Whether the decision for moving to a foreign country is based on economic opportunities, on getting access to international education, or on retiring to a warmer climate, a growing number of wealthy clients today have lived in more than one country.
As a result, they have geographically diversified portfolios and want the flexibility to move assets and wealth easily between countries. Highly mobile entrepreneurs have real estate in multiple cities and rarely have a single bank account. In this context, there is a growing demand for high-end cross-border insurance solutions.
As their families grow, wealthy clients think about generational planning and managing transitions. The more activity an individual has in different countries, the more complex the planning becomes. While there are fewer barriers than ever before, the financial crisis has had a strong impact on regulation, audit, compliance and risk management.
This has led to an increasing demand for access to high-quality cross border expertise. Ensuring compliance with both local and international laws has become part of the most fundamental and day-to-day activities.
NAVIGATING THE CHANGING RULES
In this environment, it is clear that wealthy clients need help to navigate their way through all of these issues to achieve their financial and wider objectives. This also brings the subject of trust into sharp focus – clients need to be able to have trust in their advisers, the financial plan proposed and the individual solutions recommended.
It is also clear that life insurance still represents one of the most effective wealth planning and management tools available, continuing to provide wealthy clients with a range of strong benefits including succession planning, asset protection, investor protection, tax deferral, tax mitigation and a high level of financial privacy and simplicity in reporting.
Cross-border life insurance can deliver all of these benefits, but in today’s regulatory and tax environment it is critical that each client solution is fully compliant to ensure that assets are held in a secure and tax-efficient way over the long term.
COMPLIANCE AND EXPERTISE
It has become increasingly important for private bankers, wealth managers and life insurance companies alike to make sure they conduct appropriate due diligence and ask a set of key questions: Is the product/solution design robust? Is the product fully compliant with local laws and can it accommodate my mobility requirements or my international family situation?
When setting up a wealth or succession planning solution it is essential to check the compliance and expertise of the advisors involved, including the insurance company, the intermediary and any other professional advisers.
REDUCING COMPLEXITY – CREATING SOLUTIONS
Cross-border estates and international families as well as geographically diversified portfolios create wealth planning and estate planning situations that are increasingly complex to manage.
Today, it is more important than ever to have the relevant expertise in-house but also to partner with the most professional and well-established financial and legal institutions to deliver the highest quality cross-border insurance solutions.