take over as country chief and general manager of the Deutsche Bank AG Dubai (DIFC) branch at the start of this month, subject to regulatory approval.
The appointment is designed to build on the bank’s commitment to the region, said Ashok Aram, the chief executive officer of Deutsche Bank for MENA.
Masud has been with
Deutsche Bank for 14 years, initially joining its relative value group in 1997. From 2002 to 2004, he was the head of fund derivatives for global markets in London.
He moved to Dubai in 2004 as the local head of fixed income sales, before being appointed head of CIB coverage for MENA. In this role he focused on top-tier sovereigns, sover-
Abu Dhabi Bank receives licence to open in JerseyJersey has granted Abu Dhabi Commercial Bank (ADCB), the third-largest bank in the United Arab Emirates (UAE), a licence to operate on the island, through a managed bank arrangement with AIB Jersey.
ADCB, which is 58% owned by the Abu Dhabi Government via the Abu Dhabi Investment Council, will initially offer current accounts, deposit-taking products and term deposits to high net worth individu-als. Accounts will be avail-able in multiple currencies.
The announcement fol-lowed the signing of a memorandum of under-standing between the cen-tral bank of the UAE and the Jersey Financial Services Commission in Abu Dhabi.
The memorandum cre-ates a formal mechanism
which enables the regulato-ry authorities to co-operate on supervisory matters and exchange information.
Senator Alan Maclean, minister for economic development, States of Jersey, said the opening of a Jersey Finance office in Abu Dhabi increases the island’s commitment to the Gulf.
According to Geoff Cook, chief executive of Jersey Finance, he antici-pates greater business flows to Jersey from the region.
“The decision by ADCB to opt for Jersey as the location to estab-lish its offshore banking offering reflects well on Jersey’s reputation in the Gulf region, and will add appreciably to the poten-tial for increasing bank-ing business in the future” Cook said.
eign wealth funds and com-panies, for their financing, asset and liability manage-ment, and other strategic initiatives.
Masud takes over the country chief and gen-eral manager roles from Salman Al-Khalifa, who left Deutsche Bank at the end of 2011, to pursue oppor-tunities outside investment banking.
Al-Khalifa joined Deutsche Bank in 2008, and later became head of global markets for MENA. “Salman has been one of the architects of Deutsche Bank’s successful build-out in MENA,” said Aram. “His contribution was an impor-tant factor in Deutsche Bank becoming the lead-ing international investment bank in the region.”
Masud: ‘commitment to region’
For professional adviser use only.Canada Life Limited, registered in England no. 973271. Registered office Canada Life Place, Potters Bar, Hertfordshire EN6 5BA. Tel: 0845 7226232Fax: 01707 646088 www.canadalife.co.uk Canada Life International Limited, Canada Life House, Alexandra Road, Castletown, Isle of Man IM9 1TGTel: +44 (0) 1624 820200 Fax: +44 (0) 1624 820201 www.canadalifeint.com Registered in the Isle of Man no. 33178. Member of the Association ofInternational Life Offices. Canada Life group consists of Canada Life Limited, Canada Life Asset Management Limited (both authorised and regulated by theFinancial Services Authority), Canada Life International Limited and CLI Institutional Limited (Isle of Man registered companies authorised and regulatedby the Isle of Man Insurance and Pensions Authority). All promotional material produced is approved by Canada Life Limited.
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Our Technical Services Team are always there for you to answer anyqueries you may have. But they also focus on being proactive; takingthe initiative in unearthing new information and making helpfulsuggestions. Whether it’s the likely impact of upcoming legislation,or ideas that could create new opportunities, we’re always looking toadd value. Which helps you add even more value for your clients.
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JANUARY 2012 [www.international-adviser.com] INTERNATIONAL ADVISER 17
BANK NEWS
Julius Baer enters Chinese market with Shanghai office
BSI is granted banking licence in Hong Kong by the HKMABY HELEN BURGGRAF
BSI, the Lugano, Switzerland-based bank owned by Generali, has been granted a banking licence in Hong Kong by the Hong Kong Monetary Authority (HKMA).
The awarding of the licence to BSI, which the July 2011 issue of The Banker ranked as the ninth-largest bank in Switzerland in tier-one capital terms, brings to 152 the number of licensed banks in Hong Kong, the HKMA said.
Established in 1873, BSI is one of the oldest banks in Switzerland and special-ises in private wealth man-agement. Trieste, Italy-based Generali acquired it in 1998, which was also the year that it changed its name to BSI, from Banca della Svizzera Italiana.
In November, BSI Group named Stefano Coduri as its chief execu-tive, to succeed the retiring Alfredo Gysi.
Gysi, who has been with BSI since 1975, will become a member of BSI Group’s board of directors this month, subject to share-holder approval. He is also expected to take over as chairman of the BSI board in April, when the term of the current chairman, Giorgio Ghiringhelli, comes to an end.
BY WILL JACKSON
Standard Chartered Saadiq, the Islamic arm of Standard Chartered Bank, has launched Shariah-comp-liant services for individu-als and small and medium-sized enterprises (SMEs) in the United Arab Emirates (UAE).
The offering allows cus-tomers access to products and services through Standard Chartered’s 600-strong front-line staff and sales representatives, who are trained in Islamic banking.
According to Standard Chartered, it has the largest branch network of any international bank in the UAE, with 11 branches and three “electronic banking units”.
The product range for individuals includes: cur-rent and savings accounts; term deposits; credit cards; personal, auto and home finance; investment; and Takaful solutions. For SMEs, services include: trade finance, working capital facilities, cash management, and foreign exchange.
Sultan Ali Haider, gener-al manager, Islamic banking at Standard Chartered UAE, said: “We expect Islamic assets in the UAE to consti-tute 38%, and Islamic lia-bilities 27%, of the total consumer banking industry during 2012.”
BY SIMON DANAHER
Swiss private bank Julius Baer has opened a repre-sentative office in Shanghai, as it looks to expand into China.
The company has appointed Yan Sun as chief representative officer of the venture, which is to func-tion as a business liaison between the bank, local regulator and local compa-nies in China.
Julius Baer said it plans to conduct market research into the wealth manage-
ment industry in China, provide consultancy to the rest of the company, and promote the Julius Baer brand in the region, through the office.
The bank said Sun had been “instrumental” in get-ting the new office’s licence from the China Banking Regulatory Authority. He reports directly to Thomas Meier, chief executive Asia and member of the execu-tive board of Julius Baer.
Prior to joining the com-pany in January 2011, Sun was the chief representative
of Credit Suisse Investment Bank’s Shanghai represent-ative office.
Meier said Julius Baer had long considered China to be a “compelling market with an abundance of wealth management opportunities”.
“This move underscores our commitment to Asia, which is our second home market after our home base [of] Switzerland,” he added.
According to Julius Baer, it has the largest interna-tional presence of any Swiss private bank.
Standard Bank has appoint-ed Deon de Klerk to the newly-created role of head of international private cli-ents (IPC), following a restructuring of its personal and business banking international division.
De Klerk has held a number of senior positions with Standard Bank’s wealth management com-pany – Liberty Holdings, South Africa – since joining in 1997. In July 2010, he joined the private clients division of Standard Bank as a director.
Based in Jersey, de Klerk will oversee the company’s international private client operations located in the Isle of Man, Mauritius and London, as well as Jersey.
The IPC division pro-vides asset management, trust, banking and wealth management services to high net worth clients around the world.
Ian Gibson, global head of private clients at Standard Bank, said: “We are confident that Deon’s appointment will provide our IPC business with the
leadership and cohesion required to deliver on our significant ambition in this important client segment.
“Since joining us [in 2010], Deon has been instrumental in developing our global private clients strategy to drive this area of our business forward. We wish him well in this new and challenging role.”
Standard Bank, which claims to be Africa’s largest bank by assets, has 53,000 employees and is repre-sented in 30 countries around the world.
Its personal and busi-ness banking international division has expertise in offshore banking, institu-tional banking, fiduciary services and asset management.
Standard Bank names international head
Shariah service from Standard Chartered Bank unveiled in UAE
De Klerk: ‘instrumental’
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INTERNATIONAL ADVISER [www.international-adviser.com] JANUARY 201218
Threadneedle rolls out Lux- domiciled UK equities fund
Nikko AM cites volatility in delay to listing
BY WILL JACKSON
Threadneedle Investments has launched a UK Equities Fund in its Luxembourg-domiciled Sicav.
The portfolio uses the same conviction-driven process that Simon Brazier, the head of UK equities at Threadneedle, employs on the £1bn ($1.6bn) British-domiciled UK Fund he took over in April 2010 (see graph).
The Luxembourg-domiciled portfolio holds 50-90 stocks and aims to be broadly diversified, by market capitalisation and sector. Threadneedle describes the strategy as “index aware but stock unconstrained”, although individual position sizes will be no greater than 5%.
According to Brazier, the fund should appeal to UK offshore investors, in addi-tion to those based in Latin America, the Middle East and continental Europe.
The retail share class of Threadneedle UK Equities has a minimum investment
Wagstaff joins Henderson as global head of distribution
HSBC Global AM opens its frontier offering to retail market
BY GARY CORCORAN
Paul Feeney has taken on Phil Wagstaff’s responsibili-ties as chief executive of Skandia Investment Group, following the latter’s depar-ture after just two weeks in the role to Henderson Global Investors.
At the end of October last year, separate announcements were made that Wagstaff was to join Skandia Investment Group (SIG) as CEO, while Feeney was to take a simi-lar role within the asset management business at Old Mutual Long Term Savings (LTS), SIG’s parent company.
Feeney, who starts this month, will now take on both roles and bring together the businesses under Old Mutual LTS that include SIG and Old Mutual Investment Group South Africa.
He reports to Paul Hanratty, chief executive of Old Mutual LTS.
Wagstaff will join Henderson as global head of distribution, reporting directly to chief executive Andrew Formica.
Henderson now has three global heads of distri-bution, with Mark Skinner running the retail side of the business and Arno Kitts the institutional side.
They both report to David Jacob, chief invest-ment officer and manag-ing director of Henderson’s investment management business.
Wagstaff’s is a newly-created role that will see him lead the international distribution teams across retail, institutional and hedge funds, with respon-sibility for co-ordinating sales channels globally, in addition to ensuring that product strat-egy is aligned with the group strategy.
Nikko Asset Management has postponed its pro-posed floatation on the Tokyo Stock Exchange, owing to heightened market volatility.
The listing, which was due to take place last month, had been expected to be the second-largest initial public offering in Tokyo of 2011, but the firm announced that it had sus-pended the process.
“The company remains committed to the belief
HSBC Global Asset Management has unveiled a Luxembourg-domiciled frontier markets fund for retail investors.
The HSBC GIF Frontier Markets Fund, which is run by Andrea Nannini, invests in companies located or operating in such countries as Qatar, Nigeria, Pakistan and Romania.
The portfolio was creat-ed with the assets of HSBC New Frontiers, which was launched in February 2008 as a Luxembourg special investment fund because frontier markets were not Ucits compliant at that time.
According to HSBC, Nannini will run the new fund with the same objec-tive, against the same benchmark – the MSCI Frontier Markets Capped Index.
Countries in the index are typically at an earlier stage of economic, political and financial development, HSBC said, offering poten-tially higher growth rates and returns over the long term, but with a higher level of risk than “tradi-tional emerging market nations”.
HSBC GIF Frontier Markets, which is available for sale in more than 30 countries as part of the HSBC Global Investment Funds range, has a mini-mum investment level of $5,000 for retail investors. The fund has a 1.75% annual management charge.
Five-year performance of Threadneedle UK
-40
-20
% 0
20
40
40
0
0
00
’12’11’10’09’08’07Source: FE Analytics
IMA UK All Companies
Threadneedle UK
limit of £2,000 and a 1.5% annual management fee.
The fund has curren-cy-hedged euro, Swiss franc, Singapore dollar and US dollar share classes, although registration was last month pending in these regions.
Nannini: ‘the same objectives’
that, as a publicly-listed asset management com-pany, it can contribute to the development of the Asian asset management industry and help millions of Asian investors grow their wealth,” it said in a statement.
“However, as there is no need for the company to raise cash through an immediate listing, the com-pany has decided that it is appropriate to suspend the listing during this time of
market volatility. As such, the company will seek to resume its listing plans when market conditions are more stable.”
Nikko AM is seeking to expand its footprint in southeast Asia and acquired Singapore’s DBS Asset Management in September, allowing it to distribute its products through DBS’s regional network of offic-es. The DBS business was later rebranded Nikko Asset Management Asia.
The mutual fund universe in Europe has shrunk by 390 funds since the start of 2011, mainly owing to a significant increase in the number of product merg-ers, according to research by Lipper.
