Rising interest rates: a threat ?

Rising interest rates have been a worry for investors for the last couple of years, without that fear actually manifesting itself in market movements. We have seen interest rates on the rise this year, as was to be expected from the historically low – and in many cases negative – levels. An overview.

Especially in the US, where 10-year yields moved from 2.40% at the end of 2017 to 2.86% by the end of May, with an intermediate high of 3.11%, meaning an amplitude of +0.71% at the most, we saw some volatility but the trend is clear and might not be finished either: up! The market indeed sees 3 to 4 more hikes by the Federal Reserve in short-term rates, and these clearly have their influence on the expectations surrounding long-term rates, even if part of the rise on the short-term rates is lost in a considerable flattening of the curve (i.e. a shrinking difference between short-term and long-term interests). Most investors in US debt seem to be positioned in quite short duration assets or floaters that might even profit from gradually climbing rates. Benchmarks, which traditionally tend to have quite long average duration, have suffered more than real portfolios it would seem.

It’s a different picture in core Europe: 10-year yield on the German Bund started the year at 0.43%, had an impressive climb up to 0.77% by early February, before coming back down more slowly to levels between 0.50% and 0.60%. By the end of May, mainly driven by the flight to quality over Italian political turmoil, it dropped steeply and actually ended the 5-month period we are considering here lower than it started, at 0.34%.

As they are used by quite a few portfolio managers for the sake of yield enhancement, we should of course also take into consideration the so-called “peripheral Europe” bond markets, mainly represented by Italian government bonds. The 10-year yield on those BTP’s (Buoni del Tesoro Poliennali – multi-annual treasury bonds) followed quite a different path: starting the year at just over 2%, it was actually pretty stable until mid-March, when it started declining to reach a low of 1.72% by mid-April. From the second week of May, politics took over the agenda and 10-year rates skyrocketed to 3.16%, finally ending the month of May at 2.80%.

Just to be complete: Japanese government bonds, although an enormous market in size, are only very scarcely used by our main portfolio managers, because Japanese yields are really microscopic. The 10-year rate was at 0.05% to start the year, it “shot” up to 0.10% by the end of January before falling again to 0.04% by the end of May. Not exactly an interesting asset for non-JPY investors.

So, what then has been the influence of these interest rate fluctuations on an actual client’s portfolios ? We have looked into the top-8 of flexible funds in our external fund range to get a diversified view on what different types of allocators and flexible managers did over the first 5 months of the year.

What do these figures, and specifically the timing of Highs and Lows, teach us about the correlation with interest rates ? Well, it would look like there is an almost negative correlation between most flexible funds and Bund prices, despite their portfolios often being mainly invested in bond type assets.

The peaks by the end of January (6 out of 8 funds) coincide with the highest 10-year Bund yields observed since the beginning of the year. This is probably the result of extreme confidence in the markets, making slightly higher interest rates positioning by the Central banks more likely because they consider the economy can take it without too much trouble. Whenever this risk appetite drops, for whatever reason, we see 2 phenomena: markets thinking Central banks might go slower on rate hikes to avoid cooling off the economy, plus a “flight to quality”, i.e. investors taking money out of stocks and into safe havens like German govies. Both will drive yields down.

Portfolios however are not invested like the bond benchmarks today: we see a lot more credit risk, both on corporates and on peripheral govies than in standard government bond benchmarks. And duration looks completely different too from that on the core European government debt market, with nobody really daring to be invested far out on the curve, where a slightly wrong estimation on the direction of rates can have painful consequences.

One area where some funds mark quite some correlation is unfortunately the Italian debacle on political turmoil end of May. Some of our French investment partners had their funds quite heavily exposed to Italian spreads, resulting in portfolios dropping in the last two weeks of May. This came on top of equity markets globally losing out on the Italian nervousness as well.

