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 Working with an Offshore Registered Investment Advisor Thumbnail

Working with an Offshore Registered Investment Advisor

When selecting a financial advisor there are many options an individual can choose from, whether they be an asset management branch of a bank, a private investor, a family office, or an independent investment advisor both domestic or offshore.

Since we are based offshore we have already written extensively on why one might choose an offshore jurisdiction for financial services (Switzerland: Safe Haven during Crisis) and also how to choose a financial advisor (How to choose an External Asset Manager for U.S. Citizens). Both of those topics are important and worth spending some time thinking about. However, today we want to delve into what the benefits are of working with an independent registered investment advisor versus being served by the asset management branch of a larger bank.

It is important to note that not all offshore investment advisors are registered with the SEC. It is important for Americans to find an SEC-registered partner, as this is a clear sign that the company focuses on working with Americans. It will help you in the due diligence process and significantly enhance your chances of working with a capable partner.

An Independent Partner

Independence is one of the key elements of why people chose to work with an independent company versus an established bank. Independence allows the asset manager to put the client’s needs and desires first. Independent asset managers do not sell any products or place their own products in their clients' portfolios. It allows them to remain committed to selecting investments that will best serve their client rather than having a conflict of interest between their company's interests and yours. They usually only take a management fee for their services and do not charge fees for placing trades, nor do they receive third-party payments that could create a conflict of interest. And if they for whatever reason did receive money from another avenue than directly from the client they will have to disclose that information. 

Personalized Service  

Smaller companies are strongly focused on building long-lasting relationships with their clients. They see their clients as humans and are eager to learn more about their values, goals, hopes, and fears. Independent companies usually serve a much smaller group of clients (the ranges are usually between a handful and a few dozens) compared to larger banks where one relationship manager often serves hundreds of clients and has no other way than to treat them as numbers.

When working with an independent asset manager the client gets to know the relationship manager personally and the experience is individually tailored to each client. As an example, we at WHVP believe our clients should be at the forefront of our operational effort. We make sure that our relationship managers have a smaller client load with no more than 50 clients per relationship manager to better ensure that the client receives the best service possible. 

Access to the Owners

Independent registered investment advisors are often small family-owned and managed companies. This allows for the client to be connected directly with the owners of the company. This comes in handy when solving problems, or talking about questions, comments, and concerns, as they are brought to the attention of the owners very swiftly. This ensures that solutions can be found quickly and that there is a certain entrepreneurial approach to finding ways of working with each other. WHVP's clients have direct access to the owners because we want them to know they are taken seriously and that they can depend on the full effort of our company on their behalf. It helps to flatten the hierarchy and avoid the bureaucracy of ego that can persist in large banks. 

Continuity of Service

In corporations, people get hired, promoted, and fired on quite a regular basis. Every time an employee switches jobs you will have to start from scratch by building a relationship with your new contact person. With smaller companies, this is much less the case. Because of our emphasis on cultural fit when hiring, we have an incredibly low turnover rate. The founding generation of the company managed the firm for nearly 30 years and the new generation that has taken over a few years ago plans to stay at WHVP for the remainder of their careers. This is a benefit to the client as it means that our clients will be speaking and working with the same people when working with WHVP no matter how many accounts they have at a variety of banks. An example of this is if you were to directly establish an account with the bank and chose to switch to a new bank you would have to get to know a new relationship manager again. With us you would have the ability to switch custodian banks and still keep the same relationship manager, ensuring the trust you have built over time.

Financial Structure Diversification 

By finding an offshore registered investment advisor for a portion of your portfolio you can diversify both your investing and your wealth structure simultaneously (read more about that here: Risk Management: Understanding Diversification). Figuratively speaking you are not keeping all your eggs in one basket. It allows you to have a nest egg away from the political and economic turmoil of your domestic jurisdiction. This is an important piece of the benefits that Americans can receive when moving into the stable financial jurisdiction of Switzerland. It does not mean avoiding taxes, but it does mean adding a layer of privacy to your financial holdings. The Swiss banking secrecy act helps to keep frivolous lawsuits and pesky neighbors away from your financial information.

Choice of Custodian Bank

Independent asset managers set up contractual agreements with various private banks. Our clients get to choose from world-class private banks that we partner with within Switzerland, Liechtenstein, and Austria. As mentioned before, no matter what bank you chose or even if you decide to switch to a different custodian bank, your relationship manager stays the same. This allows you to gain an understanding of which bank might suit you best when establishing an offshore account as well, and it makes offshore banking more accessible due to the lower investment minimums rather than going directly to an offshore investment bank. Private Banks usually have a minimum investment of $1-3 million, and the fees on the account may be more advantageous when working with an independent asset manager due to the leveraging of the asset manager's relationship with the bank. 

Access to a Broad Network

Building a network of trusted business and financial partners takes time and due diligence. Lucky for you we have done that due diligence in building our network of business partners. Our clients also gain access to our network of lawyers, estate planners, trust firms, and consultants should you be in need of trusted partners to help you with your every financial need. Because we are specialized in offshore investing we have worked hard to build a broad network of business partners in Switzerland and the USA to allow our clients to find the solutions to their needs both domestically and internationally.

An offshore registered investment advisor can be a crucial asset to Americans as it allows them to build a global wealth structure and bring stability to both new and existing investment portfolios. Knowing what working with a Swiss asset manager is like is important so that you can begin to understand the process and value they can bring you as the client.

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