At the end of the third quarter of 2011, 35,017 funds were registered for sale in Europe, with Luxembourg continuing to dominate the market with
Lipper reports European fund universe squeezed by 390 funds 9,183 funds, and France next in line with 5,245 funds domiciled there.
Lipper said since the beginning of the year 2,383 funds had been created for sale in Europe, but during the same period 1,513 were closed and 1,260 merged.
In the third quarter there was a net decrease of 121 funds, which Dunny P Moonesawmy, head of Western Europe and
Middle East research, said was “mainly due to contin-ued rationalisation of fund families resulting from the Ucits IV directive rather than weaknesses in the new funds dynamic”.
The third quarter, which was a volatile period for stock markets, actually saw an increase of over 10% in the number of new funds launched, compared with the first quarter.
Fundamental market based experience is more important than ever....
So is protecting the downside when markets fall.
F U N D SInstitutional Marketing & Administration Services Prestige Asset Management Limited33 St. James’s Square, London, SW1Y 4JS, United KingdomT: +44 (0) 203 178 4055F: +44 (0) 203 004 9690E: [email protected] www.prestigefunds.comAuthorised and regulated by the Financial Services Authority (FSA)Member of the Alternative Investment Management Association (AIMA)Member of the Chartered Institute for Securities & Investment (CISI)
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NEWSLIFE NEWS
Old Mutual sells its Nordic Skandia operations for £2bnBY HELEN BURGGRAF
Old Mutual, the parent of Skandia International, is to sell its Nordic Skandia businesses to Skandia Liv for £2.1bn ($3.3bn), to cut its debt, with surplus capi-tal arising from the deal to be returned to sharehold-ers “in due course”.
The sale does not affect Skandia’s other operations, Old Mutual said.
The businesses being sold are Skandia’s long-term savings and bank-ing operations in Sweden, Denmark and Norway. These will retain the right to use the Skandia name in those territories only, according to a statement.
Old Mutual, which is listed in London and Johannesburg, as well
as certain African coun-tries’ exchanges, acquired Skandia AB in 2006 for £4bn.
Skandia Liv, a subsidiary of Old Mutual, will become a separate operation once the deal completes, Old Mutual said.
Julian Roberts, group chief executive of Old Mutual, said the sale of the Skandia operations was a
Aviva closes to business in the Middle East regionBY SIMON DANAHER
Aviva is to pull out of the Middle East, and has writ-ten to regional and interna-tional IFAs informing them of its decision to end its partnership with a Dubai-based insurer.
In a letter sent to IFAs on 30 Nov, 2011, the insurer said it would be withdrawing all products co-branded with National General Insurance (NGi) – its Dubai-based partner – and would no longer be active in the United Arab Emirate (UAE) market.
The letter explained that in November 2010, the Aviva Group announced a new strategy to focus on 12 core markets, and that the Middle East was not one of them.
While these core mar-kets were not named in the
letter, it is understood that there are eight in Europe – the UK, France, Spain, Italy, Poland, Turkey, Ireland, and Russia – in addition to North America, Canada, India and China.
Aviva said its decision to pull out of the Middle East will not affect any existing policyholders, but that IFAs should accept the letter, in accordance with its distribution agreement, as its 30-day written notice to close to new business for all existing Aviva NGi products.
The partnership with NGi was agreed in 2007, and marked the compa-ny’s entrance into the UAE market. According to the Aviva website, the deal was aimed at producing protec-tion, investment and sav-ings products for the local and UK expatriate markets.
“material step” in the exe-cution of the company’s restructuring programme, which involves reducing debt.
“The transaction will also enable us to reduce complexity within the group consistent with our stated strategy, and to focus more sharply on those parts of our long-term sav-ings business where the greatest opportunities are available,” he added.
Completion of the deal, which is conditional upon the approval of Old Mutual shareholders at an extraor-dinary general meeting, is expected to take place towards the end of the first quarter of 2012. The trans-action does not require the approval of Skandia Liv’s policyholders.
Roberts: ‘material step’
22
MD PROFILE JOHN VAN DER WIELEN
INTERNATIONAL ADVISER [www.international-adviser.com] JANUARY 2012
What is your background?I have over 25 years of international financial serv-ices experience, gained in executive roles across Europe, Asia and Australia, covering life and pensions, general insurance, wealth management and banking.
I joined Friends Life from ANZ Banking Corporation where I was managing director, wealth, based in Sydney, Australia. I was responsible for insur-ance, share trading, finan-cial planning and private banking.
I head the international division, reporting to the chief executive officer, Andy Briggs; and I am a member of the group exec-utive committee.
In this role I’m responsi-ble for all of the group’s international businesses. This includes Friends Provident International; fpb AG, our distribution partner; Lombard, the Luxembourg-based wealth and estate planning spe-cialist; and AmLife, our joint venture in Malaysia.
Before joining ANZ, I was the CEO of HBOS Financial Services, based in London.
I have an MBA from the University of Western Australia and am a Fellow of the Australian Institute of Company Directors. I have also completed stud-ies at London Business School, Oxford University and the Asian School of Management in Malaysia.
How would you describe your management style?I aim to be a visible leader. I am very candid in my opinions and believe in transparency. I’m very hands-on and inclusive, and I really enjoy spending time with customers, key business partners, stake-holders and colleagues at
The newly appointed head of the international operation at Friends Life Group discusses his objectives for the business. An early investor in the Middle East and Asia, the company has plans to grow and expand its offering in these emerging market regions
attracted you to the position?I believe in the focus, strat-egy and objectives that Friends Life Group has set for the international divi-sion. I enjoy the diversity that is offered from the international dimension, across multiple functions and geographies. All of these aspects offer a great opportunity for me person-ally and for the company.
From a personal per-spective I have worked in London before and I love the city. It’s a good loca-tion and this is a great job.
Before joining Friends Life, what were your perceptions of the company?At HBOS Financial Services, Friends Life’s international division – namely Friends Provident International, Lombard, fpb AG and AmLife – were my respect-ed competitors. I admired Friends Life’s evolving strategy from afar, and observed the business in Asia and the Middle East grow successfully.
What were your priorities on starting the job? My first priorities will always be to our customers and our people, and to provide further clarity and direction on the interna-tional strategy.
I intend to deliver on these two priorities by vis-iting all of our international locations regularly and by being very active in the development of our propo-
all levels of the organisa-tion. While I am a great believer in intuition, I use logic-based decision making and try to keep emotion to a minimum.
You joined Friends Life as managing director of its inter-national businesses in November 2011. What
Delivering a global vision
My first priorities will always be to our customers and our people, and to provide further clarity and direction on the international strategy”
“
23JANUARY 2012 [www.international-adviser.com] INTERNATIONAL ADVISER
profilesMD PROFILE JOHN VAN DER WIELEN
John Van Der Wielen joined Friends Life from ANZ Banking Corporation in Australia, and before this was the chief executive officer of HBOS Financial Services in London. As managing director of Friends Life’s international businesses, he is responsible for Friends Provident International, fpb AG (FPI’s German distribution partner), Lombard, and AmLife in Malaysia.
BIOGRAPHY
sitions, through regular liaison with our customers and key distribution partners.
What do you plan to achieve in your first 100 days?Complete a strategic review of all our international busi-nesses. To ensure our people structures and com-petencies match our strate-gy, to have met face-to-face with our major distributors, and to have visited all of our international locations.
Longer term, what are your objectives for the business?My objective for the busi-ness will be to review our strategy for long-term growth and profitability.
Friends Life was an early investor in the Middle East and Asia, and we are now gaining the benefits of the growth in these mar-kets. We intend to continue our growth and expansion plans in these regions.
Our ultimate objectives are to achieve critical scale in each individual country and deliver value to the group.
Friends Life has clients across the Middle East, Asia and Europe. What are the big-gest opportunities for expan-sion, both geographically and in terms of products?We were an early investor into these markets and the group has had an interna-tional presence for over 30 years.
We have taken our experience and expertise from the UK markets in protection, pensions and annuities, and established a presence in less mature markets in the Middle East and Asia.
The biggest opportunity for the international divi-sion is to expand on our investment in the emerging markets, and continue the
growth of the already suc-cessful life assurance, tax and estate planning solu-tions through Lombard.
In the UK, life and pen-sions companies operating overseas originally focused on expat business rather than the opportunity to become a prominent pro-vider in each local market.
Our business model is a mix of both local and expat business, supported by local staff with local lan-guage capabilities. For example, the staff who support our Middle East operation can speak over ten different languages.
In what ways do you expect the international life industry to change over the next five years?I believe that the interna-tional life industry will con-tinue to expand, and this has been forecast by many expert commentators.
A focus on commission disclosure, appropriate financial advice and inde-pendence between distrib-utors and manufacturers is already evident in Australia, the UK and the US.
This trend will extend into the Middle East and Asia. Over time, as an industry, we need to devel-op our products, processes and approach to cope with regulatory changes.
I also predict that e-commerce, direct and bancassurance sales will increase the pressure on the traditional IFA market.
The UK and European economic cycle is vastly different to that of Asia. I
believe strongly in eco-nomic cycles and I am confident that the European markets will recover and be back in a growth posi-tion over the next five years.
What are your likes and dis-likes about the cross-border life sector? I like the diversity and varying cultures that you get to experience when managing the cross-border life sector, the regulatory environment and the prod-ucts. There is never a dull moment and always plenty to learn.
I dislike the fact that coping with the different languages, regulations, tax rates, currencies and cul-tures is extremely complex and does increase costs unless these are well managed.
Who are your business heroes?I am a huge fan of Charles Thomas Munger, the vice-chairman of Berkshire Hathaway. He is the often forgotten partner of Warren Buffett. I admire him because he makes com-plex issues very simple, and that he is humble and does not need to be the front man to be successful.
Who has been the biggest influence on your career?The biggest influence on my career to date has been Donald Humphreys. He was managing partner of Ernst & Young in Western Australia, and founding
Friends Life was an early investor in the Middle East and Asia, and we are now gaining the benefits of the growth in these markets. We intend to continue our growth and expansion plans in these regions”
“chairman of St Andrew’s Insurance in Australia, an insurance and wealth com-pany that we set up togeth-er in 1998.
I learned much from working with him. He always taught me to run a small company like a big company, because if you don’t it will never be a big company.
Describe your ideal deputy.Someone who knows more than me, but doesn’t let anyone else know it.
What is the hardest business lesson you have learned?My biggest regret was that I did not take an equity stake in the company that I set up, as it was subse-quently sold for a substan-tial amount of money. I missed an opportunity there and it was a valuable but difficult lesson to learn.
Property funds in the UK; when I moved to London in 2007 most people were of the opin-ion that bricks and mortar do not drop in price.
Liquidity is key – the UK banks, property funds worldwide and many large businesses forgot that you need liquid cash to sur-vive, and watching the demise of the UK banks and being an employee of HBOS UK at that time, was a great example of this.
The life and general insurance companies had liquidity. However the UK banks did not manage liquidity appropriately.
What is the best piece of business advice you could offer someone?The best piece of business advice I could offer some-one is never, ever compro-mise your ethics or beliefs, and in my experience most free advice has been worth what I paid for it.
24
REGIONAL PROFILE SOUTH AMERICA
INTERNATIONAL ADVISER [www.international-adviser.com] JANUARY 2012
by 15.6% in 2010. According to the 2011
edition of the Merrill Lynch/Capgemini World Wealth Report, Brazil ranks 11th in the world in terms of the number of high net worth individuals who live there.
Bill Pingleton, manag-ing director of the Americas for Franklin Templeton, which has been distribut-ing its funds in the region since the mid-’90s, says Brazil is now the world’s eighth-largest fund market, though only the 11th-larg-est “if you exclude money-market funds”, a regional favourite.
l Plans to expand It is not surprising, there-fore, to find that a growing number of financial servic-es companies are consider-ing how best to tap into the market, while others, already there, are looking for how best to expand.
Among them is Geneva-based Vistra, the cross-bor-
der structuring specialist. Gerard van Spall, the Curaçao-based head of regional operations, says the company is “looking very seriously at enlarging our South American efforts”.
“As you may see if you look on our website, Vistra is just about everywhere in the world except for South America,” van Spall explains.
“We are not sure yet how we are going to do it [expand into South America], but we are study-ing it right now.”
Among the places van Spall says Vistra is consid-ering is Montevideo, Uruguay – which puts him in good company. Sometimes referred to as the Switzerland of South America, this relatively small country is a well-established launchpad for European and US compa-nies looking for a tax-effi-cient operational base (Panama and certain British islands in the Caribbean are also popular).