As a conclusion, we might say that even for portfolios with a maximum of 50% equity exposure, performances today coincide a lot more with equity indices than with bond benchmarks. The fact that managers won’t hold long duration core European government bonds like they used to do 10 years ago on the one hand will protect from the negative impact of rising rates going forward.
On the other hand, portfolios will not benefit from the same “risk dampening” they used to show when risk assets, including credits and peripheral debts that now seem to make up an important part of non-equity pockets, will suffer from increasing risk aversion in the markets.

So far it would seem managers with the highest risk budget in terms of volatility have had better returns by actively timing their risk allocation, but one does need a strong stomach to endure much higher volatility and temporary draw-downs. The more cautious risk managers, relying more on the non-equity part of their investments might be in for a hard time to put down good returns in choppy markets, especially when short-term nervousness shakes up both parts of their allocation.

For more information on investments, please contact us.

Ruben De Roover

Choose Life. Choose Luxembourg.

Life insurance companies too have found their home in Luxembourg and specialise in life policies linked to investment funds, products that offer clients the combination of life cover and the prospect of financial returns. Life assurance contracts are often linked to dedicated funds, instruments that are increasingly favoured in the wealth management industry today.

Luxembourg is the premier private banking centre in the Eurozone and the second largest fund centre in the world. Its social, economic and political stability makes it an ideal hub for both private and institutional investors from all over the world.

With flexibility and geographic portability key features of a life policy, it is an ideal way for HNWIs and their families to manage preserve and transfer wealth across generations.

With its cross-border leadership on the European scene and extensive expertise, Luxembourg offers unrivalled support in developing global solutions covering multi-jurisdictions while anticipating potential mobility of clients in the future.

In addition, Luxembourg unit-linked policies embed a full range of traditional and non-traditional assets from equities, bonds, money market instruments to real estate, private equity, derivatives, and securitisation. These enable clients to achieve fully-customised strategies in terms of both protection and returns in these days of negative interest rates.

Luxembourg provides maximum security through its life assurance policyholder protection regime. The cornerstone is the legal requirement that all clients’ assets are held by an independent custodian bank approved by the Luxembourg State regulator, the Commissariat Aux Assurances (CAA). This arrangement is known as the Triangle of Security and ensures the legal separation of clients’ assets from the insurance company’s shareholders and creditors as well as a ‘super-privilege’ giving the policyholder first priority in case of default. This protection framework is a criteria for European clients as well as for an increasing number of international clients who may come from less stable countries and who are looking for more secure jurisdictions.

Combining international expertise, protection and flexibility, Luxembourg clearly offers multiple advantages to international investors looking for sophisticated financial and inheritance planning solutions in a transparent and secure environment.

Watch out our latest video to view the multiple advantages of Luxembourg life assurance solutions and how OneLife can help you.

#Success in #Succession – Part II – Managing Succession For Expatriates

According to our research, 60% of high-net worth individuals from the UK have a plan in place for the succession of their finances. Despite the expatriate status of the Willems family, who are originally from Belgium, they are no different.

Although they have settled into life in the UK over the past years and have even begun to view it as a home away from home, recent waves in politics have caused them to reconsider.

Now with Britain’s imminent departure from the EU, they are exploring their options when it comes to creating a life assurance policy which has integrated succession planning. However, creating a plan that protects all parties involved and has cross-border capabilities can be a tricky undertaking. Complexities involving tax and domicile status throw curve balls at what should be a smooth sailing planning experience.

Existing – Meet the Willems family! Meet Belgian expats Andreas, aged 57 and Angela, aged 55. The Willems lead a comfortable lifestyle in the leafy suburbs near London after moving there 12 years ago with their two children, Conran aged 18 and Chloe aged 16.

With the advent of Brexit and the uncertainty that brings, they are starting to consider what the future might hold. Changes to residency rules in the UK are also an important factor which they need to take into account. Andreas and Angela want to ensure that as successful professionals, they can maintain their lifestyle and provide for their children’s higher educational needs as they reach university age. With a Luxembourg life assurance policy and the flexibility that brings, they can be sure that their wealth is protected and transferred to the next generation efficiently, even if they were to relocate to another country.

