Diversifying securities across multiple brokers and jurisdictions (personal wealth)

[wheelspin]

Hello,

I aim to diversify my securities from recent inheritage (8 figures) across multiple banks/ brokers and jurisdictions. My purpose is to avoid having all eggs in one basket and having multiple contingency plans if sh*t hits the fan.

Most of the money is investing in ETFs and bonds, index funds and some selected stocks.

Residency & tax residency: UAE
Citizenship: European (GER)


All money is legit / white with SOF. Most money came from inheritance and former investments so no bank raised any flags so far.

Current brokers: IBKR (IE) and (new) Standard Chartered Singapore with private priority banking level. I already transferred some securites to SC SG without any hassle. btw: their multi-currency account is nice. If I need FX I just by with IBKR and withdraw it. Also banking with ADCB for day-to-day operations within UAE. Planning to open an SG AE account as well.

What's next on my roadmap?

Getting multiple personal bank accounts and brokerage accounts across multiple jurisdictions such as LU, LI and maybe CH. For LU I aim for BGP BNP LU and SQ LU and for LI I have LGT Bank and VP Bank in my mind as they were mentioned many times. Due to my inheritance, I meet the minimums but I am quite not sure if it is worth to have them as banks. VP Bank offers no-advice investment and execution-only services. In CH I may opt for SQ CH and UBS but I am reluctant giving them a bunch of $ just for holding my assets. Not sure what they can do more for me (loans, RE investment, creepy funds and structured products, ...).

 

[Martin Everson]

Sorry what is your question here or are you just stating what you did and plan to do?

 

[wheelspin]

Sorry what is your question here or are you just stating what you did and plan to do?

Does my approach makes any sense and are my broker/bank picks a viable solution? I am seeking for advice and recommendations in what direction I could look further.

 

[Jerry1911]

I suggest you get some extra citizenships/passports and permanent residencies.

 

[Forester]

I aim to diversify my securities from recent inheritage (8 figures) across multiple banks/ brokers and jurisdictions. My purpose is to avoid having all eggs in one basket and having multiple contingency plans if sh*t hits the fan.

Agree at 100%.

for LI I have LGT Bank and VP Bank in my mind as they were mentioned many times. Due to my inheritance, I meet the minimums but I am quite not sure if it is worth to have them as banks. VP Bank offers no-advice investment and execution-only services.

LGT is enough for LI, I think.

In CH I may opt for SQ CH and UBS but I am reluctant giving them a bunch of $ just for holding my assets. Not sure what they can do more for me (loans, RE investment, creepy funds and structured products, ...).

UBS – yes. I am not sure whether SQ is tailored for UHNWI as you are. Consider Rothschild (their French branch in Geneve).

Does my approach makes any sense and are my broker/bank picks a viable solution?

IMO – yes. I would be perhaps a little bit afraid re: Singapore, as I have heard (search here at forums) that a foreigner is not in a very advantageous position there in front of the court etc. (but it can be a myth, I have no personal experience).

I am seeking for advice and recommendations in what direction I could look further.

Look at e.g. Barclays Bank at the Isle of Man.

I suggest you get some extra citizenships/passports and permanent residencies.

Good point, IMO.

 

[Martin Everson]

Does my approach makes any sense and are my broker/bank picks a viable solution? I am seeking for advice and recommendations in what direction I could look further.

Future plan sounds European heavy as LI, CH and LUX are basically all same in terms of stability and adherence so just pick one. You have not thought about any wealth planning. Cherry picking countries, brokers etc is wrong approach. The correct way to have done it is find a banking partner like VP Bank you mentioned that can book your assets around the world with proper geographical diversification and easy single point of contact. Its not a good idea to use discount brokers like IBKR for serious wealth planning. Best to pay a little extra unless your actively trading and don't have a buy and hold strategy.

Also with a mixed bag of jurisdictions and brokers, if you got hit by a bus tomorrow you may end up with stranded assets that your next of kin may have problems accessing even with a written will.

P.S On side note - if the world financial system splits in two i.e US sphere of influence and Chinese sphere of influence you want to at least be in HK and have local assets booked on the Chinese side of the fence. Maybe your not into Asian assets but thats where the future global growth is and we already seen 6 or more Chinese companies voluntarily delist from US exchanges and during Trump era similar companies de listed. So DO NOT hold any Chinese stocks in ETF's etc outside of HK or Mainland China - learn after Russia.