In addition to represent-ative offices of major US and European banks, and such asset managers as Man Group, Uruguay is also headquarters to two of the largest distributors of investments and savings products operating in South America – Royal Skandia products distribu-tor Aiva and FPI distributor SupraInvest.
l Regulatory climateWhat Uruguay is not, how-ever, is a hotbed of expatri-ates in search of help with their investments, those familiar with the country say.
“It has a good regulato-ry environment,” explains Gustavo Otero, business development manager for Investors Trust Assurance, who is a Uruguayan native and previously worked in the insurance industry there. Founded in 2002, Investors Trust is registered in the Cayman Islands and was conceived to market
BY HELEN BURGGRAF
When Goldman Sachs’s Jim O’Neill coined the ‘BRIC’ acronym in 2001, few observers saw, in Brazil, quite the diamond-in-the-rough that he did.
For one thing, its bat-tered economy was in such poor shape that within a year it required an IMF rescue of more than $30bn, a record amount at the time, which followed a forced devaluation of its currency in 1999. The global commodity boom that would soon see multi-national mining companies and oil industry giants stampeding over its bor-ders had yet to begin.
If people who had never been there before thought about Brazil at all in 2001, it was probably as the jungle-covered, native Indian-inhabited home of the world’s second-longest river. Or, perhaps, where a girl from Ipanema went walking in the ’60s.
l Brazilian growthHow times have changed. Brazil’s economy in the third quarter of 2011 may have contracted slightly as it reacted to the global eco-nomic turmoil, after post-ing growth of 7.5% the year before; but it never-theless is now the world’s eighth-largest in GDP terms. Brazil’s market capi-talisation more than dou-bled in 2009, and grew
Few predicted that Brazil’s economy would one day become the world’s eighth largest in GDP terms. Now that it has, financial services providers are taking a closer look at it – and at the rest of South America
Looking for El Dorado
John W. Fleming, founder and principal, Global Index International
Nearly everybody fails in this business [independent financial advising] in this part of the world. It is just too complex, for so many different reasons. We are an anomaly to still be here”
“
Key South American countries at a glanceArgentina Brazil Chile Colombia Peru Uruguay
Population 41m 203.4m 16.89m 45.9m 29.4m 3.3m(avg estimates)
GDP per capita $15,901 $11,273 $15,040 $9,593 $9,358 $14,339(PPP) IMF ’10
World Bank ’11 115 127 43 39 36 124‘ease of doing business’ rank
Sources: CIA World Factbook; World Bank; Transparency Int’l; IMF
25
REGIONAL PROFILE SOUTH AMERICA
JANUARY 2012 [www.international-adviser.com] INTERNATIONAL ADVISER
investment products simi-lar to those of the other major cross-border life companies, but tailored to the specialist needs – including languages – of emerging markets.
l The lure of RioRather than Uruguay, financial advisers keen to sell to expatriate clients in South America have, at least over the past decade, tended to focus on the major Brazilian cities.
Rio, for example, is home to the headquarters of Global Index International, an expat-focused firm which also has offices in São Paulo, as well as Mexico, Colombia, Peru and Argentina. Other firms
looking after expatriates in São Paulo include deVere and Globaleye.
Bucking this trend, with its South American base in Buenos Aires, is Swim WorldWide, which also has offices in Lugano and London.
Some financial services experts looking at South America, meanwhile, say they are intrigued most by Chile, which has the region’s second-highest GDP per capita.
That said, IFAs who come to South America expecting to just look after expatriate Brits, and per-haps a sprinkling of Commonwealth clients, may be in for a surprise, according to Globaleye Brazil vice-president Karl Westlund, who two years
ago took over the running of Globaleye’s Brazilian operation.
l Unbiased adviceAt Globaleye, Brazilians account for 90% of the company’s South American client base and expatriates for only 10%, Westlund notes.
Adds Investors Trust’s Otero: “The biggest poten-tial market in South America for any IFA, whether local or from abroad, is the emerging middle class. Countries like Brazil, Argentina, Chile and Peru are growing very fast, and a new middle class is being born.”
Like others, Otero points out that for histori-cal reasons, many South
Americans are instinctively wary about where they keep their money. This is one reason that certain South American nationali-ties are known to prefer offshore jurisdictions.
It is also why, Otero says, they “place a high value on unbiased advice, from people who are independent”.
“The family office con-cept is increasingly common, and they make use of private banks as platforms to access a range of different assets, but they also offer advice to the cli-ents,” Otero notes.
l Cultural diversityThe main reason more companies are not in South America yet is because it is a notoriously difficult market to get into and to remain in.
The first difficulty is that all of the countries are so different from one another. Many also are still afflicted with varying but significant levels of crime, drug traf-ficking, poverty, corrup-tion, bureaucracy and lack of infrastructure that have historically made the conti-nent a virtual no-go area for financial services com-panies. There are cultural and language complica-tions too.
“Nearly everybody fails in this business [independ-ent financial advising] in this part of the world,” says John W. Fleming, the founder and principal of Global Index International, whose company’s origins date back to 1996.
“It is just too complex, for so many different rea-sons. Anyone can come down here for two or three years, do things casually and get by under the radar, but no one lasts. We are an anomaly to still be here.”
Gustavo Otero, business development manager, Investors Trust Assurance
The biggest potential market in South America for any IFA, whether local or from abroad, is the emerging middle class. Countries like Brazil, Argentina, Chile and Peru are growing very fast, and a new middle class is being born
“
”
Providers of financial products and services are taking a closer look at South America, with an eye towards tapping into its growing wealth.
Political stability remains a problem in some South American countries, but others have moved on, helped by affluence brought about by the growth of their oil and mining industries.
IFAs in particular report finding South America challenging, owing to the range of cultures, languages and customs that exist, as well as the region’s complex regulatory environments, which some say can favour locals.
KEY POINTS
26 INTERNATIONAL ADVISER [www.international-adviser.com] JANUARY 2012
REGIONAL PROFILE SOUTH AMERICA
ADVERTORIAL SOVEREIGN TRUST
Finally, for European IFAs and product provid-ers, there is the fact that US companies are already operating in most parts of South America, and typi-cally have established US ways of doing things as the region’s default. However, some say the US influence is beginning to weaken.
l Tactical urgencyA recent Strategic Insight report suggests that now may well be the time for asset managers, at least, to consider making a move south of the border.
Daniel Enskat, the report’s author, notes that the Latin American asset management industry
could as much as triple in size by 2020, as the invest-ment habit spreads from its current base among Latin American HNWIs and insti-tutions, such as pension funds, into the region’s growing middle class.
As he sees it, Latin
America as a market for financial products is cur-rently “under the radar”, but unlikely to stay there much longer.
“Tactically speaking, if you are not in Latin America today, you may be too late,” he says of fund
managers in particular, citing examples of such companies as Fidelity and Franklin Templeton which are well-established there and finding the region profitable.
l Cross-border marketWhat is more, he notes, South American investors actively seek out cross-bor-der Ucits funds for the global exposure and diver-sification they don’t get from local domestic products.
Explains Enskat: “From an asset allocation per-spective, many institutions have no choice but to go outside of their own markets.”
For the exclusive use of IFAs, Sovereign Trust (Channel Islands) has introduced the International Financial Adviser Support or IFAS programme, a unique technical support programme to provide a one-stop shop for informa-tion on international pensions.
The technical expertise is provided by Isle of Man based PenTech, specialist pension technicians, which has signed an exclusive deal with Sovereign Trust.
Sovereign Trust, which already enjoys a sizeable share of the international pensions market, both QROPS and QNUPS, is part of an international group that provides financial serv-
ices but is independent of any bank, law firm or IFA group.
l Fast responseThe PenTech designed IFAS programme is a unique web-based service that provides IFAs with access to live data and fast responses to queries about existing UK or internation-al pensions schemes for the benefit of their clients. To access the service, IFAs simply need to register and create their own profile.
Once approved, IFAs are able to log on to a secure, confidential service portal through which they can ask questions and track and review all of their cases.
Each request is handled by experienced and quali-fied technicians, and all correspondence is recorded and can be revisited at any time. The comprehensive and unique service also includes provision of basic critical yield reports and, if required, the production of an all-important independ-ent Pension Transfer Report (TVAS).
l Total supportSovereign Trust’s managing director Rob Shipman said: “UK and international pen-sions are increasingly com-plex due to ever changing legislation. The Sovereign-sponsored IFAS pro-gramme is a fantastic
resource for IFAs wanting to give the best advice to their clients.”
Director of PenTech Peter Davis added: “The service has been far more successful than we could have ever anticipated. We are continually updating it as our clients’ needs evolve. It is completely live and offers total technical support for IFAs.”
Contact Sovereign Trust for more details of how to access this unique facility.
Enquiries to: Rob Shipman, Sovereign Trust (Channel Islands)Email: [email protected]: +44 (0)1481 729965We b : w w w . S o v e r e i g n Group.com
A one-stop resourceSovereign Trust has introduced the exclusive IFAS programme which offers comprehensive web-based information on international pensions
The emergence of a new middle class may be the main South American wealth story, but the number of seriously wealthy individuals there has also been growing.
According to the latest Merrill Lynch/Capgemini research, the number of Latin Americans with investable assets of more than $1m grew by 6.2% in 2010 – while the total wealth such individuals held grew by more than 9%.
Perhaps most importantly for those looking to market financial products and services, though, is the fact that as a region, Latin America in 2010 had the highest percentage of ultra-HNWIs out of the total high net worth population. UHNWIs accounted for 2.4% of the region’s total HNWIs, compared with a global average of just 0.9%, Merrill Lynch/Capgemini found.
LATIN AMERICAN HNWIS
UK and inter-national pensions are increasingly complex due to ever changing legislation. The Sovereign-sponsored IFAS programme is a fantastic resource for IFAs wanting to give the best advice to their clients
“
”Rob Shipman, managing director, Sovereign Trust
Daniel Enskat, senior managing director, Strategic Insight
Tactically speaking, if you are not in Latin America today, you may be too late
“
”
28
ADVERTORIAL INVESTORS TRUST
INTERNATIONAL ADVISER [www.international-adviser.com] JANUARY 2012
Investors Trust Assurance SPC (ITA) is an interna-tional insurance company which provides unit-linked investment products, tai-lored to international investors around the world, with a focus on emerging markets.
ITA is licensed and regu-lated by the Cayman Islands Monetary Authority and is rated B++ (Secure) by AM Best Company, allowing it to consolidate its interna-tional and institutional cred-ibility, providing its clients a higher level of trust.
l Leadership positionSince its launch in 2002, ITA has gained a leader-ship position in the inter-national insurance markets, reaching a solid presence in over 30 countries, offer-ing attractive tax-efficient investment solutions with a transparent fee structure, first class multi-language customer service, and a state-of-the-art internet platform. The company is also a member of the Association of International Life Offices (AILO).
Investors Trust’s open architecture platform incor-porates some of the world’s top asset managers, pro-viding a wide range of opportunities to its policy-holders through the access to global financial markets.
The product line-up includes medium-to-long-term investment plans, from lump sum to annui-ties that range from five to 25 years, designed to suit various income levels and financial planning needs.
l Product research Principal protected prod-ucts connected to the S&P 500 Index are also availa-ble in the options of lump sum or 15-year regular contributions, and low risk investment with steady income, such as the Fixed Income products, com-plete the product portfolio.
The continuous devo-tion to researching and developing innovative investment-type insurance solutions, with the objective to provide the most effi-cient investment products, is one of the company’s strongest features. Currently, Investors Trust is developing a new Fixed Income product based on regular contributions, as well as an innovative and simplified portfolio bond, which will offer a whole new range of opportunities for International Financial Advisers (IFAs) and investors.
Ian Phillips, the compa-ny’s vice-president, says: “ITA is always prioritising
We are constantly innovating and invest-ing in technology, giving clients the capabilities to go online to manage their investment-linked insurance products, including the ability to change their underlying allocations instantly”
“
Committed to helping your business succeed
the offer of high quality and cost-efficient invest-ment solutions, in order to provide emerging market investors with the ability to plan for a happy and com-fortable retirement or the future education of their children.”
In addition to staying committed to emerging markets, the company’s strategy is to expand distri-
bution to new markets in Asia, as well as the Middle East and Africa, which are known to be regions that have great potential for the industry, but scarce quality offerings.
l Global reachWith its headquarters in the Cayman Islands, well-established service offices
With a presence in more than 30 countries, Investors Trust offers tax-efficient investment solutions through a sophisticated internet platform
Ian Phillips, vice-president, Investors Trust
ADVERTORIAL INVESTORS TRUST
29JANUARY 2012 [www.international-adviser.com] INTERNATIONAL ADVISER
in Montevideo and Hong Kong, and the latest addi-tion of a branch office in Kuala Lumpur, ITA has full capabilities to service poli-cyholders and IFAs around the world, using local lan-guage customer support to ensure that clients fully understand their financial choices.