How? A number of benefits come into play centred around

1. Tax Efficiency – taking out a Luxembourg life assurance policy before becoming domiciled in the UK means is an efficient in terms of inheritance tax (IHT) planning.

2. Portfolio Advice – a Luxembourg policy allows for the holding of a wide range of pooled investment vehicles such as UCITS funds. This gives the Willems the opportunity to hold a diversified investment portfolio as part of their life assurance contract, allowing them to choose their risk profile and switch easily between a wide range of investment funds.

3. Joint Subscription – if both Andreas and Angela subscribe the life assurance policy, they can rest assured that the surviving spouse remains protected in the event of death of the other spouse. In the case where there is no will or the will is void in their new country of residence, this provides peace of mind for the future.

4. Portability of the life assurance policy – OneLife’s team of experts has long experience in assisting clients to manage their wealth in a secure and efficient way. Even when it comes to single or multiple relocations to other countries during the life of the policy, it remains compliant cross-border and flexible enough to take into account the changing needs of the policyholders.)

Discover it all through this video

Each family situation is unique which means that the life assurance policy also must be able to take into account the special circumstances and needs of those involved. With more people than ever relocating to live and work in other countries, factors like cross-border portability are all important. And as family situations become more complex with children also often moving abroad to study and work, finding a wealth planning tool which is flexible enough to evolve around family members’ needs is key. A Luxembourg life assurance contract is an ideal way to protect, manage and transfer wealth in a safe and efficient way.

= > Click here to find out what the OneLife solution is for the Willems family!

Source: OneLife & Scorpio Partnership

More than a game, a cultural experience

When it comes to sports, football is the most famous in Europe. The game is deeply rooted in daily life and cultural habits of several countries like England, Portugal, Spain, France, Germany, Italy and the list goes on. Rumour has it that even Queen Elizabeth II in her teenage years used to disguise herself in order to participate in football matches played near Buckingham Palace.

European colonists and expats have given football a widespread reach that has made it the world’s most popular sport by far. Nowadays, millions of fans around the world follow European championships. The biggest reason for that is the fact that Europe is home to the most prestigious professional football leagues, and the best players in the world fight for a spot on their teams.

In the last two decades, football has become a multi-million euro industry. The globalisation of the game has made international players increasingly in demand by teams all over the world. In hopes of getting an early glimpse at future stars, European teams are sending scouts abroad to find exportable talent while they are still teenagers. Likewise, local teams are signing kids and willing to keep them until their value increases and they can be sold to European clubs. As a result, Europe ends up welcoming many international football players who are likely to be well remunerated and in need of further advice to structure and manage their wealth.

Wealth management and the peculiarities of a professional football player

The particular situation of a professional football player requires a different approach. The mix of high salaries, young age and usual lack of financial education given focus on the game result in a false sense of financial security and high expenditures. This combination of factors can be even worse when you take into consideration that few professional players earn six-figure monthly salaries. Due to early retirement in this business, athletes need to plan and save for the future in order to avoid financial troubles after retirement.

On top of that, international mobility is the rule in an ever more connected world and those athletes end up moving to different places before retiring and going back to their home country. Thus, advisors need to evaluate which is the best tool to consolidate, protect and invest their international wealth, as well the tax and legal challenges they might face within the different jurisdictions they end up living in throughout their careers.

A versatile wealth structuring solution

When dealing with the future of international football players, stakeholders within the industry must be aware that a holistic approach is essential. This is especially relevant after having this niche of clients caught up in accusations of tax fraud and other financial crimes in Europe during the past years. A robust and compliant tool must be chosen and a portable solution is necessary due to their regular moves. Hence, life assurance has seen a growing demand from this community as advisors learn about the product and its benefits for wealth management and asset protection.

