For those with $2M to Invest

For those who are wondering why you need a Swiss bank to manage your wealth - here is an useful excerpt from Financial Review:

UBS manages more than $1.6 trillion of private client money globally. Advisers at the private bank also give strategic financial advice on structuring investments, philanthropy and establishing family trusts and self-managed superannuation funds.

STRATEGIC THINKING

Each month, a global team of more than 900 analysts, asset managers and investment bankers, led by UBS global chief investment officer Alex Friedman, work together to review the world environment, assess the short and mid-term outlook and make high-level calls on what asset classes, and in what proportion, clients should be advised to invest.

Part of the review process is devoted to bouncing ideas off the chief investment officers of major global fund managers, such as BlackRock, Pimco and Aberdeen Asset Management. Those businesses are key partners of UBS and their views and experience lend a different perspective that helps with decision-making. “Our view is that asset allocation decisions are critical for the long-term performance of your portfolio," Chisholm says.

“First we have a robust investment process, to define broad asset allocation, and then we modify it for local conditions in each country. For each asset class we recommend investments or securities for the client."

Investment suggestions are based on research by analysts based around the world, as well as in Australia. Chisholm says local knowledge on a wide variety of global markets is a key part of the bank’s offer. Having an internal team that conducts all the research means advisers are confident they can vouch for its quality, he adds.

Research covers international stocks, bonds, foreign exchange and other asset classes. “We can offer our clients deposits or loans in up to 16 currencies around the world," Chisholm says.

“That’s a huge advantage in this environment, where you may want to invest internationally in certain securities or markets but if you can’t manage your foreign exchange position at the same time you may be exposed to risks you don’t want."

Clients are sometimes invited to speak directly to the research experts or participate in global and regional forums. The private bank offers its clients access to one-off investments, such as pre-initial public offerings and whole commercial properties sourced from the investment bank and other wealthy clients who wish to sell.

In Australia, UBS can help some investors buy debt securities, such as corporate bonds, in parcels of $100,000, which Chisholm says few other local wealth managers can offer.

LIMITED APPEAL

The service is upmarket and won’t appeal to everyone. It targets people who have more than $1 million to invest. Generally, below that level, investors are more likely to be interested in domestic equities and cash.

Managing the expectations of clients of wealth managers

Clients know it all, and want instant satisfaction. 

With the Web putting information at everyone’s fingertips in an instant, advisers face a lot of know-it-all clients. Many clients feel their Internet research makes them more knowledgeable than the advisors are.

Many clients also want instant gratification. Jacoline Loewen says, “We need to recognize this phenomenon and try to set realistic expectations for our clients…regarding the process, timing, potential complications, fees and likely results.”

Jacoline Loewen
LinkedIn profile for Jacoline Loewen

The sale of a business brings wealth and other unspoken isues

A business sale creates wealth, and unease. 

When a business owner cashes in and sells an enterprise, it often brings some confusion–even unhappiness–along with new wealth. This may seem to be similar to that internet meme - First World Problems. Think about it. People hear you are suddenly wealthy and that you should invest in your neice's startup.

To be of help in that situation, advisers may need to step outside their own comfort zone and discuss non-financial issues with clients. Advisors can help their client to focus on a new set of goals.

Jacoline Loewen is a Director with UBS Bank and writes about M&A, private equity and wealth management for business owners and entrepreneurs. You can follow her on Twitter @jacolineloewen or contact her at jacoline.loewen at ubs.com

The benefits of tax-loss and investing

Benefits of tax-loss harvesting are inflated. 

Some so-called robo-advisers may be overstating the benefits of tax-loss harvesting. Some of the claims we’ve seen are unrealistic given our more than a decade of experience managing tax loss harvesting portfolios and results we’ve seen from competitors we respect. 

The claims made by online advisors arguably represent the triumph of favorably simulated back-tested results over actual experience.

Wealthy families and their trusts

Trusts that use multiple advisers. 
Traditionally, the directed trust model called for electing a trustee and an investment adviser. Now, the wealthiest families are slicing and dicing trustee duties into many different functions. 
Directed trusts are showing up with as many as eight different roles, including a “special assets advisor,” a “distribution advisor” and a “trust protector.”