ITA is constantly inno-vating and investing in technology to offer a con-venient, multi-language and user-friendly online platform, where not only policyholders, but also IFAs can access and manage their portfolios anywhere, at any time.
l Online platformThe company provides a sophisticated online plat-form for submission of new business. The plat-form was created to
streamline the process of obtaining an investment plan, meeting the demands of our current fast-paced world.
With the assistance of their IFAs, the platform allows prospective clients to apply for an Investors Trust product of their choice, through a very simple, fast and smart application process. IFAs can save a lot of their valu-able time by utilising the electronic application plat-form, since it incorporates all the steps from the selec-tion of the product, to the payment of the contribu-tion and even capability to select the method of deliv-ery of the policy docu-ments. Applicants can plan for their futures and acquire the product in the most convenient way, with the confidence that the entire process is private
and highly secure.Clients and IFAs of
Investors Trust have the privilege of accessing Morningstar Portfolio X-Ray, a powerful tool that illustrates how a particular investment or group of investments can drive the performance of a portfolio.
l IFA benefitsThis tool is located in each client’s private account access page and allows them to view the aggregate statistics for a set of chosen investments, including asset allocation, regional and sector exposure, investment style, top holdings, and performance. Furthermore, IFAs have the ability to create reports based on this tool, to enhance their cus-tomer service.
This unique, private and secure online platform pro-vides IFAs with:
A complete resource centre, including sales and plan maintenance materials.A very effective elec-tronic platform for busi-ness submission.Detailed daily commis-sion reports as well as weekly commission statements.Full access to clients’ policy information.Downloadable billing notices and plan holder annual statements.Capability to generate electronic illustrations for prospective clients, without the need for separate software, just an internet connection.Variety of management reports and administra-tive tools. Monthly fund perform-ance reports and fact sheets.Access to the Morning-star Portfolio X-Ray tool within clients’ policies.
In addition to these fea-tures, all IFAs working with Investors Trust have a direct agreement with the company and can receive commission payments on a weekly basis, directly to their bank accounts.
l Secure featuresThe company also provides policyholders with a number of useful features under its private and secure online access.
This access allows poli-cyholders to:
Monitor their investment portfolio.Track daily pricing for all funds. Download annual statements.
Make online payments.Analyse their portfolio with the Morningstar Portfolio X-Ray tool.Trade funds through a web-based trading platform.Obtain fund fact sheets and monthly fund per-formance reports.Submit general plan serv-ice requests.“We are constantly inno-
vating and investing in technology, giving clients the capabilities to go online to manage their investment-linked insurance products, including the ability to change their underlying allocations instantly.
“We are a company in the international financial sector that allows clients to make such changes online, for which our clients have a greater comfort level in knowing that they are in control of their financial decisions and can access their plans at any time,” adds Ian Phillips.
For further information please contact [email protected], or visit www.investors-trust.com.
Designed especially for international investors.
Open architecture platform.
Wide range of investment products.
Multi-language support.
State-of-the-art internet platform.
Products that are more cost effective for clients.
KEY POINTS
30
INTERMEDIARY PROFILE LONDON & CAPITAL
INTERNATIONAL ADVISER [www.international-adviser.com] JANUARY 2012
BY CHERRY REYNARD
Preservation of capital and generating a steady income have not always been the fashionable investment ambitions they are today. But London & Capital founders Daniel Freedman and Richard Leigh recog-nised from inception that their clients prioritised stay-ing rich over getting rich, and designed their invest-ment proposition accord-ingly. Their approach has since found resonance in the various global markets in which the group has established a presence, and has been readily trans-lated to different specialist areas. The pair retain ambi-tions to extend it further.
l Tax planningTony McLoughlin, London & Capital’s investment director, says: “Clients are seeking to preserve and enhance their wealth, rather than any kind of ‘get-
rich-quick’ scheme. They are not looking to gamble. We look at how we can manage global strategy for investors, focusing on risk and return. We analyse and quantify potential risk for a certain target return.”
The basic model is unchanged from market to market and the group constructs multi-asset port-folios, looking beyond just equities and bonds to achieve those goals.
It then creates tax plan-ning strategies on top of this investment engine. Freedman believes that the tax consequences of invest-ing are often neglected and can be just as important as selecting the right invest-ment strategy. London & Capital has made a point of building up specialist expertise in certain areas, such as US citizens.
The group’s main areas of business have been South Africa, Europe and the UK, but it recently opened an office in Hong
Kong. The US and Canada have also been important, particularly the offshore US market. The company brief-ly opened a sales office in the US, before deciding that it could service its US client base from London.
l Tackling US taxLondon & Capital’s cli-ents are largely high net worth investors and pri-vate families with between £2m ($3.1m) and £50m in investable assets.
McLoughlin adds: “We have some with over a billion and others with a few hundred thousand, but most have been with us a long time and have been very loyal.”
The company itself is comprised of a global team of 90 people working from three locations (London, Hong Kong and the Isle of Man) and managing $3.2bn in assets.
Across the different regions, revenue is gen-
erated by taking a per-centage of assets under management. McLoughlin says: “We have to manage the relationship with our clients successfully and deliver on our promises, because otherwise clients would not stay. Our struc-ture means that we are aligned with our clients. We want the same steady consistent growth that they do, with no surprises.”
Freedman and Leigh learned their trade at Allied Dunbar before start-ing London & Capital in 1986. They worked closely with professional introduc-ers, such as lawyers and accountants, to build spe-cialist investment portfolios for their clients. This model is largely unchanged, and at least 85% of the company’s clients come through professional refer-rals – lawyers, accountants, trustees and other wealth managers. The majority of these relationships are long-established and it has
We have to manage the relationship with our clients successfully and deliver on our promises, because otherwise clients would not stay. Our structure means that we are aligned with our clients. We want the same steady consistent growth that they do, with no surprises
“
”Tony McLoughlin, investment director, London & Capital
Defending the nest egg
London & Capital targets a client base more interested in staying rich than getting rich, and has turned the complexity of financial planning into a virtue through its expertise in areas such as US tax compliance
31
INTERMEDIARY PROFILE LONDON & CAPITAL
JANUARY 2012 [www.international-adviser.com] INTERNATIONAL ADVISER
London & Capital focuses on wealth preservation for its high net worth client base and takes a multi-asset approach to investing, analysing and quantifying potential risk for a certain target return.
The company’s main areas of business have been South Africa, Europe and the UK, but it recently opened a Hong Kong office. The offshore US market is also important, and the group services its US client base from London.
Areas of specialisation include wealth management for professional sportspeople. The company intends to target other niche segments in future, including divorcees and beneficiaries of personal injury claims.
KEY POINTS
advice on how those port-folios are going to be man-aged, and Freedman says that London & Capital is in a position to service this market effectively.
The third area of expan-sion is in personal injury claims. Freedman adds: “Where large claims are awarded, a receiver has to be appointed to look after the beneficiaries and the money. It is a specialist niche and we have lots of experience here as well.” In common with divorcees or sportspeople, an initial lump sum has to be man-aged to last a lifetime, and possibly to pay medical care costs as well.
l Clear strategyFreedman says the group is well-placed for what-ever eurozone politicians or global regulators can throw its way: “There is lots of market turmoil. People need a clear strat-egy and a way to manage money. We are in the stay-rich rather than get-rich market, and have a clear way to manage wealth. The Retail Distribution Review and other similar legislation has brought a huge amount of confusion into the market, in terms of who can advise clients on what.
“We are there for those people who are looking for advice, rather than looking for options. There is also significant confusion about tax products.”
London & Capital has suddenly found that its investment style is fash-ionable. It may have been doing it for 25 years, but the market has come round to its way of thinking. The company will be hoping that it can find the same resonance among its new target clients.
The Retail Distribution Review and other similar legislation has brought a huge amount of confusion into the market. We are there for those people who are looking for advice, rather than looking for options
“
”
a network of over 100 con-tacts around the world.
The group has made a virtue of the complexity of some areas of finan-cial planning. For example, most recently, its expertise in dealing with US clients has been in high demand.
The tax and information reporting requirements that have come out of the Hire Act, and then the Foreign Account Tax Compliance Act (FATCA), are likely to have a major impact on financial institutions glo-bally. Several wealth man-agers are simply exiting the market, unable to take the regulatory hit from serving US clients. This is even true of some fund manage-ment groups, which are now seeking to back away from high net worth US clients because of the tax compliance burden.
l FATCA complexity McLoughlin says: “We are now one of the largest independent non-US firms managing assets in that space. There will be a sig-nificant fall-out from the UK/US tax legislation and the changes to the domi-cile rules. We have seen an immediate impact in the number of referrals – even from those we would consider competitors, such as wealth managers, pri-vate banks, IFAs or private client stock brokers.”
He points out that many people are extremely nerv-ous about handling US cli-ents. Equally, they may be prevented from looking after them by regulation, or their professional indemni-ty insurance may not cover them to deal with US cli-ents after the legislation takes effect.
London & Capital has put compliant solutions in place for US citizens,
or others who may fall into this legislation, such as those who have a holi-day home in the US, or hold a Green Card. In February, it launched five US tax-compliant model portfolios. These invest in US-compliant assets and are designed for US citizens and Green Card holders living outside the US. McLoughlin believes this offering is likely to see rising demand as the deadline for FATCA moves closer.
l Captive insuranceThe group has built other areas of speciality, both in terms of client type and expertise. For example, one of its most successful areas has been the cap-tive insurance market. It is the sole manager for the Caribbean Catastrophe Risk Insurance Facility, a fund for governments in the region which aims to limit the financial impact of hurricanes and earth-quakes, by quickly pro-viding financial liquidity. Again, the investment prin-ciples remain the same, within a different tax and regulatory framework.
Another specialisation can be seen in the compa-ny’s sports wealth manage-ment division. McLoughlin
says understanding cross-border investment plan-ning and strategy is par-ticularly important for professional sportspeople, who are likely to spend some parts of their career abroad. Also, sporting careers can be short and any wealth generated has to last a lifetime, so it suits London & Capital’s invest-ment approach.
At the moment, the group focuses on foot-ballers, particularly those in the upper divisions. In 1988, it was appointed as an official representa-tive to footballers by the Professional Footballers Association in England and Scotland, so has a lengthy track record in this type of financial planning.
l New client groupsThe company is build-ing on this expertise to target three further client groups. First, it is look-ing to expand its pres-ence in the divorce market. Freedman says: “Lots of people are now getting large sums of money in divorce settlements and do not know what to do with it. They need this money to provide an income in a world of zero interest rates. Also, divorcees are getting younger. They may have received a £5m lump sum and need to generate an income to look after their children for life. We believe we can do that.”
The second area is immigration. As it stands, the British Government has three types of investor visa: £1m, £5m and £10m. These investments must go into UK securities – either gilts or stocks. Gilts are paying low interest rates, so increasingly investors want to go into dividend-paying stocks. They need
Founded: 1986
Assets under advice: $3.2bn
Offices: UK, Hong Kong, Isle of Man
Regulated by: FSA, IPA, SEC and SFC
Website: www.londonandcapital.com
Partners: Daniel Freedman, Richard Leigh, William Dalziel, Ian Tait, Sir David Michels, Pau Morilla-Giner
FACT BOX
Daniel Freedman, managing director, London & Capital
32
EVENT ROUND-UP GULF EXPERT INVESTOR FORUM
INTERNATIONAL ADVISER [www.international-adviser.com] JANUARY 2012
More than 180 delegates attended the International Adviser Gulf Expert Investor Forum in Dubai at the end of November. The event brought togeth-er investment experts from around the world, to tackle the hottest topics in macroeconomics, asset allocation and portfolio construction.
The day consisted of presentations, breakout seminars, one-on-one question and answer ses-sions, and roundtable dis-cussions. Delegates were also asked to complete a survey, the results of which can be seen in the sidebars of these pages, alongside summaries of the main speeches.
Chris Palmer, director of global emerging markets, Henderson Global InvestorsLatin America: Moving onto the main stage Latin America continues to move from strength to strength, after nearly three decades of economic and political reform. Palmer considered the region’s remarkable growth over the past 20 years, his outlook and how investors might
invest in companies that are best positioned to benefit from the growing demand for global com-modities, and how this is achieved in the BGF World Gold, World Energy, New Energy and World Agriculture funds.
Smith, a member of the fundamental equity divi-sion of BlackRock’s port-folio management group, moved to his role in 2006. His service with the company dates to 2005, including his time with Merrill Lynch Investment Managers, which merged with BlackRock in 2006.
