The Benefits of using an Offshore Independent Asset Manager

If you have the equivalent of US$500,000 or more to invest offshore, you qualify for the services of an offshore portfolio manager.

Why not just use a domestic portfolio manager? By using an advisor outside your own country, you gain a practical degree of financial privacy and asset protection. Someone considering suing you may decide to find a target with more visible wealth. These advantages increase if your portfolio manager resides in a country such as Switzerland that jealously guards its sovereignty and also has strict bank secrecy laws.

In addition, a portfolio manager outside your domestic jurisdiction is likely to target different investments than a domestic manager would, leading to greater overall investment diversification, and thus greater resiliency in your overall portfolio.

Once you've made the decision to hire an offshore portfolio manager, your next choice is to decide whether to use a private bank to manage your portfolio or an independent asset manager (IAM). As a former private banker, working for the last 20 years as an IAM, I have worked professionally in both capacities.

Here's what you should expect from an IAM working in Switzerland, as I do:

• You will have direct access to the individuals who own and operate the company. This is a very different experience, for instance, than if you are working with a large bank with branches in many countries.
• You will have continuity. The owner-operators of IAMs tend to stay in their positions for many years. They do not tend to obtain new positions elsewhere, since they already are operating their own business. In contrast, a private bank's portfolio management department often experiences considerable turnover, which means you may never get to really know the person actually managing your wealth.
• You will have a banking relationship with a private Swiss bank, managed by your IAM. The IAM works with very few Swiss banks, and you as a client will have a Swiss bank account in your own name. You sign a "limited power of attorney" enabling the IAM to manage the account. Your IAM is legally separate from the bank, but has full access to the bank's in-house securities trading system. This means that trades placed by the IAM enjoy the same execution speed as trades placed by the bank.
• You will work closely with the IAM to build a portfolio that suits your needs. Your IAM should analyze your individual needs to build a portfolio based on factors such as your age, health, temperament, investment experience and personal preferences. The IAM should also take an interest in your individual circumstances, and those of your family. He should set up your account in such a way that, upon your demise, your wealth can be transferred easily to your beneficiaries.
• You will work with a highly trained portfolio manager with extensive experience in the world of private banking. Virtually all IAMs are former investment managers in private banks, and work with a specialized team inside your selected private bank, responsible for IAMs only.
• You will have a "private Swiss banker" in the old-fashioned sense; on the one hand bringing on a very personal relationship, on the other building a portfolio that suits your needs. For instance, when you visit Switzerland, your IAM should meet with you in his premises, make arrangements for your accommodation and spend as much time as necessary to discuss your individual circumstances.
• You will receive regular updates from your IAM. These updates shouldn't just take the form of a list of securities and performance figures, but a phone call at least once or twice each year to determine if your circumstances have changed and if you are satisfied with the performance of your portfolio.

Once you've made the decision to choose an IAM, how should you proceed? Interview each potential IAM in person, if possible. Personality, compatibility and competence are all essential elements in an investment advisor. Ask detailed questions and demand precise answers. Ask for bank and legal references.