ISSUE 25
STRIKING GOLD OPPORTUNITIES IN GOLD INVESTMENTS TAX CORNER
CHART OF THE MONTH, MIDDLE EAST REPORT
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GENEVA ZURICH JERSEY GUERNSEY MANCHESTER LONDON NEW YORK MIAMI DUBAI HONG KONG SHANGHAI SINGAPORE CAPE TOWN
EDITOR’S INTRO
Editor’s Intro The best laid plans
with open arms. Investment Corner focuses on just one location - the I bet you had big plans for 2020! Talking US - looking at how the recent election to the PCD team I’m deeply impressed outcome might impact the global by how much they and our members economy. got done this year. But there are very few who didn’t have to shift their focus and As I type this it’s freezing adjust their tactics to get things done. In outside, but a glance at this many ways it’s adaptability that’s been the edition’s chart of the month real winner over the past 12 months - a is a stark reminder of the jeopardy that look at this edition’s Privateer climate change presents to us all. column reminds me just how we’ve all embraced technology And of course there’s gold in our new working lives. There’s also in this edition – not just the some sage advice and a virtual glass of insight and wisdom of our Dutch Courage for anyone thinking of members, but the real stuff too. Always changing jobs or refocusing their career the ultimate safe haven, it’s once again in 2021. the assert allocation of choice for the smartest HNWIs. You can read all about Further from home you’ll the very modern gold market here. find our Middle East report on page 16. It’s no surprise to So that’s it, 2020 ended. discover that the modern Family Office The year that locked us structure is increasingly digital. And all down but failed to that’s no bad thing when you uncover lock us out of opportunities the increasing complex layers of data- to develop, thrive and grow. And as for protection, legislation and reporting 2021 – good things have a habit of coming standards that need to be navigated. to those who wait, so keep everything crossed for live events back on the menu Tax is an enduring priority alongside our packed schedule of digital for wealthy clients and this happenings. I for one can’t wait. edition’s Tax corner looks at the advantages of moving to a new Wishing you a happy, peaceful festive jurisdiction that welcomes HNWI’s season.
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12 MONTHS OF 2020
12 Months of 01
02
03
Big year ahead. Must write a business plan based on bouncing through international financial centres around the world. News reports talking about a health scare affecting people in China. Seems far off. More immediate concern is that I appear to have booked the Mumbai dinner in February on a Bank Holiday. Turns out not to be celebrated across the City and I breathe a sigh of relief.
Business plan needs writing, but coronavirus seems to be having a bigger impact than expected. We were due in Singapore at the end of the month. Might have to cancel? We never cancel. Might have to cancel other things too? Went off to Dubai to get to Mumbai, without huge concerns and held a great event in India. We had to pull Singapore on government regulations, but were hopeful that we will be back in the summer/autumn in Europe and the US.
Forget the business plan and learn about webinars. Communicate with members and sponsors reassuring them they won’t be out of pocket. Try to work out which way is up. Put some posts on Linkedin about Snakes and Ladders and never giving up. Massive audiences flocking to early webinars as they were all WFH for the first time. Trying to work out how to make digital content interesting. Difficult.
JANUARY
FEBRUARY
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MARCH
12 MONTHS OF 2020
By D a
ell dB vi
04
05
06
Start to make plans with initial sponsors of digital content for our first International Pods. Barclays, Standard Bank, Dart Real Estate, Range Developments, LGT Vestra US, Katten and Property Wealth Management all early adopters and give us their backing. Great. We plan to get cracking in May. No sign of events until the autumn.
Launch first international pod starting with an East African series sponsored by Barclays. Two memories; we accidentally go live before we are ready and a contact WhatsApps me to say “FYI we can see you...” Major internet outage during the first webinar, leaves the Barclays CIO hanging and having to improvise on a crackling phone line. Tricky. We continue to learn and adapt and improve.
Heavy schedule of digital content as we get into the flow of digital content. Everyone in a rush to make something happen before the summer. Everything needs to happen before our break on 24 July. I feel exhausted and under pressure. Keep thinking I have COVID (I didn’t) and that I need to reschedule webinars. But I can’t and we don’t. On we go.