Life assurance is a structure fully recognised and compliant in Europe, usually enjoying a favourable tax treatment as it forces individuals into a savings regime. It is also used as a powerful tool to consolidate and transfer wealth. This dynamic product can provide cross-border flexibility and unique security of a contract made in a top-investment jurisdiction such as Luxembourg, which is protected by a rigorous regime known as the Triangle of Security. Besides, Luxembourg offers tax neutrality, with taxation based on the policyholder’s country of residence.

In terms of taxation, this product usually offers full tax deferral until surrender and tax-free death benefits depending on the country of residency. In terms of succession, a life assurance policy can protect both spouses if one predeceases the other and facilitate an eventual cross-border inheritance procedure. Additionally, the beneficiary clause functions as a will and the policyholder is able to change beneficiaries at any time. Apart from that, death benefits arising from life insurance policies are usually not deemed as part of the deceased’s estate in most countries. This facilitates transferring wealth to beneficiaries in case of death, as the settlement period should not exceed 30 days from the date of receipt by the insurance company of all the documents necessary for payment.

In addition, contracts can be tailor-made to offer portability whenever international football players relocate to different jurisdictions during their career. In case of a move, a thorough analysis must take place before proceeding with any contractual changes necessary to obtain legal and tax recognition of the policy at the destination country. At the same time, such changes must respect the initial objectives of the policyholder so the solution remains appropriate and efficient.

This tool may also offer a flexible and wide range of underlying assets, such as external and internal collective funds, as well as dedicated funds that allow discretionary management according to the policyholder’s personal objectives. Another interesting feature is that such solution allows clients to withdraw at any time a portion of their original investment if needed. It also gives the possibility to keep the same investment manager and custodian bank for the underlying assets during the policy lifetime.

In summary, life assurance might be the best option for international players living in Europe to structure and manage their wealth. At OneLife, we promote research into the challenges that lay ahead in dealing with professional football players’ finances. By supporting this initiative, we strongly desire to make stakeholders within this industry aware that a sophisticated approach is imperative to succeed when dealing with the future of football players. We cannot wait to hear from you!

Author: Taïza Ferreira

Luxembourg’s maximum-strength policyholder protection

One of Luxembourg’s most important benefits as a domicile for life insurance products is its policyholder protection framework, one of the strongest in Europe, which is designed to offer clients peace of mind that their assets are safe no matter what happens to the insurance company, or the bank where the assets are held.

Luxembourg’s insurance policyholder protection regime is popularly known as the Triangle of Security. It requires all assets linked to life insurance policies to be held at an independent custodian bank approved by the industry regulator, the Commissariat aux Assurances, and remain legally ring-fenced from the assets of both the insurance company and of the bank itself.

The Commissariat monitors all insurance companies under its supervision to ensure they maintain legally-mandated solvency ratios. But even in the unlikely event of an insurer’s bankruptcy, the assets held at the depositary bank on behalf of clients or beneficiaries remain protected in separate accounts.

If an insurance company gets into financial difficulty, the Commissariat can freeze the accounts, ensuring that no transaction can be carried out by either the insurer or the bank without its authorisation.

Policyholders enjoy preferential rights to the assets of the separate accounts known as a Super Privilege, which places their claims above those of any other creditors of the insurer. In addition, whereas in most EU countries the Super Privilege is limited to the first €100,000 of an individual’s assets held at a particular bank, in Luxembourg there is no upper limit to the protection enjoyed by insurance policyholders.

In addition, policyholder assets are protected against seizure by creditors, which cannot exercise the policyholder’s rights to surrender, take a prepayment or pledge the policy, nor compel the client to do so. Creditors cannot seize the policy itself because it is the property of the insurance company. The only exception is where premiums paid into a policy appear clearly excessive with regard to the individual’s financial position and wealth.