Assessing the big picture
exploit the opportunities available.
In a seminar session, Palmer identified drivers for Latin America’s success; the emergent middle class and the strengthening of insti-tutions. He also explained his research process, which analyses industries and business franchises to deliv-er proprietary forecasts and valuations.
Palmer joined Henderson in 2011, prior to which he was head of global emerg-ing markets at Gartmore, responsible for the strategy and management of the company’s range of emerg-ing market funds.
Malcolm Smith, director, natural resources equity team, BlackRockUnderstanding the natural resources marketSmith provided an insight into the gold, energy, new energy, mining and agri-culture markets, and the implications of constrained supply, coupled with the growing demand that makes for a compelling investment opportunity.
He later explained how the BlackRock natural resources team seeks to
The International Adviser Gulf Expert Investor Forum in Dubai brought together industry experts to discuss investment topics as diverse as Latin America, natural resources funds and the implications of forthcoming US tax legislation
Rob Lay, head of distribution partners, Europe and Middle East, managing director, UBS Global Asset ManagementAccessing consumption trends in AsiaAsian/emerging markets are expected to continue to outpace developed
Global emerging markets – over the next 12 months do you expect to:
Is the US still the most important economic and investment force in the world?
Increase your weighting
Decrease your weighting
Keep it the same/uncertainuncerttaintain
57%40%
3%
Yes
No, theirglory daysare over
Yes, but only for the nextcouple ofdecades
20%
52%
28%
33JANUARY 2012 [www.international-adviser.com] INTERNATIONAL ADVISER
EVENT ROUND-UP GULF EXPERT INVESTOR FORUM
markets, but investors are increasingly looking for more diverse investment opportunities in the region. Asian consumption in par-ticular has been growing in popularity. Lay consid-ered why the region is so attractive, and whether it is sustainable if the devel-oped world goes into deep recession.
During a seminar, Lay explained how, led by a locally-based team, the UBS Asian Consumption Fund invests in Asian-based companies that it views as being increasingly sought after – not only by a young population but also a fast-growing middle class.
Neil Chadwick, technical manager, Royal London 360˚Important developments in US tax legislation and an update on the UK’s residency rulesChadwick gave an over-view of the pending US Foreign Account Tax Compliance Act, what it means for non-US struc-tures and how it will impact advisers, their cli-ents and the organisations they deal with. He also looked at the UK rules for determining residence and domicile for tax purposes.
Later, he discussed how protection, regular and single premium products can mitigate future UK tax liabilities for the returning expat, and also covered the use of appropriate trust structures.
Chadwick is a director of the Society of Trustee
and Estate Practitioners and has been involved in the offshore insurance industry for over 15 years.
Paul Duncombe, senior investment solutions manager, Schroders Dynamic diversification and risk premia investingThe 2008 financial crisis has highlighted the limi-tations of diversifying by asset classes and passive asset allocation. The events of the past few years have emphasised that a more granular approach to diversification is required, coupled with the need for active asset allocation. Duncombe explored the concepts of dynamic diver-sification and risk premia based investing.
In a seminar entitled ‘Managing portfolios using a risk premia approach’, he explained how Schroders uses this strategy to manage its multi-asset products.
Duncombe joined Schroders in February 2007. He previously worked for State Street Global Advisors, from 1995 to 2006, first as global head of currency manage-ment and then as manag-ing director of the London office.
From 1989 to 1994, he worked for PanAgora Asset Management as a senior investment manag-er, where he jointly headed the global fixed income and currency team. Before this he was an invest-ment manager at Posthorn Global Asset Management.
Fred Sweeney, director, global consultant relations, and vice-president, Loomis, Sayles & CompanyGlobal credit: Opportunities and risksSweeney provided a review of global credit markets, specifically in the spread sectors, including global corporate, global high yield, and emerging. He also looked into rela-tive valuations, given the volatile macroeconomic environment.
He then explored the opportunities and risks in employing a broad/flexible approach to global fixed income. He examined port-folio structure in a total return programme, and gave examples of relative value opportunity.
Sweeney is responsible for developing and main-taining relationships with global institutional con-sultants for Loomis, Sayles & Co.
Simona Paravani, global CIO multi-asset and wealth, HSBC Global Asset ManagementHow to build portfolios for a low-return, high-volatility worldInvestors are faced with
major challenges, from a persistent regime of height-ened volatility to low pro-spective returns. Paravani focused on the tools avail-able to investors to mini-mise volatility and enhance returns, by looking at the art and science of diver-sification and active asset allocation.
In addition to lead-ing the investment effort to provide wealth solu-tions to HSBC clients globally, including the $8.5bn HSBC Portfolios – World Selection, Paravani oversees the multi-asset team in Hong Kong. She joined HSBC Global Asset Management in 2004.
Simon Williams, MENA chief economist, HSBC Bank Middle EastUnfinished businessThe political transition the Middle East embarked on last year is far from over and, even without the global slowdown, would pose a threat to regional growth and stability.
Williams explained why there are good reasons to expect the region will cope better with the 2011 slow-down than the 2008 slump, but even for the region’s oil producers, challenges lie ahead.
For those without the luxury of commod-ity wealth, the outlook is much tougher.
Williams joined HSBC in 2006 and is based in Dubai. He has more than 15 years’ experience as a Middle East analyst.
Developed market government bonds – over the next 12 months do you expect to:
Emerging market government bonds – over the next 12 months do you expect to:
Are you a:
Increase your weighting
Decrease your weighting
Keep it the same/uncertain
20%
68%
12%
Increase your weighting
Decrease your weighting
Keep it the same/uncertain
47%
33%
20%
BullBear
Undecided/neither
42%
28%
30%
34
TECHNICAL BRIEFING RETIREMENT INCOME
INTERNATIONAL ADVISER [www.international-adviser.com] JANUARY 2012
large emerging economies of India and China are in particularly poor shape. China faces a demographic time-bomb more severe than any developed coun-try, caused by its one-child policy. India has a much younger population, so its demographic problems will inevitably be deferred.
In the United Arab Emirates, only nationals are eligible for state bene-fits and these do not stretch to expatriate employees. In Hong Kong, the normal retirement age is 65. The social security system pro-vides benefits to the elder-ly, but these are means-tested.
l Employer schemesAt the same time as state pensions come under increasing pressure to fund retirement provision, occu-pational schemes face simi-lar difficulties. These schemes can be either defined contribution (DC) or defined benefit (DB) arrangements.
With a DC scheme, the risk for providing an ade-quate pension rests on the accumulated savings built up at retirement. With a DB scheme, the investment risk is taken by the employ-er and the member is guar-anteed a retirement income based on pay and length of service.
Over the years there has been a marked shift from DB to DC schemes. Many
continuing major reforms in most countries over the coming years. For exam-ple, in the UK, the state pension age will be raised to 66 from October 2020, and pension experts warn that the latest life expect-ancy calculations could pave the way for it to hit 68 as early as 2027.
l Emerging marketsLooking further afield, the
and become established globally.
State pensions use the tax taken from the income of younger working gen-erations to fund older gen-erations. As global birth rates continue to drop, people live for longer and fewer workers are left to support an increasing number of retirees, pres-sures on global state pen-sion systems will increase.
Inevitably we will see
Over the past century, the concept of retirement changed from being per-ceived as a luxury to an expected right. During the same period, however, life expectancy significantly increased. According to a research paper prepared for the House of Commons, in 1901, males were expected to live for 45 years and females for 49. Current UK estimates from the Office for National Statistics for male life expectancy at birth are 78.1 years, and 82.1 for women.
Unfortunately, as people have come to expect longer lives, our pension systems have not been adjusted accordingly. While rising life expectan-cies are good news, they place increasing emphasis on individuals to fund their own retirement. A survey conducted by Allianz asked the question: “Which do you fear the most: outliv-ing your money in retire-ment or death?” Surprisingly, 61% said they were more scared of out-living their assets than they were of dying.
l The Bismarck sinksModern pension systems can trace their roots back to the late 19th century, when Chancellor Otto von Bismarck introduced one of the first nationwide social security systems in Germany. Since then, pen-sions have spread
Luanne Ahearne, technical consultant, Royal London 360°
People now view retirement as a right, rather than a privilege. However, falling birth rates and rising life expectancies around the world are putting pressure on state pension systems.
Investors should look beyond traditional schemes, and towards such products as offshore regular premium savings policies, which aim to generate capital growth over the medium to long term.
These plans offer a wide selection of asset classes, risk profiles, currency denominations and geographical sectors, and remove the need for individuals to time their investments.
KEY POINTS
Saving for a rainy dayLife expectancy continues to increase, while existing pension systems have failed to keep pace with a changing world. State pensions and occupational schemes may not be sufficient but there are other options
UK life expectancies
0
20
40
60
80
100
Year
s
FemalesMalesSource: Office for National Statistics
Fears of US investors
Outliving theirmoney 61%
Death 39%
Source: Allianz
35JANUARY 2012 [www.international-adviser.com] INTERNATIONAL ADVISER
technical
UK DB schemes are heav-ily in deficit, and compa-nies are coming under pressure to address the funding gap. It was recent-ly reported that British businesses face a corporate pensions deficit of £295bn ($463bn).
l Regular premiumsIt is becoming obvious that we must all look beyond state and occupational pension schemes, to ensure we have sufficient retirement income in our old age.
One of the ways this can be done is to invest in a regular premium savings policy issued by an off-shore provider. These plans are generally availa-ble for UK expatriates or foreign nationals, and are designed to generate capi-tal growth over the medium to long term.
Because the policies are issued offshore, there is no liability to tax on the income or capital gains of the various funds. Therefore, apart from any withholding tax that may be deducted at source on income arising from certain investments, the underlying fund grows without any further deductions of tax.
Regular savings con-tracts also encourage the
discipline of commitment. Premiums can start off small and be increased over time, making the plans accessible and flexible.
For example, it is some-times possible to change the frequency of the pay-ments and to take a break from paying premiums should circumstances change. Lump sum top-ups can normally be accepted, perfect for boosting the retirement pot should an individual receive an unex-pected windfall.
l Risk profilesIn an industry that is becoming increasingly competitive, there may also be incentives in return for larger monthly premi-ums or extended payment periods.
It is important that any funds selected match the investor’s chosen risk pro-file. Most offshore regular premium policies allow for a broad choice of asset classes, risk profiles, cur-rency denominations and geographical sectors, from a wide selection of fund houses. They may even allow investment in Shariah-compliant and socially conscious funds.
Furthermore, when an individual is unsure about
Many offshore jurisdictions now offer the best investor protection schemes in the world, providing all policyholders with compensation of up to 90% of their investment value, in the unlikely event that the offshore provider becomes insolvent
“
”where they should be investing, or does not have the time to continually monitor investment mar-kets, it is usually possible to invest in a range of man-aged funds run by profes-sional fund managers.
A real advantage to saving monthly is that an individual does not have to concern themselves with market timing or identify-ing the best moment to commit. If money is saved on a regular basis, when the share price is down, the individual’s policy buys more units. An individual accumulates more within the plan when markets are low and then, as a sus-tained recovery takes place, all of the investment units that have accrued go up in value. This is called ‘pound cost averaging’.
l Expatriate benefitsAn important benefit, which will relate to UK expatriates only, is that upon relocation to the UK, it is possible to benefit from ‘time apportionment relief’. This is a relief which reduces the proportion of the gain subject to income tax by the amount of time spent outside of the UK. So, for example, if a client had owned the policy for ten years but lived abroad for five of those years, then
only half of the gain would be taxable.
The international finan-cial crisis of 2008 and 2009 highlighted the need for a compensation fund for policyholders. Many off-shore jurisdictions now offer the best investor pro-tection schemes in the world, providing all policy-holders with compensation of up to 90% of their investment value, in the unlikely event that the off-shore provider becomes insolvent.
l The wake-up callUnfortunately, over the past couple of decades, western civilisation has not been adept at saving. While many workers may have planned to retire between the ages of 60 and 65, the truth is that they will either have to work for longer or save much harder during their working lives.
More than at any other time in history, there is an urgent need for all of us to accept more responsibility for the provision of our own financial security. As the well-known author on time management, Alan Lakein, once said: “Failing to plan is planning to fail’’.
The cost of inaction and procrastination is simply too high to ignore.