APRIL
MAY
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JUNE
12 MONTHS OF 2020
07
08
09
Just get to 24 July and put your out of office on. Everyone is up for a break this year of all years. Too much Zoom. Too many calls. Getting up early to edit and tweak content. Weather is glorious. Finish the schedule of pre summer content. Go to the beach and put on OOO for 2 full weeks. Bliss.
Move our office to Hove and start thinking about the autumn schedule. Here we go again. Spreadsheet planning chock full of webinars. Try and set up a new office with desks, mics, lights, acoustic equipment. Uncertain on whether people will be heading back to offices in autumn. Lots of back to work selfies on Linkedin starting to creep into the feed.
Back in the thick of digital content. Day trip to London for the first time in 6 months. Reasonably productive and pleasant but not efficient versus a day in the office. No plans to go back. Back-towork selfies start to slow down as Lockdown 2 comes into focus. Create Digital Membership options and start to promote to inter nat iona l databases, which gets taken up in numbers. No end in sight and people saying, “will we ever go back?”
JULY
AUGUST
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SEPTEMBER
12 MONTHS OF 2020
10
11
12
Firmly back in the webinar season, create some new formats “The Friday Show” where I introduce members to do some networking on Zoom. Starts to work, but needs something else. Wednesday at 2pm format around a topic and Breakout Rooms hits its stride giving the audience information and networking in 60 minutes. People start saying, “if we are going to be like this for the next 6 months, I can’t rule out online networking”.
Webinars coming thick and fast covering a broad range of topics. Improve The Friday Show with a new format and more speed networking. Better. That works. Wednesdays at 2pm working well and we continue to deliver international content. Vaccine news starts to come through; may we meet again after all?
Start to sign sponsor contracts for 2021 events. Some signs of optimism. Some clients say they like Digital and will continue to support it next year. Others are itching to get back to Live events and planning a big bang in 2021. Future is uncertain but will continue to evolve.
OCTOBER
NOVEMBER
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DECEMBER
We will continue to bring the best connectivity in the sector via Digital or Live channels. Put that in a business plan.
OPPORTUNITIES IN GOLD INVESTMENTS
GOLD IS ONE OF THE OLDEST AND MOST RENOWNED PRECIOUS METALS IN THE WORLD. COVETED FOR ITS RARITY, IT HAS BEEN THE FOCUS OF INTERNATIONAL MONETARY SYSTEMS, RELIGIOUS VENERATION, AND MYTHOLOGICAL FOLKLORE. EL DORADO MAY NOT EXIST, BUT OUR INTEREST IN GOLD HAS RARELY WAVERED.
per annum.A 2020 survey of global investors highlighted the desire for gold investments, with 63% saying they had a strong desire to invest in gold but only 2% of investors admitting to actually owning investment grade gold. Now, with the impact of Covid-19 on global markets and regional turbulence, should we be looking to gold investments? And importantly, what should high net-worth individuals be looking for when investing in gold?
However, despite its infamy, gold had become an archaic and outdated form The modern gold market: of wealth for many modern economists and private investors, particularly after the disuse of the gold standard internationally and with the gradual shift towards a cash-based, and now cashless, society. However, we are currently seeing a resurgence in gold and a burgeoning global demand. According to an Intelligent Partnership survey, over the past 10 years, gold has outperformed almost every other asset class with an average return of over 25%
In combatting its archaic perceptions, gold has continued to play an incredibly substantive role in the global economy for both private investors and central banks since the discontinuation of the
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OPPORTUNITIES IN GOLD INVESTMENTS
gold standard. As a wealth preserver, gold has one of the most equitable value rates of all physical asset commodities. GoldHub, a leading gold market research company, states that the demand for gold exchange-traded funds (ETFs) surpassed 1,000 tonnes in 2020 and that the global demand for gold reached an all-time high of 4,355 metric tons; a figure which has been increasing steadily over the last decade.
enjoys crunching the numbers, Robin’s firm belief is that making an asset allocation to precious metals such as gold is an increasingly smart move for high net-worth individuals. Especially when you’re looking at the macroeconomic picture of a global economy with zero to negative interest rates which widely impact cash and bond investments.