 

[Forester]

Future plan sounds European heavy as LI, CH and LUX are basically all same in terms of stability and adherence so just pick one.

Well, I would distinguish between LI/CH and LUX. (Non-EU vs. EU.)

Its not a good idea to use discount brokers like IBKR for serious wealth planning. Best to pay a little extra unless your actively trading and don't have a buy and hold strategy.

Good point, IMO.

P.S On side note - if the world financial system splits in two i.e US sphere of influence and Chinese sphere of influence you want to at least be in HK and have local assets booked on the Chinese side of the fence. Maybe your not into Asian assets but thats where the future global growth is and we already seen 6 or more Chinese companies voluntarily delist from US exchanges and during Trump era similar companies de listed. So DO NOT hold any Chinese stocks in ETF's etc outside of HK or Mainland China - learn after Russia.

You are probably truly right, @Martin Everson.

 

[wheelspin]

The correct way to have done it is find a banking partner like VP Bank you mentioned that can book your assets around the world with proper geographical diversification and easy single point of contact.

What other bank should I approach? Isn't it a disadvantage having just one bank even with booking my assets in different jurisdictions? I have noticed VP Bank holds several banking licenses in different countries.

ts not a good idea to use discount brokers like IBKR for serious wealth planning. Best to pay a little extra unless your actively trading and don't have a buy and hold strategy.

I agree. IBKR is just a temporary solution and only for FX exchange.

So DO NOT hold any Chinese stocks in ETF's etc outside of HK or Mainland China - learn after Russia.

Valid point. Will do my research about that. That would trigger a sale or movement of my EM ETF where mainly China is disproportional represented. Thank you.

IMO – yes. I would be perhaps a little bit afraid re: Singapore, as I have heard (search here at forums) that a foreigner is not in a very advantageous position there in front of the court etc. (but it can be a myth, I have no personal experience).

Has somebody more information about that?

I suggest you get some extra citizenships/passports and permanent residencies.

OK, will look into the Golden Visa route. I need to assure that my German citizenship isn't revoked in case I go for a second one. It is not very easy to obtain it back and a German passport isn't the worst one to have.

 

[Martin Everson]

What other bank should I approach?

You already mentioned the ones I like i.e BNP Paribas, UBS, VP Bank and SC. You can add Citibank and HSBC. These banks all offer booking across multiple jurisdictions.

Isn't it a disadvantage having just one bank even with booking my assets in different jurisdictions?

Yes the use of a single banking group does present a risk. However if you select a banking group with a strong balance sheet and credit rating you will be fine.

 

[void]

Yes the use of a single banking group does present a risk. However if you select a banking group with a strong balance sheet and credit rating you will be fine.

come on, you're respected and well know believer in the current order but you shouldn't say stuff like this, somebody could take you seriously and suffer from consequences

 

[troubled soul]

I started thread for available all option for Dubai expat

Doomsday portfolio for Dubai expat (offshore banking/brokerage option)

1) Singapore Citibank IPB Singapore Standard Chartered Singapore DBS Bank Limited OCBC Bank United Overseas Bank Limited (UOB) 2)Switzerland UBS Group AG Credit Suisse Group AG Julius Baer Group Vontobel Pictet Group Lombard Odier J. Safra Sarasin Union Bancaire Privee EFG International...

www.offshorecorptalk.com

 

[zzzzzz]

Residency & tax residency: UAE
Citizenship: European (GER)

Current brokers: IBKR (IE)

How come that you're signed to IBKR Ireland? I thought UAE residents are always with IBKR USA?

Also ask brokers if assets are held under their name or your name. And if you hold any US sic assets (US stocks, US etfs) even with non-US brokers, watch out for US estate tax. This can be avoided if you hold EU etfs (invested in US stocks) or you hold assets under your non-US legal entity.

 

[wheelspin]

How come that you're signed to IBKR Ireland? I thought UAE residents are always with IBKR USA?

I was with them before. No issues. Talked to customer service.

Also ask brokers if assets are held under their name or your name. And if you hold any US sic assets (US stocks, US etfs) even with non-US brokers, watch out for US estate tax. This can be avoided if you hold EU etfs (invested in US stocks) or you hold assets under your non-US legal entity.

holding only ETFs domiciled in Ireland (US estate tax is very well explained at bogleheads "How to avoid the tax pitfalls"). Thanks.