UK life expectancies since 1900
40
60
80
100
Year
s
00
0
0
'202000'80'60'40'201900Source: Office for National Statistics
Female
Male
Social security systems provided through government taxes: This can either be on a funded basis (where funds are ring-fenced to pay out future benefits) or on a pay-as-you-go basis where benefits are paid for using current tax revenues. Benefits will be subject to a minimum retirement age.Employer-sponsored defined benefit and defined contribution schemes: Typically, employers will make some contributions in the form of ‘deferred salary’. In some countries, employer contributions may be mandatory.Additional voluntary contributions may be amassed through the growth of defined contribution schemes: These plans typically provide some tax benefits on contributions. There are important implications for individuals in managing these assets (such as investment risk and longevity risk).
THREE PILLARS OF PENSIONS
l There are a limited number of places – attendance is through registration onlyl The workshop will take place in the morning ending with lunch
Offshore bonds remain a hugely important part of financial planning for advisers who have clients with cross-border interests.
International Adviser is running half-day seminars giving you the latest information on how and when to use offshore bonds for investing, retirement planning and tax mitigation. The seminars are hands-on, practical and free-to-attend for financial intermediaries.
To reserve your complimentary place or for more information, please contact Vicky Parker, on 020 7065 7564 or by email at [email protected]
Offshore Bond Workshop2012
We are running two identical workshops, one in Leeds and one in London, so you can choose the location that is the most convenient for you.
CPD COMPLIANT
LeedsTuesday 6th March 2012, Park Plaza Hotel
LondonWednesday 7th March 2012, The Waldorf Hilton
37JANUARY 2012 [www.international-adviser.com] INTERNATIONAL ADVISER
FUND SELECTOR’S COMMENT EMMA O’NEILL, INVESTMENT RESEARCH ANALYST, OBSR
Last September proved a timely reminder to inves-tors of the volatility that emerging market debt (EMD) funds can exhibit, with the average hard cur-rency fund falling by around 7% in dollar terms, as fears over weak eco-nomic growth in devel-oped countries and global financial turmoil led inves-tors to sell down perceived riskier assets.
Local currency sover-eign bond funds were even more negatively affected,
and the average fund fell by around 10% over September alone, driven predominantly by the weakness of emerging market currencies. This was one of the most pro-nounced monthly draw-downs in absolute and rel-ative terms since the Lehman Brothers crisis.
l Value of liquidityLiquidity risk has always been a significant factor for EMD funds, and this poten-
tial risk has been amplified by the significant inflows the sector has received since the beginning of 2009. The reversal of these inflows was generally regarded as a key pressure point for the asset class, and in September we wit-nessed the extent to which this can impact performance.
EMD denominated in local currencies could remain susceptible to out-flows if the flight to quality takes further hold, and this
Global emerging market debtWe analyse the best, the newest and the biggest global emerging market debt funds. Commentary from Emma O’Neill, investment research analyst at OBSR
Top ranked funds Three-year performance
Top funds – 3-year risk and return
Standard deviation (%)
Retu
rn (%
)
BlueBay Emerg Mkt Corp Bd R $
GS Glbl Emerg Mkts Debt Base Dis Fidelity Emerging
Mkt Debt A-$
LM WA Emerg Mkts Bd A Inc (D) $ Pioneer Fds Emerg
Mkts Bd E € ND
2
To 23 Nov ’11. Bid to bid, gross income, no cap. Source: Morningstar
3 4 560
90
120
150
M
Sector average
SEI GMF Emerg Mkts Debt £ Wealth B
Sovereign High Yield Inv Co A
AB Emerging Markets Debt A $
Aberdeen Global Emerging Markets Bond A2 Sicav II (Lux)
Aberdeen EM Bds B $
21 Nov ’08 – 23 Nov ’11. Bid to bid, $, gross income, no cap. Source: Morningstar
Top 10 global emerging market debt funds by 3-year performance3-year 3-year 3-year 3-year 3-year 3-year M’star Fund Dom% chg Alpha Beta R² Sharpe volatility Ratings size ($m)
Sicav II (Lux) Aberdeen EM Bds B $ 135.03 0.18 1.28 0.53 0.44 4.09 7.81 Lux
FUNDS TO WATCHThe BlueBay Emerging Market Corporate Bond Fund is managed by Polina Kurdyavko, who has ten years’ experience and is part of a 16-strong emerging market debt team. BlueBay is a specialised bond asset manager that has significant resources across the asset class. This fund invests predominantly in emerging market corporate bonds.
Aberdeen Emerging Market Bond is run by Brett Diment who is an experienced manager and has invested in the asset class for over 20 years. The team covers the spectrum of hard currency, local currency and corporate bonds, with a primary emphasis on hard currency but significant flexibility to capitalise elsewhere when appropriate.
The Fidelity Emerging Market Debt Fund is run by seasoned investor John Carlson, who joined Fidelity in 1995 and has run the US mutual fund Fidelity New Markets Income (an emerging market debt offering) for the past 16 years. The manager will have at least two-thirds of the fund in hard currency sovereign bonds. He also incorporates an emphasis on liquidity.
FUND SELECTOR GLOBAL EMERGING MARKET DEBT portfolio
38
FUND SELECTOR GLOBAL EMERGING MARKETS
INTERNATIONAL ADVISER [www.international-adviser.com] JANUARY 2012
The increase in banking capital requirements since the 2008 crisis has also reduced the secondary market for emerging market sovereign and corporate bonds, which has increased market volatility over the past few years
Top ranked funds Newcomers
23 Nov ’10 – 23 Nov ’11. Bid to bid, $, gross income, no cap. Source: Morningstar
will be particularly notable for those countries with high levels of foreign ownership.
Additionally, the increase in banking capital requirements since the 2008 crisis has also reduced the secondary market for emerging market sovereign and corporate bonds, which has increased market volatility over the past few years.
In 2008, the asset class sold off sharply on the back of the rapid deteriora-
tion of banking and corpo-rate markets, and this was further exacerbated by hedge fund deleveraging.
l Comparison with ’08We saw some funds lose considerable assets under management in short peri-ods of time. So is it differ-ent this time around? The inherent illiquidity in the asset class, similar to other areas of the bond market, will undoubtedly remain. However there are some
fundamental differences.First, in 2008 the whole
global financial system was on the verge of freezing up following Lehman’s col-lapse, and the refinancing needs for emerging market countries were significantly higher at the time. Second, leveraged investors repre-sented around 50% of the market including banks and hedge funds. However this has been reduced sub-stantially since then.
Emerging market cur-rencies, rates and credit
“
”
positions are now held by a more diversified group of global and local investors. The investor base includes pension funds, Asian inves-tors, sovereign wealth funds and central banks.
Another important factor is that these emerging countries have witnessed higher economic growth over the previous decade compared with industrial countries (cumulative GDP even in the crisis of 2008 remained above developed countries).
Top 10 global EM debt funds with less than a 3-yr, but more than a 1-yr track record1-year 1-year 1-year 1-year 1-year 1-year Launch Fund Dom% chg Alpha Beta R² Sharpe volatility date size ($m)
Ashmore Sicav EM Sov Inv Grd Debt Instl 4.85 0.11 0.93 0.96 0.06 0.83 25 Feb ’10 10.01 Lux
To 23 Nov ’11. Bid to bid, gross income, no cap. Source: Morningstar
1 1.5 20
1
2
3
4
5
Sector average
MFS Investment Emerging Markets Debt $ 2
Ashmore Sicav EM Sov Inv Grd Debt Instl
Pimco GIS Socially Rspnb EM Bd Inst $
Ashmore Sicav EM Inv Grd Corp Debt Instl
Ashmore Sicav EM Sov Debt Instl
UBAM Emerging Mkt Corp Bd $ I
GW Fidelity Emerging Markets Debt Acc
JPM Emerg Mkts Corp Bd A (acc) - $
EM-Invest 2016
Barclays Emerging Markets Debt B Acc €
FUNDS TO WATCHWithin the Newcomers list there are three funds from Ashmore, which is a renowned EMD specialist whose business was founded in 1992 and became independent in 1999. The company’s significant assets under management and broad product range are testament to its heritage in the sector, benefiting in particular from the experience and expertise of senior fund manager, Jules Green, a founding member of Ashmore’s investment committee, until his retirement in September 2009.
The UBAM Emerging Market Corporate Bond Fund is run by Jean-Dominique Butikofer who has been with UBAM since January 2006. This fund was launched in June 2010 and is a relatively pure mandate which only invests in emerging market corporate bonds or quasi-sovereign bonds. The manager incorporates macroeconomic analysis with extensive bottom-up fundamental analysis to form a comprehensive view of each country. In 2008 the team suffered from extensive and rapid fund outflows which dented performance in their other offerings. As a result the manager is cognisant of liquidity in the funds.
39
FUND SELECTOR GLOBAL EMERGING MARKET DEBT
JANUARY 2012 [www.international-adviser.com] INTERNATIONAL ADVISER
global bond market capi-talisation, accounting for around 20%. The composi-tion of the market has also changed markedly, as emerging market local bonds account for around $6.8trn, compared with emerging market hard cur-rency bonds which are con-siderably less at around $1.4trn.
l Currency issuanceThe trend for emerging countries to switch from dollar issuance to local cur-rency bonds accelerated between 2005 and 2007, as governments were able to capitalise on significant investor demand – in part driven by the unattractively low spreads/yields on all dollar-denominated credit – to borrow money in their
domestic currencies.From the issuers’ per-
spective, this had the advantage of a currency match with their domestic expenditure, while also taking early steps in the development of a local sovereign yield curve, from which local currency cor-porate debt could be priced in the future.
From an investor’s point of view, buying local dura-tion enabled the participa-tion in any interest rate convergence between developed and developing world countries, in addition to the potential for upside from the currency aspect of non-dollar investments.
This led to a raft of fund launches over the period, and local bond funds have experienced rapid growth over the past few years.
The trend for emerging countries to switch from dollar issuance to local currency bonds accelerated between 2005 and 2007, as governments were able to capitalise on significant investor demand”
“Over the past few years government balance sheets have also improved signifi-cantly in contrast to devel-oped countries.
Furthermore, policy frameworks have been enhanced, and most emerging market countries have adopted inflation tar-geting and more flexible exchange rates.
This improvement in quality is also indicated by the convergence of the credit ratings between developed and emerging market countries. The average credit rating of the JPM EMBIG Diversified Index has risen over the past 15 years from around BB- to BB+.
The EMD market has grown considerably over the past decade and is now a significant part of the
Within hard currency issu-ance, the market composi-tion has also evolved, with significant growth in the issuance of corporate and quasi-sovereigns over the past ten years, which in turn has also led to the launch of pure EMD cor-porate bond funds.
l Diversity of fundsAs discussed, there are sev-eral different EMD funds available to investors, and it is important to understand the composition of these products. Within the list there is a mixture of dollar-denominated sovereign bond funds, local currency funds, corporate funds, absolute return funds and also blended approaches (hard, local and corporate bonds combined).
Top 10 global emerging market debt funds by assets under management3-year 3-year 3-year 3-year 3-year 3-year M’star Fund Dom% chg Alpha Beta R² Sharpe volatility Ratings size ($m)
Schroder ISF EMkt Dbt Abs Ret A Acc 21.59 -0.26 0.54 0.46 0.17 1.85 7,237.44 Lux
JB BF Local Emerging $ B 59.3 -0.86 1.54 0.73 0.28 4.16 6,596.49 Lux
To 23 Nov ’11. Bid to bid, gross income, no cap. Source: Morningstar
2 3 4 520
40
60
80
100
Sector average
Pictet-Global Emerging Debt-P $
Pimco GIS Emerg Mkts Bond Inv $ Acc
MFS Meridian Emerg Mkts Dbt A2 $
HSBC GIF Glbl Emerging Markets Bd P Inc
GS Glbl Emerg Mkts Debt Base Dis
Templeton Emerging Mkts Bd A QDis $
21 Nov ’08 – 23 Nov ’11. Bid to bid, $, gross income, no cap. Source: Morningstar
FUNDS TO WATCHTempleton Emerging Market Bond is run by Michael Hasenstab, who has been involved in the fund’s management since 2002 and became lead manager in 2006. We like the manager’s strategic approach to fixed income, relying on detailed macroeconomic fundamental analysis to position the fund in the parts of the global universe that he believes offer the best value.
MFS Meridian Emerging Market Bond offers investors a benchmark-aware EMD fund with a primary focus on dollar-denominated sovereign debt. We hold this fund in high regard and particularly like the team’s risk-aware approach, which is underpinned by a clear mindfulness on capital preservation, but they are nevertheless willing to take meaningful risks when appropriate.
Schroder ISF Emerging Markets Absolute Return is managed by Geoff Blanning. The fund is run with an absolute return mindset, and the aim of delivering around 10% per calendar year. It will invest in any part of the EMD universe and can hold up to 40% in cash.
