Exclusive outtakes from industry leaders
By Neil Chatterjee
The U.S. has promised it will hunt down tax evaders.
And it seems tax evaders are on the run.
DBS bank, based in the growing offshore financial centre of
Singapore, told Reuters it had been approached by U.S. citizens
asking for its private banking services. But when told they would
have to sign U.S. tax declaration forms, the potential clients
Swiss banks also approached DBS on the hope they could
offload troublesome U.S. clients to a location that so far has
not been reached by the strong arms of Washington or Brussels.
DBS said no thanks. In fact many private banks and boutique
advisors now seem to be avoiding U.S. clients.
Will this spread to other nationalities, as governments
invest in tax spies and tax havens invest in white paint?
Is this the end of offshore private private banking?
Top private bankers are no different from the rest of us when it comes to looking after their money.
Some, such as Citigroup’s head of investments in Asia and ex-Lehman banker Debashish Dutta Gupta sold everything when his former employer went bust. Others held on and took the paper losses, before increasing their fixed income exposure and slowly edging back into equities this year.
It is a little known fact that private bank Wegelin, Switzerland’s oldest bank is also active in the bars and restaurants business.
In its ‘Nonolet’ bars – a play on the Latin saying pecunia non olet (money doesn’t stink) – in St. Gallen and in Geneva, hedge fund managers and other financial professionals rub shoulders with other locals in the early evening over sparkling wine or champagne and snacks.
Those who tend to avoid posh restaurants in Geneva’s expensive Rue du Rhone district and famed private banks because they believe they are not rich enough may be given a second chance at century-old wealth manager Julius Baer.
The Swiss private bank, which has made its name thanks to the services it offers to the ultra-rich, believe its powerful high-end brand may be keeping potential clients away.
Even the rich aren’t as well-off as they were a year ago but that’s not stopping the wealth management industry from focusing on what the future of private banking will look like after the economic downturn has passed. Click below to view my latest story:
As global markets rallied over the past five years, talent in the private banking industry had become a heavily fought over commodity. Rain makers, top bankers and entire teams were poached constantly by rival organizations who offered top dollar for the move.
However the unprecedented financial crisis has dramatically changed the talent landscape, with rookie bankers facing a harder time to move up the ladder, said a Merrill Lynch executive.
But according to Sebastian Dovey, managing partner of wealth management consultancy Scorpio Partnership, they need to spend less time moaning about it and more time working with regulators to communicate the benefits of the industry.
“It’s not good enough to sit back and say this is going to cost us,” he says. “We’re here now, we’re in this mess. We’ve got to try and manage our way out of it.
However, he thinks the market sell-off over the past two weeks has thrown up good value and said the Middle Eastern bank will look to raise up to $600 million for three Asia-focused funds next year. Kuwait Finance House is the Gulf third-largest lender.