Legislation due to be adopted in Luxembourg during 2018 aims to strengthen policyholder protection even further, by aligning the Super Privilege rights directly with the assets attributable to their policy, rather than the insurer’s portfolio as a whole.

Contact us to learn more about how Luxembourg life insurance policies offer the maximum protection for policyholders, wherever in Europe they may be.

Safe. Flexible. Portable.

Latin America – a region with a future

Latin America is home to some of the world’s fastest growing economies. Entrepreneurs thrive in this area of the globe that boasts rich natural resources, a burgeoning tourist industry, a history and culture of envy, an open-minded and dynamic approach to international business. It is therefore not surprising that along with this sort of wealth creation comes a certain amount of complexity: to help ensure that wealth is managed propitiously, that solid inheritance planning is in place, that wealth works in a secure and flexible way for both wealthy individuals and their families in order to help them maintain their lifestyles and make further investments for the future.

At OneLife, we are committed to the Latin American region. In 2017, we added Latin America to our already well-established markets in Europe as an area of high potential in terms of business growth, one of the few Luxembourg life assurers to do so. We identified the added-value for Latin American individuals and their families of using life assurance solutions as a means of protecting, managing and transferring their wealth in a safe and flexible way.

Spain and Portugal, collectively known as the Iberian peninsula, are key markets for OneLife which, with their far-reaching links to Latin America and the ever-increasing mobility of individuals moving between the new and old continents, are important jurisdictions when addressing the needs of Latin America clients. With solutions provided through OneLife’s Wealth range, Wealth Portugal and Wealth Spain are products which can be tailored to the specific needs of clients with a totally personalised approach to investments, non-traditional assets and cross-border opportunity.

On the road, spreading the word

In March and April, OneLife’s team of Iberian and Latin American experts, in close collaboration with some of the most renowned international legal firms, conducted a number of roadshows with the aim of both explaining the advantages of Luxembourg life assurance for clients who reside in these regions and showcasing OneLife’s credentials in offering robust solutions for this clientele. Starting in the international banking centres of Switzerland and Luxembourg and finishing in Portugal and Spain, OneLife and its legal partners were able to demonstrate the appeal of life assurance as an effective wealth planning tool for internationally mobile high net worth clients and their families.

According to OneLife’s Chief Commercial Officer, Wim Dieryck:

“Spain, Portugal and Latin America are all important markets for OneLife. With the increasingly mobility of families, the complex situations which can arise when members of the same – or recomposed – families reside in different jurisdictions, the wide diversity of assets which the wealthy now hold – all this means that asset management has to evolve and embrace a holistic approach. Life assurance is an ideal solution to respond to this complexity, helping internationally families to manage, protect and transfer their wealth in an effective and flexible way.”

Closer to home – the benefits of life assurance for French residents and their families

In addition to being market leader in Belgium, OneLife is firmly committed to serving (U)HNW clients and their families in France providing them with the benefits of a Luxembourg life assurance policy as a robust and flexible wealth management tool. We recently announced the launch of the first 100% digital Luxembourg life assurance contract for France through our collaboration with one of the leading French FinTech companies, Advize. Independent Financial Advisers in France will soon be able to subscribe a Luxembourg life assurance policy from OneLife for their clients via a complete end-to-end digital on-boarding process.

First “Matinée d’Affaires” event held in Paris

A first event took place on 12^th April in Paris, gathering a panel of well-known speakers for a morning of insights and debate:

Benoist Lombard, President, Chambre Nationale des Conseils en Gestion de Patrimoine (CNCGP) and President of Witam Multi Family Office
Philippe Parguey, General Director of Development, Nortia, and,
Marc Stevens, CEO, OneLife

The discussion started with an overview of Luxembourg’s investor protection regime, one of the most robust in the EU. Through the Triangle of Security and the notion of ‘Superpriviledge’, investors are fully protected in Luxembourg when holding a life assurance policy in the case of bankruptcy or other failure of the insurance company.