QUALITY FUNDS
40 INTERNATIONAL ADVISER [www.international-adviser.com] JANUARY 2012
The IA Quality FundsThe IA Quality FundsThe IA Quality Funds is a list of the blue-chip funds of the offshore universe: it contains only well-estab-lished, high-performance funds in the most popular categories.
Methodology Starting from the Morningstar offshore database of 8,600 funds, only those with a qualita-tive rating from independ-ent rating agencies Stan-
dard & Poor’s, Morningstar or OBSR Research qualify. Funds in each category are ranked according to their Morningstar Rating, which is calculated based on a fund’s total returns, adjust-ed for risk and sales charg-es, relative to other funds in its category.
Sectors The 13 bespoke category divisions are the result of combining vari-
ous Morningstar GIF sec-tors, so the funds listed are firstly a reflection of which styles have done well, sec-ondly of which managers have been successful.
Three-year vol This meas-urement is an annualised volatility of the fund over three years.
UK reg The ‘UK reg’ flag is based on Morningstar’s
list of UK registered for sale funds.
Offshore bond platforms Many of the Quality Funds that appear in the following pages will be available on life company offshore bond platforms, as mirror funds or direct fund links. Where they are not, it will be possible to request they are added to product fund ranges.
Thames River Sterling Gbl Bond £ Inc 17.02 7.48 7,800 £ Thames River Capital Ireland AA/V4 Y
Robeco Lux-o-rente D 16.68 15.77 1.00 Robeco Luxembourg Luxembourg AA/V3 Y
Thames River Sterling Gbl Bond $ 12.67 9.04 7,500 $ Thames River Capital Ireland AA/V4 Y
ENHANCED MORNINGSTAR ANALYST RATINGS FOR FUNDS
Morningstar has revised its Analyst Rating scale to now include three positive ratings (Gold, Silver and Bronze), one Neutral and one Negative rating. These ratings replace the previous scale of Elite, Superior, Standard, Inferior, and Impaired.
The top three tiers are expressed as medals and are reserved for funds that Morningstar analysts believe have sustainable advantages that position them well versus peers or the relevant benchmark on a risk-adjusted basis over a full market cycle. These medals are as follows:
To arrive at a rating, Morningstar analysts evaluate five key pillars which they consider critical to a fund’s ability to succeed:
People Process Parent Performance Price
BANKING DEPOSITS OFFSHORE ACCOUNTS RANKED BY INTEREST RATES
INTERNATIONAL ADVISER [www.international-adviser.com] JANUARY 201246
Provider Account Notice Deposit Gross Interest Telephone number/ or term % paid web address
Lloyds TSB International International Bonus Saver None £100,000 2.01%* Mly +44 (0)1624 641825
Britannia International Access Plus None £50,000 2.00% Yly +44 (0)1624 681100
Skipton International International Access Plus None £100,000 1.60% Yly +44 (0)1481 727374
No-notice £ accounts
Please note: rates correct on 19 Dec, 2011All rates are shown gross. * Introductory rate for a minimum of 6 months. (P) Operated by post. (F) Fixed rate. (W) Operated by internet. (OM) On maturity. (S) Available to those aged 60 and over. All rates and terms subject to change without notice and should be checked before finalising any arrangement. No liability can be accepted for any direct or consequential loss arising from the use of, or reliance on, this information. Readers who are not financial professionals should seek expert advice.
Source: www.moneyfacts.co.uk
Skipton International International Select 180 180-day £100,000 2.75% Yly +44 (0)1481 727374
Zurich Bank International Euro Reward None 5,000 1.25% Yly +44 (0)1624 671666
No-notice accounts
INTERNATIONAL LIFE & BANKING LISTINGS
JANUARY 2012 [www.international-adviser.com] INTERNATIONAL ADVISER 47
Professional servicesHere are some of the biggest players in the offshore professional services arena with a description of their services and their contact details. If you are interested in being included, please contact Ben Wiseman on +44 (0)20 7065 7573 or email: [email protected]
Company name: IOMA GroupAddress: IOMA House, Hope Street, Douglas, Isle of Man, IM1 1APTel: +44 (0) 1624 681200Fax: +44 (0) 1624 681390Email: [email protected] Website: www.iomagroup.co.im IOMA Life is part of IOMA Group, which offers a complete wealth and risk management service from its base in the Isle of Man, one of the world’s best regulated and most successful financial centres. We administer or manage over $8 billion of funds for global clients, and have a proven track record in innovative solutions that deliver good results and mitigate risk.
The IOMA Group is small enough to offer a highly personal service, but sufficiently large to provide in-depth, specialist expertise. The business is comprised of eight divisions. Each is a specialist in its own area, but all share the same desire to grow our business by delivering effective results. Some clients only use one service, others mix and match between businesses to suit their needs at the time. The divisions are: Solutions, Life, Investment Management, Fund Management, Pensions, Fiduciary, Captives and Insurance.Product offeringsIOMA Life offers a wide range of inheritance tax mitigation and estate planning products. It provides traditional single premium UK products via an offshore portfolio bond and a wide range of specialist unit linked life products. IOMA Life is also a sought after provider of offshore bonds for investment platforms.
Company name: Investors Trust Assurance SPCAddress: Suite 4210, 2nd Floor, Canella Court, Camana Bay, PO Box 32203, Grand Cayman, KY1-1208, Cayman IslandsTel: +1 (305)603-1400Fax: +1 (786)363-1822Email: [email protected]: www.investors-trust.comInvestors Trust Assurance SPC (“ITA”) is an international insurance company licensed and regulated by the Cayman Islands Monetary Authority. ITA has gained a leadership position in the international insurance markets by specializing in the provision of investment–linked insurance products and class leading customer service. With service offices established to support policyholders around the world, ITA seeks to provide opportunity to its policyholders through access to the global financial markets. ITA is constantly innovating, and investing in technology to allow clients online multi-language (English, Spanish, Portuguese, Chinese and Japanese) access to manage their investment-linked products.Product offeringsITA works with some of the world’s top asset managers under its convenient open architecture platform. It provides clients with greater investment choices and the ability to plan for a happy and comfortable retirement and to provide for their children. Specialising in medium to long term investment-linked products tailored to meet the needs of investors around the world, ITA offers a range of flexible, tax-efficient products including regular and single premium annuities, designed to suit various income levels and financial planning needs.
Company name: La Mondiale Europartner Sa
Address: Atrium Business Park, 23A, rue du puits romain, ZA Bourmicht L- 8070 Bertrange, Luxembourg
La Mondiale Europartner is based in Luxembourg and has gained experience in wealth management solutions over many years. They now operate in several EU countries including France, Luxembourg, Italy, Portugal, Spain, Belgium and the UK.
Their focus is aimed at the cross-border aspects of wealth management, enabling them to produce unit-linked, multi-currency, multi-manager, multi-lingual – investment and expatriate pension solutions.
Product offeringsBond 4 European Mobility is for UK-based independent financial advisers providing a cross-border-compliant, tax-efficient, multi-currency wrapper with open architecture. Investment is allowed via collective investment schemes chosen by the client/IFA or may be managed by a discretionary manager.
The bond allows access to the La Mondiale’s main fund, which provides guaranteed returns in £, and $. Locally compliant investment solutions are also available to IFA’s advising UK expatriate clients residing in Spain and France.
Aegon (a brand name of Aegon Ireland plc) provides attractive investment solutions, particularly to UK investors. With a heritage in the offshore market dating back to 1995, Aegon is a leading provider in its chosen market.
We are part of the Aegon Group, which is one of the world’s largest listed insurance companies with assets under administration of around £348bn.
Based in Dublin, one of the world’s most dynamic financial centres, we also benefit from an enviable infrastructure. The client service team in Dublin draws on the talents of a large, young, motivated and highly skilled workforce.
Our service ensures that quality assurance is embedded in all we do to meet the requirements of our customers.
Product offeringsA portfolio bond, a packaged inheritance tax plan (a discounted gift trust plan), a regular savings plan and a guaranteed income plan.
Company name: Irish Life International Limited
Address: Bloodstone Building, Sir John Rogerson’s Quay, Dublin 2, Ireland
Irish Life International, a life insurance company incorporated and regulated in Ireland, was established in 1994. In September 2011, Irish Life International was acquired by SEB Trygg Liv Holding, which is part of the SEB Group, one of the largest banking and life assurance groups in northern Europe. SEB Group has been providing financial services to its clients since 1856.
Product offeringsIrish Life International engages in the cross-border distribution of insurance-based investment products under the EU Third Life Directive on a freedom-of-services basis.
It provides a range of unit-linked whole-of-life insurance products that offer an extensive choice of investment options and funds. It offers a wide range of territory-tailored products for residents of UK, Isle of Man, Channel Islands, Spain, Italy, the Netherlands, Belgium, France, Finland and Cyprus.
Its portfolio products are open architecture offering a very broad external asset choice as well as our range of approximately 100 internal unit-linked funds.
Irish Life International is regulated by the Central Bank of Ireland.
LIFE LISTINGS
48
INTERNATIONAL LIFE & BANKING LISTINGS
INTERNATIONAL ADVISER [www.international-adviser.com] JANUARY 2012
Company name: Generali InternationalAddress: PO Box 613, Generali House, Hirzel St, St Peter Port, Guernsey, Channel Islands, GY1 4PATel: +44 (0) 1481 714 108Fax: +44 (0) 1481 712 424Email: [email protected] Tracing its roots back to 1977, Generali International is a specialist arm of the Generali Group, one of the largest insurance groups in the world. It is a leading offshore provider offering sophisticated and powerful, life insurance-based, wealth management solutions to a global audience, including international expatriates and certain local resident populations. It has built up an enviable record for flexible and competitive investment solutions supported through its network of regional offices in Cyprus, Hong Kong and Ireland, and a local office in Singapore. The company is based in Guernsey, a premier offshore location, is a Registered Insurer under the Insurance Business (Bailiwick of Guernsey) Law 2002 and is also an authorised insurer in Hong Kong.Product offeringsA range of flexible unit-linked regular and single premium-based savings, retirement and investment plans, with access to over 120 funds selected from some of the worlds leading fund houses. A variety of specifically packaged portfolio bonds offering the widest choice of investment options through an open architecture platform.
Company name: Friends Provident International
Address: Royal Court, Casteltown, IM9 1RA, Isle of Man
Friends Provident International (FPI) is part of the Friends Life group. FPI was established in the Isle of Man in 1978, and has been delivering innovative and sophisticated propositions to a competitive market for more than 30 years. FPI’s business continues to grow and today it has offices in the Isle of Man, Hong Kong, Singapore and Dubai. This enables the delivery of first class customer service to local markets in a language they understand. Product offeringsFPI offers a range of individual savings, protection and investment products, as well as group savings and tax planning trusts. An extensive fund range, is complemented by FPI’s Dynamic Portfolio Planner international (DPPi) – an innovative portfolio-planning tool that enables advisers to build bespoke investment portfolios for their clients.
Company name: Royal London 360°Address: Royal London House, Cooil Rd, Douglas, Isle of Man, IM2 2SPTel: +44 (0)1624 681893Fax: +44 (0)1624 677336Email: [email protected]: www.royallondon360.com
Today’s offshore investor demands a combination of investment choice, security and quality service. Royal London 360°’s attractive range of products provide flexible solutions and are supported by experienced servicing teams, effective marketing support and strong technical back up, which allow investors to plan for the future with confidence and security.
Headquartered in the Isle of Man, one of the world’s leading offshore financial jurisdictions, Royal London 360° was established through the merger of Scottish Life International Insurance Company Limited and Scottish Provident International Life Assurance Limited. The company has combined industry experience of over 30 years, and assets under administration in excess of £2bn*.
Royal London 360° is the international division of the Royal London Group. Royal London is the largest mutual life and pensions company in the UK with group funds under management of £44.2bn. Group businesses serve around 4 million customers and employ 2,950 people*.
360° represents a number of significant advantages: the international nature of its business, the way its employees think and take personal responsibility, and the company’s adaptable approach to meeting tailored requirements.* Source: Royal London. All figures as at 30 Sept, 2011
Company name: AXA Isle of Man Limited
Address: Royalty House, Walpole Avenue, Douglas, Isle of Man, IM1 2SL, British Isles
Established in July 1992, AXA Isle of Man Limited operates from the secure and tax-efficient environment of the Isle of Man. A member of the global AXA Group, one of the world’s largest insurance groups, AXA Isle of Man manages in excess of £6.3bn for over 30,000 customers (as at 31 December 2009). AXA Isle of Man has 18 years’ experience of providing award-winning flexible, cost-effective products for the customers of financial advisers. A member of the Manx Insurance Association (MIA) and the Association of International Life Offices (AILO), the company works within the offshore industry to help educate the market in key areas such as the uses and tax treatment of offshore bonds.
