It is likely very clear to members of International Man that most Western Nations are in a dire financial situation and desperately reaching for tax revenue. Nowhere is this more visible than in the European Union - where the end game of socialism is playing out - and the United States, where the bill for entitlement promises of past administrations has now come due.
The urgency to ensure that a country's residents are paying their tribute to the government has extended beyond squeezing the citizens that earn their income and hold their wealth inside a country's borders. The electronic ease with which money can be transferred and the availability of international investment options has attracted a large (and growing) group of investors to seek offshore locales to hold assets.
This makes those bloated high-tax bureaucracies of the West nervous, none more so than the United States, which is waging war on the so-called "havens" - with unfortunate consequences for those wisely looking to move their assets overseas.
And There is No Bigger Haven than Switzerland
In fact, it's Switzerland that has borne the (some would say coordinated) brunt of the developed nations hunt for those most dastardly of degenerates - tax evaders.
In 2009, the rift between the US tax authorities and Swiss bank secrecy laws slipped into full-metal jacket conflict. The ensuing quake has permanently re-shaped the banking landscape in Switzerland.
To quickly review events, the IRS and US Treasury accused the Swiss banking giant UBS of assisting thousands of its American clients in evading taxes. The US Justice Dept followed by lodging a criminal case against the bank that was closed in November 2010. Regrettably, the reaction from Swiss banks was the industry's refusal to accept US persons as clients. That is almost universally the situation today.
Two Back Door Ways into Swiss Banking For Americans
However, access to Swiss banking is still possible if US persons are willing to jump through a few extra hoops. It entails using a financial intermediary known as an Independent Financial Management Company (IFMC) or Independent Asset Manager (IAM). The procedure is straightforward: The US client would establish an account with an IFMC/IAM, who would then open a banking relation in the name of the client.
As you would expect, there are advantages and drawbacks to using this structure.
One big plus is that the client, through the IFMC/IAM, would have access to a wide range of financial and investment products not available from a bank, as well as professional investment advice tailored to the client's goals and risk tolerance.
The drawback - and it's a big one - is that most IFMCs and IAMs have high investment minimums, typically in the US$500,000 range. But the high minimum makes sense. Trading, account, and administration fees in Switzerland are well above those charged in the US. As a consequence, small account holders would get stung with high client fees when figured as a percentage of assets under management.
But, for the right investor, this is a fairly straightforward way to benefit from more than 300 years of what we know as Swiss banking.
Another option for US investors to consider when seeking access to Swiss banking is an annuity. Typically, one can gain access to an annuity for as low as a $50,000 minimum investment (such as one of our preferred suppliers, BFI Capital, is able to provide to American clients).
Swiss annuities have earned a reputation as being as solid as the rock of Gibraltar, and deservedly so: no Swiss insurance company has ever declared bankruptcy.
As well, Swiss insurance companies are not banks and most will currently accept Americans as clients.
Over the years, Swiss annuities have evolved into flexible investment vehicles that bear little resemblance to the product's humble beginnings. Today, a variety of products are available that combine the services of private banking with the Swiss annuity concept, all part of the industry's continuous innovation. This new wealth management offering is often referred to as "private banking insurance".
Yesterday's traditional road to a Swiss bank account has changed, and will likely face further course corrections as planned US reporting requirements are introduced or implemented in the years ahead. For those delaying moving assets to Switzerland due to new roadblocks, I have covered two detours that should be considered. And with the uncertain future of access to international financial options, action must be taken sooner rather than later.
[Another way to move your money overseas is through the use of an international broker. However, it will take some serious effort to find a service that is reputable, trustworthy and, for many readers, one that will accept American clients. Or, if you prefer to save some time, you can just download our two International Brokers reports at no cost directly from the International Man Members Area. If you are not yet part of our network, claim your free membership here.]