Marc Stevens indicated:

“Wealthy, international families are very mindful of risk and what it means for their wealth. That means that they carefully consider the aspects of a life insurer’s solvency and liquidity. Professional secrecy and data protection are also important factors which families are sensitive to”.

Benoist Lombard added that:

“In the case of bankruptcy or failure of the insurance company, the regulatory authority in Luxembourg ensures that the assets are returned to the policyholder … This protection is the ultimate guarantee. It’s also up to the client – and his intermediary – to study other elements such as the insurer’s solvency ratios”.

‘Portability, simplified’ was the second subject of the morning explaining the increasing mobility of financial assets in an ever-evolving regulatory and digital context.

Marc Stevens said:

“Portability is centred round the local laws in force within the client’s country of residency. Any move from one jurisdiction to another therefore can have a consider impact on how a life assurance policy is treated from a legal, tax and inheritance perspective. But do partners have the ability to follow all their clients as they move across the world? To be able to do that, they have to have the necessary controls and expertise in place.”

On the subject of IDD, Philippe Parguey commented:

‘In Europe, IDD will allow a policy to be more easily transferred between one intermediary and another. It will also be of interest in allowing the transfer of accumulated savings from one life insurance company to another’. He went on to say: ‘And, still on the subject of policy transfer: in the case where we will have transfers of clients to intermediary companies with whom we don’t yet work, then we will need to put in place a distribution agreement’.

The final theme of the morning was wealth transfer in a cross-border context. With more and more individuals and families moving abroad, how can wealth be transferred successfully taking into account often complex situations and a multi-jurisdictional approach?

Marc Stevens continued:

“Digitalisation provides the opportunity to create optimal interaction between the partner, his client and the insurer. This ‘communication triangle’ can work quite spectacularly, especially when supported by internal processes. Digital tools allow us to be more efficient, to avoid errors and to provide total transparency to the client”.

For further information, follow us on LinkedIn!

Iberia/Latam roadshows in Zürich, Geneva, Luxembourg: highlights – Part II

OneLife organised a series of events in March in Zurich Geneva and Luxembourg to showcase OneLife solutions for Iberia and Latin America. We were privileged to collaborate with some of the best lawyers from Mexico, Peru, Colombia, Portugal, Spain and Brazil.

During these events, there was a panel especially dedicated to opportunities and challenges faced in Brazil when it comes to holding a foreign life assurance policy, as well as the use of such a product as a cross-border solution for Brazilians relocating to Portugal. Other panels included cross-border opportunities in Portugal, due to the increasing number of expatriates moving there in the past few years due to the Non-Habitual Resident (NHR) Regime.

Brazil

Priscila Stela Mariano da Silva from Pinheiro Neto law firm in Brazil and Filipe Romao from Uria Menendez law firm in Portugal composed the Brazilian panel. The discussion was kicked off by Priscila explaining that, as a rule, individuals domiciled in Brazil are not allowed to purchase and directly hold a foreign life insurance policy.

Bearing in mind this general rule, the panel then discussed that these restrictions should be specifically imposed on individuals and legal entities resident/domiciled in Brazil. Thus, based on the territoriality principle of Brazilian law, they could not prevent foreign companies from buying insurance coverage from foreign insurance companies even if some of the risks are located in Brazil. Under these circumstances, it would be feasible that an individual contracts a life insurance policy whilst tax resident abroad and before moving to Brazil. Similarly, it would be possible to purchase a life insurance policy by a private investment company covering risks related to individuals resident in Brazil.

Moreover, Filipe highlighted the growing interest of Brazilian nationals moving to Portugal in the past years and the fact that those individuals would be able to then contract a life assurance policy as Portuguese tax residents. Filipe also drew our attention to the fact that many Brazilians moving to Portugal still hold off-shore structures in tax havens due to the lack of strong CFC and transparency rules in Brazil. However, he warned that holding such structures would be very problematic in Portugal, as any payment arising from these jurisdictions to Portuguese residents would be heavily taxed (35%). Therefore, these clients must seek tax advice before they relocate in order to assess if those structures should be re-domiciled or dismantled.

