Wealth managers are under fire as US high net worth individuals are the key target of FATCA. As it has developed on its path toward global tax collection efficiency, attitudes have changed as the resolve of the US to implement the act has become abundantly clear, and intergovernmental agreements have added new thought processes to meeting compliance.
- Analyse the current situation regarding FATCA compliance and the role of wealth management in the changing tax environment.
- Interpret FATCA trends within the wealth management industry using Datamonitor’s Global Wealth Manager Survey 2012.
- Understand the challenges facing wealth managers and how to react.
- Assess responses to FATCA from your industry peers using company specific case-studies.
- On a global scale, wealth managers are sitting on the fence when asked whether disassociating US clients is too drastic a measure. On a country scale attitudes toward US clients are very different, and some firms are seeing a niche market developing whereby US-friendly firms welcome with "open arms" those individuals rejected from US-averse firms.
- FATCA may have been postponed to 2014 but the challenges remain the same. A FATCA strategy must embrace flexibility. It must react to the growing intergovernmental agreement environment. Enhanced due diligence will become a fact of life and causing minimal strain on the client relationship is paramount.
- FATCA is the beginning of a wider and more transparent global tax environment that all firms must take anticipatory measures for now.
Reasons to Purchase
- What path is FATCA taking and where will the global tax environment be in five years’ time?
- How is the competition reacting to FATCA?
- How will FATCA affect the client relationship and how should wealth managers react?
- Who is still accepting US clients and who isn’t?
- What should a FATCA IT solution incorporate to reach maximum efficiency? SHOW LESS READ MORE >
- Wealth managers are in the firing line of FATCA
- Approaches to FATCA vary by the size of the firm and the country in which it operates
- Meeting reporting and identifying requirements is only the beginning of FATCA compliance
- The wait for final regulations will make 2013 a frantic year for achieving FATCA compliance
- Wealth managers are directly in the firing line- Wegelin & Co provided a wake-up call for unconvinced FFIs
- US tax amnesties have had an impact on US offshore business, but wealth managers must still be wary
- US individuals favor a number of international banking centers, which will be flashpoints for FATCA compliance
FATCA: THE STORY SO FAR
- Withholding may only be a ""stick,"" but client identification and reporting are here to stay
- Intergovernmental agreements: jurisdictional variation complicates but does not impede compliance- 2012 has seen the development of the Model I and Model II FATCA frameworks
- The UK IGA will act as a best practice case study for other Model I IGAs
- The true global scope of FATCA has become abundantly clear
- Rise of the mini-FATCA
- The implications: FATCA strategies must not dwell on identification and lose sight of reporting demands
WEALTH MANAGERS: THE STORY SO FAR
- Datamonitor's 2012 Global Wealth Managers Survey: approaches to FATCA - FATCA compliance is a necessary evil, but size and market both matter
- Client and workforce education is not on the immediate agenda for wealth managers
- Some wealth managers will still onboard US clients, but approaches vary by country
- Datamonitor's Global Wealth Managers Survey: opinions on FATCA
FATCA: THE CHALLENGES FOR WEALTH MANAGERS
- Flexibility must be at the core of a FATCA solution
- One world, multiple FATCAs
- Communicating with the client, enhanced due diligence, and the role of education- Client communication will evolve in light of FATCA demands
- The approach to due diligence must not be the same for US and non-US clients
- Client education will prepare clients for unexpected due diligence
- Translating a FATCA strategy from compliance to the front office- The role of an IT solution
- The role of two way communication
FATCA: THE RESPONSE FROM THE INDUSTRY
- Welcoming US clients- Coutts
- Other firms targeting US clients
- Ending US client relationships
- Aiding FATCA compliance- Fenergo
- Definitions- Affluent
- High net worth
- Liquid assets
- Mass affluent
- Methodology- Global Wealth Managers Survey 2012
- Further reading
- Ask the analyst
- Table: Key future dates in FATCA compliance
- Table: Intergovernmental agreements Model I vs. Model II
- Table: Product and entity exemptions in the proposed UK/US IGA, September 2012
- Table: Wealth managers specifically targeting US individuals living abroad
- Table: Wealth managers that have ended overseas US client relationships
- Table: Examples of other technology firms' FATCA solutions
- Figure: Private banking clients and their wealth managers are at the heart of the objectives of FATCA
- Figure: IRS tax amnesties are becoming less lenient, and more customers are taking advantage
- Figure: In the short-term identification and reporting will be resource-hungry, but withholding will remain and will demand further and greater capital input
- Figure: Model I vs. Model II
- Figure: As of November 2012, the US Treasury is actively engaging with 50 jurisdictions to create more IGAs
- Figure: Education is yet to begin in earnest and not onboarding US clients is an unpopular strategy
- Figure: Switzerland and Singapore are the jurisdictions most reluctant to take on US clients
- Figure: US expats are one of the major HNW expat client groups among UK wealth managers
- Figure: Simply disassociating existing US clients is too drastic a response
- Figure: Previous FATCA infrastructure will provide a base for on-demand solution flexibility
- Figure: Existing communication patterns may have to change to adapt to FATCA compliance
- Figure: FATCA compliance can be enforced by an IT solution, but a unit-level intermediary must provide a clear communication channel for response verification and workforce education