Product offeringsThe Estate Planning Bond is an offshore investment solution that may be suitable for clients seeking to mitigate the effects of inheritance tax on their estates. Evolution is an offshore portfolio bond that offers a range of investment options for individual, corporate and trustee investors. The Regular Investment Account is a flexible offshore bond that accepts regular as well as single premiums.
Prudential International is part of the Prudential Group, one of the UK’s largest and best-known financial services organisations. As a group, Prudential has been managing money for over 160 years. It has in excess of £309bn of funds under management (at 30 June, 2010).
Product offeringsPortfolio Account is an open architecture bond with access to over 2,500 funds. Its key features include a choice of four flexible charging options, annual management charge (AMC) rebates and discounted fund terms. AMC rebates are not guaranteed and are subject to change.International Prudence Bond provides a range of risk-graded unit-linked funds, from Prudential and other leading fund managers. These include the PAC with-profits funds and the PruFund range of funds, each available in sterling, euro and US dollar. Flexible Protection Bond and Flexible Life Plan are Prudential’s single and regular premium whole of life protection plans. Both offer a selection of investment funds and a single or joint life basis.All the funds available for the company’s products grow largely tax-free.It also offers a range of trusts for inheritance tax planning.
Company name: Legal & General International (Ireland) Ltd
Address: Beaux Lane House, Lower Mercer St, Dublin 2, Ireland
Legal & General International (Ireland) Limited was established in July 2007. It currently offers international investment and tax planning solutions to investors who are resident in the UK, Channel Islands or Isle of Man. The company is a subsidiary of the Legal & General Group Plc, which was established in 1836 and is one of the UK’s leading financial services companies. As at 31 Dec, 2010, Legal & General Group was responsible for investing £365bn worldwide on behalf of investors, policyholders and shareholders. It also had over 7 million customers in the UK for life assurance, pensions, investments and general insurance plans.
Product offeringsInternational Portfolio Bond: Provides a tax-efficient wrapper with a choice of charging structures and investment in a wide range of assets. The International Portfolio Bond also offers access to the UK’s largest independent fund platform, Cofunds. The value of investments in these products is not guaranteed and customers may not get their full money back.
INTERNATIONAL LIFE & BANKING LISTINGS
JANUARY 2012 [www.international-adviser.com] INTERNATIONAL ADVISER 49
Company name: Alliance & Leicester International Limited
Address: PO Box 226 ,19/21 Prospect Hill, Douglas, Isle of Man, IM99 1RY
The Alliance & Leicester Group has offered offshore savings from the Isle of Man since 1990. Alliance & Leicester International Limited (ALIL) was incorporated in November 1996 and offers a range of offshore savings solutions to personal customers. From its office in Douglas, ALIL serves account holders in well over 100 countries worldwide.
Alliance & Leicester International Limited is a wholly owned subsidiary of Santander UK plc.
Product offeringsCompetitive interest rates on a wide range of offshore accounts, including all major currencies.
Company name: Clydesdale Bank International
Address: Clydesdale Bank International, Regency Court, Glategny Esplanade, St Peter Port, Guernsey, GY1 3ZU
Clydesdale Bank International is a branch of Clydesdale Bank, part of the National Australia Bank Group – one of the world’s largest banking groups by market capitalisation. We offer savings accounts suitable for individuals, companies and trusts and our savings accounts are suitable for inclusion within offshore bonds. Clydesdale Bank International is a participant in the Guernsey Banking Deposit Compensation Scheme* (details are available from our office on request).
Product offeringsWe offer a range of savings accounts and fixed term deposits with competitive rates, from instant savings accounts to five-year fixed term deposits for £. In addition, we offer $, C$, €, A$ and NZ$ instant savings accounts. We offer current accounts with internet banking and debit cards in £, $, €, A$ and NZ$.* Deposits with Clydesdale Bank International are not covered by the Financial Services Compensation Scheme established in the UK under the Financial Services and Markets Act 2000
Company name: Standard Bank Offshore
Address: Standard Bank House, One Circular Road, Douglas, Isle of Man
Contact: John Hall, director intermediary distribution
At Standard Bank, we understand that people with international lifestyles have individual requirements and that no two expatriates’ needs are the same. Standard Bank Offshore is ideally placed to help you make the most of your changing circumstances. Our products and services are specifically designed to make your financial arrangements simpler and also to assist you in taking advantage of any benefits that your new status may present.
Product offeringsWe have specifically designed a flexible range of bank accounts to hold your cash in any major currency. Our accounts will meet your needs, whether you wish to access money on a regular basis, or are saving for the longer term. We also have a range of structured products, fund investments and lending services.
Company Name: Skipton International
Address: PO Box 509, Fairbairn House, Rohais, St Peter Port, Guernsey, GY1 6DS
Skipton International is a Guernsey-based offshore savings and mortgage specialist. The company offers deposit products for both individual savers and businesses. Skipton International is part of Skipton Building Society group, the fourth largest society in the UK with over £14bn assets.
Product offerings
Skipton International offers a range of easy access, notice and fixed-term products.
Accounts have been designed with the needs of business in mind and are accessible to a wide range of trust companies, businesses and intermediaries wanting to place cash deposits. Annual and monthly interest options are available and Skipton International business accounts offer tiered rates of interest, so larger deposits will earn higher rates of return on the whole balance.
Specialised business account support staff offer a dedicated contact point to ensure smooth and fast account opening, with customers guided through a straightforward new account process. Once opened, dedicated contacts are available to ensure the smooth running of accounts.
Standard Life International is an Irish life assurance company wholly owned by Standard Life Assurance Limited, which has been set up to sell insurance business from its base in Ireland into the UK, Channel Islands and the Isle of Man. The Standard Life group of companies has been looking after its customers for over 185 years and currently has over 6 million people worldwide relying on them for their financial needs.
Our impressive parent means that we attach a great deal of importance to excellent customer service and quality products. Standard Life International was awarded Best Adviser Support and Customer Services from International Adviser for their International Bond in 2010. Our International Bond has been rated 5 Star by Defaqto for the past 2 years.
Product offeringsOur core product is the International Bond. This is an offshore portfolio bond that provides a tax-efficient wrapper with a transparent charging structure payment flexibility (including recurrent single premiums) and flexible commission options. Your clients can choose from a wide choice of investments including Insured funds, Mutual funds, whole-of-market funds, deposit accounts and have access to a panel of Discretionary Investment Managers. A comprehensive range of trust options is also available, which can be adapted to help meet your client’s estate planning needs.
Company name: CMI Insurance Company Limited
Address: Clerical Medical House, Victoria Rd, DouglasIM99 1LT, Isle of Man
Tel: +44 (0)1624 638888 • Fax: +44 (0)1624 625900
Website: www.scottishwidows.co.uk/ifa
Clerical Medical and Scottish Widows have combined forces operating under the Scottish Widows brand. CMI Insurance Company Limited (CMI) is Scottish Widows’ specialist offshore insurance company. Set up in 1987, it has over 20 years of offshore expertise into the UK market.
Financial strengthScottish Widows is one of the longest established providers in the country. It is part of the Lloyds Banking Group, one of the biggest financial service providers in the UK – providing strength and security. The Group has over 30 million customers and is the UK’s leading provider of current accounts, savings, personal loans, credit cards and mortgages. Scottish Widows and Clerical Medical have £4.3bn free capital, as at the end of 2008, well in excess of regulatory solvency requirements.
Product offerings (UK, Channel Islands and Isle of Man)CMI Global Investor – a flexible tax-efficient offshore, single premium portfolio bond offering almost unlimited fund choice.CMI Corporate Investor – an offshore, single premium bond intended specifically for UK corporate investors.A comprehensive range of trust plans including Gift Trust, Loan Trust, Discounted Gift and Income Trust, Excluded Property Trust and Probate Trust.
BANK LISTINGSLIFE LISTINGS
50
RECRUITMENT
INTERNATIONAL ADVISER [www.international-adviser.com] JANUARY 2012
To have access to over 10,000 potential candidates globally, book your recruitment advertisement by calling Ben Wiseman on +44 (0)20 7065 7573 or email [email protected]
JANUARY 2012 [www.international-adviser.com] INTERNATIONAL ADVISER 51
www.globaleye.com
PO Box: 24592, Dubai, United Arab EmiratesTel: +971 4 4043700 | Toll Free: 800 4558 | Fax: +971 4 3486362Email: [email protected]
Award winning brokerage Globaleye seeks highly motivated professionals to work as Independent Financial Advisers, providing Corporate and Personal Solutions from an array of protection and investment providers.
We are seeking career orientated people, a term rarely used in the offshore arena, who are qualified individuals with at least 2 years industry experience ideally. The candidate should be articulate, competent and confident, with an in-depth understanding of financial planning principles.
BENEFITS
If you are ready for a career in some of the most exciting cities in the world, contact us. If you have an existing book of business that needs a better home which can provide you with an income even after you leave, then you too should give us a call.
TAKE ACTION Go to our website for more information and then if you think you fit the profile above send your CV to [email protected], quoting reference GE/IA/11, or call +44 161 850 1431 (No Agencies)
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PERSONAL LINES BROKER OF THE YEAR
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GLOBALEYE
Hong Kong has taken the top spot on the World Economic Forum’s Financial Development Index for the first time, moving ahead of both the US and the UK.
Hong Kong moved up from fourth place in the index, which looks at ele-ments of financial develop-ment, including the work-ings of banks and other financial services entities, capital markets, the busi-ness environment and transparency.
The US fell to second place, with a score unchanged from 2010, while the UK dropped to third, with a decline in its overall score.
BY HELEN BURGGRAF
In an effort to cool its scorching residential hous-ing market, Singapore has introduced an extra stamp duty equal to 10% of the value of properties sold, which will apply only to foreigners.
However, citizens of five countries that have free-trade agreements with Singapore, namely the US, Switzerland, Liech-tenstein, Norway and Iceland, will avoid the new
Expatriate clients, many of whom move from country to country over the course of their lives, require a totally different strategy to those who live all of their lives in the UK, if they are to get the most from their accumulated wealth after retirement.
This is why deVere Group recommends a retirement savings prod-uct known as European Union Retirement Benefits Schemes (EURBS).
EURBS are not, strictly speaking, a new product. Like the UK’s QROPS, they have their origins in pan-European pension law adopted in 2003, which enabled occupational pen-sions to be moved freely between member states whenever a pension-holder moves permanently to live in another EU jurisdiction.
Unlike QROPS, EURBS are by definition limited to Europe. That said, EURBS share a number of advan-
tages with QROPS – but unlike them, will not be affected by the proposed changes announced last month to existing QROPS legislation in the UK.
What this means for clients who move abroad within Europe’s borders is that they may be able to transfer their accrued pensions to a significantly more tax-efficient jurisdic-tion than they are in at the moment.
As is the case with some QROPS, they may also enable clients to potential-ly withdraw up to 30% of their total pension amount in a tax-free lump sum (depending on residence).
In our view, responsible advisers with clients of any nationality who are think-ing about moving abroad within Europe, or who are already expatriate, should be talking to them about the possible use of EURBS to unlock their European pensions.
EURBS: Are they the new QROPS for EU expatriates?
Singapore introduces higher rate of duty for foreigners
Mike Coady, a director at deVere Group, considers whether EU retirement benefits schemes are ‘the new QROPS’ for peripatetic EU clients
OPINION
www.international-adviser.com
In the Middle East, Saudi Arabia leapt past the UAE and Bahrain to become the region’s top financial centre, in 23rd place, helped by its rela-tive financial stability. It rose three places, while the UAE, which was the region’s top-ranked coun-try in 2010, fell four places to 25th, and Bahrain slid one place to 24th.
Kevin Steinberg, chief operating officer of the World Economic Forum USA, said Hong Kong’s ascent in the WEF ranking was “a major milestone, the first time in the report’s his-tory that the UK or the US didn’t come out on top”.
Hong Kong rises to the top of WEF Index
charges, according to a report published in The Straits Times.
The exemption was not mentioned, however, in the Singapore Government’s statement announcing the stamp duty.
Previously, the top stamp duty rate was just 3% for all home buyers, and this remains the rate for most non-foreigners.
The new duty took effect immediately.
In announcing the stamp duty, the govern-
ment said it was neces-sary for the maintenance of “a stable and sustainable property market,” noting that foreigners accounted for 19% of all private resi-dential property purchases in the second half of 2011, up from 7% in the first half of 2009.
“The Government’s objective is to promote a sustainable residential property market where prices move in line with economic fundamentals,” it added.
The biggest mover in the top 10 was Norway, which leapt into tenth place from 15th in 2010.
