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“Singapore is becoming the outsourcing centre for family offices and wealth management – a successor to the Swiss”

STEP Asia conference held in Singapore late last year, and both are excited by the potential.

Getting a foothold

It makes sense. The Channel Islands can offer fresh products and a wealth of financial experience to the region. Singapore’s trust industry lacks the experience and the legal footing of the Channel Islands, for example, and the HMRC withdrew its QROPs provision in 2008, for tax reasons.

Jonathan Rigby, Managing Partner at law firm Mourant Ozannes, points out that it is exactly this expertise and knowledge the company has that is leading it to consider the financial city-state. “If we were to do anything with Singapore it’d be taking our Channel Island, European and Cayman products and

offering them out there,” he says. “It’s a huge potential market for our main products.” But is it going to work? Surely the likes of Singapore are far better suited than the Channel Islands for grabbing those Asian spoils – not just geographically, but culturally and linguistically too? The reality is that the islands have no choice but to get involved, regardless of the competition. Prospering simply comes down to innovation. “Asians won’t want to keep all their wealth in one centre,” says Geoff Cook. “And if we’re part of that global village then we’ll benefit.” There is, however, a caveat. Patel grew up in Hong Kong, and offers a stark warning against wandering in blind to a business environment you don’t fully understand. “The danger is you go over there, give them

knowledge built on 50 years of experience, and they take it and do it without you. It’s like Sony Walkman in the 1980s – just take it apart, see how it’s done, and build it cheaper or better yourself. Singapore can do both at the same time.”

Patel recommends the Channel Islands embark on considered joint ventures with local Asian companies. “Go it alone and it may start OK, but it’ll be over quick,” he says. Even with such words of caution, it is clear that Singapore is a tempting way into that soaring Asian wealth, and the Channel Islands will need to move quickly in order to get their piece of the pie. n

DAVE WALLER is a freelance business journalist

The Switzerland of the East

ONE MAN’S loss, they say, is another’s gain. And it looks like that maxim applies to financial jurisdictions as much as anything. Switzerland has long been the haven of choice for anyone looking to stash their cash away from prying eyes. But the recent crackdown on Swiss banking privacy has sparked an exodus – and Singapore is mopping up.

In 2007, the US Justice Department began a criminal investigation

into UBS and other Swiss banks for their role in helping rich Americans evade tax. UBS paid $780 million last year to settle the case. But it would cost Switzerland far more than that – UBS forewent its banking secrecy, disclosing the names of 4,450 American clients to the IRS. Now, with the veil lifted on Swiss practices, its banks were left clamouring for the exit. Singapore, meanwhile, has been laughing. Swiss-pedigree banks have headed there in their droves, serving Asian clients, and Americans and Europeans looking for a new haven for their wealth. Singapore now handles about $500bn in private banking assets. And that’s no passing trend. Credit Suisse says new assets coming into the bank from rich clients in Asia will grow more than 20 per cent a year, while Swiss private bank Julius Baer calls Singapore its second home, and has even started holding its board meetings there. Switzerland is still the king of wealth management, handling about $2trn of undeclared offshore riches. But Singapore may well have pitched its secrecy just right – its laws protect the privacy of legitimate investors, but allow foreign authorities access to banking information where crimes are involved. How efficient.

34 December 2010/January 2011

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