Client Affairs

Vontobel's New Private Banking Service Is Shrouded In Secrecy

Osmond Plummer, Geneva , 14 June 2010


This publication has reported at length on the ramifications of the US HIRE Act and how it may result in US citizens not being able to obtain financial services outside of the US whatever their taxation situation.

On 20 May, meanwhile, the US Senate approved the Restoring American Financial Stability Act of 2010 (RAFSA), which is legislation focused on increasing regulation in the financial sector following the economic crisis. This act requires non-US based asset managers to register with the SEC if they manage $25 million or more of assets for US clients.

As this noose tightens around the industry, Banque Vontobel in Switzerland has announced that it will launch a private banking service aimed at US declared taxpayers via a new company: Vontobel Swiss Wealth Advisors.

However, this publication has not been able to persuade the firm to comment on this venture and elaborate on specific details. WealthBriefing specialises in looking into subjects such as this and such a development is of significant interest – not least given the massive resources that the bank will have to delegate to ensure compliance with the new US regulations. The bank’s recent press release raises a whole host of questions. Your correspondent therefore contacted the Bank and Mr Reto Guidicetti to ask the following questions:

What does the parent bank plan in respect of US QFFI (Qualified Foreign Financial Intermediary) status under the HIRE act?

How does the bank intend to manage its clients investing into the US who operate via legal vehicles (offshore companies, trusts, foundations and funds) given the requirements of the act?

How will the bank make sure that its external assets managers have a compliant client base or will it require them to apply for QFFI status?

Does the bank plan to treat the new company as a totally separate entity for regulatory purposes given the risks inherent in a US declared strategy within the context of a new and uncertain US regulatory environment?

But answers came there none. Apparently, no senior member of management would be able to comment. It raises the question as to whether the service will launch as planned at all. It is certainly true that the increasing complexity of US rules and regulations will act as a disincentive to many foreign investors.

Whether Vontobel has found a solution to the situation is, so far, shrouded in secrecy.

(WealthBriefing is a sister publication of Family Wealth Report).

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