 

[Martin Everson]

come on, you're respected and well know believer in the current order but you shouldn't say stuff like this, somebody could take you seriously and suffer from consequences

I know your a huge bitcoin fan and hold very extreme bitcoin beliefs like the below but try and be at least rational and logical in your reasoning and explain why you said what you said....lol .

gold is dead, pretty impractical asset with zero benefits in modern world, will get sucked out by bitcoin inevitably

Or Jan 2020 you said..lol .

Under current circumstances BTC is pretty conservative investment with huge potential.

 

[JohnnyDoe]

I know your a huge bitcoin fan and hold very extreme bitcoin beliefs like the below but try and be at least rational and logical in your reasoning and explain why you said what you said....lol .




Or Jan 2020 you said..lol .

Now I know what gold is good for: A 14-KARAT GOLD FLATWARE SERVICE

 

[Martin Everson]

Now I know what gold is good for: A 14-KARAT GOLD FLATWARE SERVICE

How random...lol

 

[wheelspin]

What would be a "fair" share for their services booking my assets across multiple jurisdictions and providing some advice but not executing any? I would like to do it by myself.

 

[Martin Everson]

What would be a "fair" share for their services booking my assets across multiple jurisdictions and providing some advice but not executing any?

If you mean cost then normally it would be an All-In-Fee which you negotiate with them (ignore what they write in literature I have never paid full price ever). In general with most private banks you would pay anything from 30 to 80 basis points (0.30-0.80%) for 8 figure advisory mandate with a private bank. If you incorporate trusts, foundations etc then potentially up to 1%.

P.S All-In-Fee would include custody, brokerage fees, advisory fees, company structures etc.

I would like to do it by myself.

I was of the same mentality until I realized that if I got hit by a bus tomorrow there would be absolute chaos with my complex financial affairs for my next of kin. This is what wealth management solves. What you save in fees now by going alone you will lose in Executor of Estate (after death) fees and potentially stranded assets if you have a complex multi jurisdiction distributing of assets that is not managed well. Build now for the long term so there is no anxiety every time you get on a plane or if you become mentally incapacitated at some point.

Me personally I have laid out my investment philosophy and wishes in my trust documents which holds my assets. I actively watch my assets being managed hence I am confident they will be well managed into the future if worst was to happen.

 

[wheelspin]

Do you fully let handle them your investments by giving them all rights to buy/sell shares and invest in their funds (discretionary) or do you use rather their advisory services?

If you mean cost then normally it would be an All-In-Fee which you negotiate with them (ignore what they write in literature I have never paid full price ever). In general with most private banks you would pay anything from 30 to 80 basis points (0.30-0.80%) for 8 figure advisory mandate with a private bank. If you incorporate trusts, foundations etc then potentially up to 1%.

P.S All-In-Fee would include custody, brokerage fees, advisory fees, company structures etc.

It seems like an advisory mandate is the right choice in the first place for me where I can make the final investment decision and have all control about my assets along with some advice. I hope I can make them work with me if I invest at least the minimum in one of their low risk funds. My goal isn't to beat the market but to preserve wealth with a growth momentum while not paying horrendous fees for their funds. I am absolutely ok with some fees, no question, but it should be balanced and fair for the work they do.

Are there any other topics I should keep an eye on during my talks with the banks?

 

[Martin Everson]

Do you fully let handle them your investments by giving them all rights to buy/sell shares and invest in their funds (discretionary) or do you use rather their advisory services?

Advisory is what you want in your case as these are portfolio assets and you can decide on them. In my case I use a discretionary trust as the trust holds mostly physical property now. It has to be discretionary but not for investment purposes but because as regulations change the trust may need to move into a different structure or even relocate etc so I need that flexibility to not end up with it being wound down. So full control is given to them to take remedial actions.

Are there any other topics I should keep an eye on during my talks with the banks?

1. Make sure you get everything you agree on in writing in a formal proposal i.e fees, scope of relationship etc.

2. Discuss if they hold any networking events. Might not sound exciting but client exclusive events can be interesting in my experience if you like cars, sport, art etc.

3. Discuss if they offer any bespoke services not published on their website also.

Have ready al paperwork to show the bank and be willing to negotiate hard in general and not take their first answer as their last answer. Also compare different banking groups not just on price but service and reach.