Portugal

Sara Zad from Carnegie Investment Bank in Sweden and Marta Duarte from Cuatrecasas law firm in Portugal participated in the Portuguese panel and discussed cross-border opportunities related to Swedish nationals moving to Portugal.

Sara provided input about the legal and tax framework of a life assurance policy in Sweden and shared with us her experience with Swedish clients moving to Portugal, such as the profile of clients that tend to consider Portugal as their new tax residence jurisdiction and their usual type of asset/investment portfolio. She also mentioned that in light of recent international tax developments such as BEPS and CRS, Swedish clients are favouring life insurance policies over Trusts and other offshore structures.

Finally, given the growing interest from expatriates in moving to Portugal due to the NHR regime, Marta presented the main features and framework of the regime, as well as how a foreign life assurance policy would be treated under this tax regime and what clients should take into consideration before moving to Portugal.

We would like to thank all our partners who attended this event as well as our panel of international speakers.

In case you were not able to attend our roadshows and would like information about the opportunities in Iberia and Latam, do not hesitate to get in touch with us. We hope to see you at our next events!

Taïza Ferreira, Senior Wealth Planner for Latam markets, at OneLife

Gonzalo Garcia-Perez, Wealth Planner Manager for Iberia and Latam markets, at OneLife

Read “Iberia/Latam roadshows in Zürich, Geneva, Luxembourg: highlights – Part I” => Here!

Savvy And Wealthy Entrepreneurs

In our latest research, we surveyed 770 high-net-worth individuals to gain insight into their views on relocation – and for those who choose to embark on this exciting journey, we explore their motivations and concerns around moving.

Our findings uncovered a not-so-surprising profile of HNWIs – that is, Entrepreneurs. These are business savvy professionals who are their own bosses, wherever they go!

While they view relocation as an opportunity to improve their career progression and live in a country with a better climate, their decision to move is most driven by a desire for a better lifestyle. Entrepreneurs do not take the subject of relocation lightly with 22% of them turning to their wealth or financial advisors for expert advice to guide their transition to a life further afield.

To learn more about the different types of HNWIs who have launched or are planning their relocation journey, download our e-Book here:

The Cross-Border Entrepreneur

Wealth managers are perpetually adapting to meet the needs of Entrepreneurs operating within their own jurisdiction. For this reason, providing the right solutions for Entrepreneurs working cross-border can be even trickier. High-net-worth (HNW) individuals require bespoke cross-border expertise from their financial provider. Notably, our research shows that tax advice is the second most important component of an international wealth management proposition (46%).

However, beyond professional guidance these individuals look for a wealth manager they can trust; of the business owners surveyed, 37% chose a new advisor abroad based on a recommendation from a trusted friend or advisor.

Keeping up with the needs of HNW relocators is crucial for wealth managers to remain relevant. HNWI’s jurisdiction might change but their need for quality advice does not. By understanding these various personas firms can adjust their proposition to tailor their solutions accordingly.

Download our e-Book to learn more by clicking on the picture below !

Iberia/Latam roadshows in Zürich, Geneva, Luxembourg: highlights – Part I

As you may already know, OneLife organised in March an IBERIA/LATAM roadshow in Zürich, Geneva and Luxembourg to showcase our solutions for these regions with great success! As described in our communication on March 16, 2018 and also shared on LinkedIn, OneLife was privileged to partner with some of the best lawyers from Mexico, Peru, Colombia, Portugal, Spain and Brazil.

For Iberia, the most reputed lawyers specialised in tax, legal and regulatory matters involving life assurance in their respective jurisdictions duly represented Spain and Portugal in the different panels.

