Setting up a Swiss investment account using an asset manager can offer incredible benefits that we have previously discussed in one of our blogs (The Benefits of Swiss Asset Management for Americans). While the benefits of asset protection, wealth structuring, increased privacy, and diversification can be an excellent solution for American investors, it is valuable to understand the details of what is needed to establish an account. Knowing the process and what it entails will help you be prepared to begin the process should you take advantage of the benefits offered by the Swiss financial jurisdiction.
Before we jump into the process details, you can learn more about what it is like working with a Swiss independent asset manager by reading our blog here: Working with an Offshore Registered Investment Advisor
While asset managers do a fair bit of marketing, they are not often the parties that initiate contact for starting the process of connecting with the client. Therefore, doing your due diligence is a key part of establishing a Swiss investment account. First is researching the asset management firm you wish to partner with. An excellent place to start this is by checking out their website, which can act as a good platform to learn more about who they are and their services. On their website, you should be able to find their ADV 2a brochure, a vital piece of the due diligence process (learn more here: What is the ADV Brochure and how can you use it to your advantage?). Then taking the time to check out their social media sites will be a place to better understand their company's personality and get to know the individuals that make up their team. Once you have a good feeling about the firm, you are interested in reaching out to them via email or a phone call can be a great starting point to get even more detail about what they can offer you. It will also allow you to interact directly with the company and its team members personally, allowing you to understand better how they treat their clients.
It is a good idea to compile a few questions for the company as your research who they are and what they offer Americans. For example, some good questions might be: Will the account be held in a private bank with an SEC license? Will I have access to my account at all times? What kind of investments do you focus on? Etc... By doing this, you can better assess their ability to work with Americans and understand the needs and desires that you have as a client.
If you want to learn more about questions to ask in the due diligence process, you can check out our blog post on: What to ask when selecting a Registered Investment Advisor.
What Documents Are Needed To Start
So now that you have decided to move forward with a Swiss asset manager, what will you need to do to establish an investment account? The good news is that you do not have to travel to Switzerland to establish an account; it can all be done via virtual communication. To start the account opening process, you will need to provide a notarized passport copy, your residential address, a resume, some details about your financial situation, and a source of funds document. With these documents, the asset manager can work on your behalf to get all the documentation from the custodian bank for you to open an account.
The notarized passport copy is for the bank to confirm that the account is for a natural person and that this person is signing all the documents. It is important to note that a notarized passport copy must be provided for all parties connected to the account. So if it is a joint account, both owners must provide a passport copy. The case is similar to accounts set up for trusts, LLCs, foundations, and IRAs. Further, if you set up a power of attorney on the account for a third party, say your child, they will also need to provide a notarized passport copy.
Providing your residential address is pretty straightforward as it allows the bank to have the correct information about where you live and where correspondence information can be sent if necessary. The resume will give the bank a picture of who you are and how you have developed your wealth over time. Since you are not in person, it presents a fuller picture of who you are to the bank as a client. The details on your financial background are often done on an Investor Profile or Know Your Client form. It asks questions about your marital status if you have children, how you made your wealth, and your knowledge of investing in the different market sectors. This information allows us to better understand you as a client and what level of knowledge you have when it comes to investing. The Source of Funds document--often an old tax return or paystub--is used to show a record of how the finances were generated. With financial regulations in the US and Switzerland requiring the financial service provider to have evidence that their clients are not laundering money, these documents help to show a clear picture of how the funds to be held in the account were generated.
An example is if a school teacher in her late forties wants to open up an account with $5 million but has a salary of $45,000 a year, it would be hard to explain how she accumulated this wealth. But with a Source of Funds document--certificate of inheritance--showing she received the wealth from her aunt, who was a real estate mogul, the wealth would be easily explainable.
Once the initial documentation is given to the bank, they prepare the account opening document set and pass it on to the asset manager who works with you to complete it. Often the documents are sent to you by email and will need to be printed out to be signed. While there are a good amount of documents to sign, they are all provided in English. The asset manager works with you to ensure you understand all the documentation answering any questions you may have about them. Once the documents are completed, they will need to be sent by mail back to the asset manager, who will present them to the bank. Once the bank has the original signed documents, they will do their compliance check, open the account, and make it ready to receive the funds. Finally, the asset manager will inform you of the good news and schedule a meeting to discuss how to build your portfolio.
As you can see, there is a lot that goes into establishing a Swiss investment account. The process is straightforward, but having an experienced professional partner to help you through the journey can make it much more efficient. In the end, working with financial professionals comes down to building trust, so it is important to ensure you are comfortable with the partners you choose to help you fulfill your financial goals.
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