Spain: Political & fiscal context

On the Spanish panel, Javier Seijo from EY started by introducing to the audience the political and fiscal context in Spain, focusing notably on the potential political measures which could if adopted modify the Spanish Wealth and Inheritance/Gift taxation landscape. Indeed, it was mentioned how some Spanish Autonomous regions had recently implemented different changes in their taxation and others were planning to do so in the near future.

Benefits of using life assurance for wealth planning purposes

In the second part of the panel, Enrique Lopez de Ceballos from Eversheds, Carlos Ferrer from CuatreCasas and Fabricio González from Anaford spoke about the different benefits and advantages of estate and wealth planning through the use of unit-linked life assurance products in the Spanish market. Amongst other points, it was highlighted that life assurance could be used as a flexible succession-planning tool, that it preserves the confidentiality of the policyholder and the beneficiaries and that it enables the policyholder to protect his wealth in case of unforeseen circumstances (insolvency, divorce…).

On the fiscal side, the tax treatment of life assurance for Spanish resident policyholders was duly described in terms of Income Tax, Wealth Tax and Inheritance and Gift Tax. In this context, special reference was made to the recent rulings issued by the Spanish tax authorities on Wealth Tax applied to unit-linked life insurance products and which could open interesting planning opportunities.

Non-traditional use of unit-linked life assurance

In the third part of the panel, the speakers gave a brief overview of how unit-linked life assurance could be used in non-traditional ways. For instance, life assurance could be used as an instrument to vehicle remunerations to key managers or sportsmen or pensions to a given group of a firms’ employees.

Spain: Cross-border

On a final note, the speakers discussed the different planning opportunities for multi-jurisdictional and cross-border cases using life assurance and gave some examples of successful cases where they had acted as advisers.

Should you wish to obtain additional technical information on any of the above, we invite you to get in contact with Javier Seijo, Enrique Lopez de Ceballos, Carlos Ferrer or Fabricio González who will be happy to provide you with legal and tax assistance.

Portugal: Fiscal context

On the Portuguese panel, Joao Espanha from Espanha Associados and Filipe Romao from Uría Menéndez started by providing the audience with an overview of the fiscal context in Portugal, which for the moment remains rather attractive for HNWIs, compared to other European countries. Besides, the likelihood of new taxation measures approved by the Portuguese government and involving Wealth or Inheritance/Succession was deemed to be low in the short term as not present in the political agenda.

Benefits of using life assurance for wealth planning purposes

In the second part of the panel, Joao and Filipe commented on the different benefits of life assurance for Portuguese resident policyholders, for instance, flexible and efficient succession planning and protection of the financial assets from a financial and regulatory perspective (i.e. Luxembourg “Triangle of Security”). The fiscal treatment of life assurance unit-linked products was thoroughly discussed as well. Indeed, life assurance in Portugal benefits from an advantageous tax treatment (i.e. decreasing effective taxation when the policy is held over 5/8 years and no application of Portuguese Stamp Duty tax when the benefit of the policy is paid to the appointed beneficiaries).

Portugal: latest news & developments

The last section of the panel was dedicated to several “hot topics” such as (i) the recent regulatory changes which could affect the contribution in kind to life insurance products in the Portuguese market, (ii) the possibility to offer “self-management” to Portuguese resident policyholders and, last but not least, (iii) the tax treatment on redemptions from life assurance policies made by Portuguese resident policyholders. On all these topics, Joao and Filipe made clear that not all the local legal/tax practitioners had concurring views and that, possibly, the outcome could vary depending on the advisor, the policyholder as such and the insurance company offering the product.

Should you wish to obtain additional technical information on any of the above, we invite you to get in contact with Joao Espanha and Filipe Romao, who will be happy to provide you with legal and tax assistance.

Gonzalo Garcia-Perez, Wealth Planner Manager for Iberia and Latam markets, at OneLife