As a physical investment asset and precious metal, the value and equitability Robin Newbould, Head of Execution, of gold is dependent upon its supply Advisory, and Precious Metals at chain in mining, transportation, and Ravenscroft, is a Guernsey-based refining. investment professional with over 20 years’ experience in gold commented Christophe Numa, Managing Director on the importance of paying attention at Bunker Group Gold & Silver, based in to central banks and their recent Singapore has spent over 10 years in the investment behaviours. wealth management industry, and has a focus on precious metals investment. “It is no coincidence that since 2008 net Notably, Christophe has been working buying activity by central banks, who with the Bunker Group to disrupt the are big players in the market, has been market by connecting investors directly steadily increasing as they have chosen to the world's most reputable refineries to invest significant sums of government in order to buy physical precious metal money in gold; in fact they have never at the safest and most competitive prices. bought more net purchases in gold than they did in 2018 and 2019.” “The price of gold is in the logistics” Christophe says, “this is important to Robin’s view is equally backed-up remember.” by GoldHub, who reported that net purchases by central banks in gold As a physical asset, unlike cash increased by 12% from 2018 to 2019, as premiums and bonds, gold relies upon they added to their gold reserves. a robust supply chain and international logistics operation which is a substantial As a self-confessed maths lover, who aspect of the global gold market.
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OPPORTUNITIES IN GOLD INVESTMENTS
Gold as a safe haven:
gold is this safe haven, when typically stocks and bonds fall, gold tends to rise over the medium and long term.”
Mark adds that ETFs offer competitive operational costs, hedging, and give more options to high net-worth individuals in terms of investment but outright owning the underlying physical One of the most compelling reasons asset is more operable, reliable, and a for high net-worth individuals to invest lower cost investment in the long term. in physical gold bullion over ETFs, cryptocurrencies, and bonds is that gold Robin points out that in comparing is both historically and contemporarily ETFs to gold bullion investment that: regarded as a safe haven asset. Meaning that, during periods of uncertainty, the “From a cost point of view the value of gold has remained stable (if transactional side of dealing in physical not increased) and protected its owners’ will be higher ordinarily than ETFs but investment. then, on the annual cost, normally you make a saving in holding physical bars in Mark O’Byrne, Research Director at a vault because you’re not paying for the GoldCore in Dublin, Ireland, caters to structure of the ETF and its management.” investors, HNW, UHNW, family offices, institutions and specialises in helping For many investors, the value in gold clients invest in and own gold in the bullion can be found in the safety it safest vaults. Mark holds a BA in History, provides. Robin continues: specialising in Greek and Roman Civilisation, allowing him to offer a “I think clients want to know that they’ve formidable introspective examination got their 10 kilograms of gold and it’s that of gold as a safe haven asset. corner of their wealth which isn’t moving and has a zero-counterparty risk. Those “Gold is a safe haven asset and has investors who use our secure vault take a historically been seen as a store of value, lot of comfort in knowing that the actual so it really helps people to protect their gold bars which they bought are there portfolios and protect wealth. There is whenever they want to see them or need a lot of academic evidence as well from them.” independent asset allocation expert that
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OPPORTUNITIES IN GOLD INVESTMENTS
Storing gold: Joshua Rotbart, Managing Partner of J. Rotbart & Co, a Hong Kong-based bullion house providing solutions for high net worth individuals and families, asset management firms, and private banks, added to the conversation that storage preferences among high networth individuals are often less about When investing in gold bullion, marketability but client perspective on another key consideration is storage safety. and particularly, it’s worth considering: How can I access my storage location? “When it comes down to where to store And how quickly can I process gold gold, it’s a matter of comfort for the client; investment transactions? it’s the perception of the risk rather than the risk itself ” Michael O’Kane, Chief Operating Officer for New Zealand Bullion Ensuring you have a robust trading Depository, has spent the past 25 years environment is essential and as Joshua working in the finance and treasury notes, moving gold is a pretty easy and sectors - initially as an IT manager and transparent process, which can be done then as an FX dealer. Since 2011, Michael professionally and swiftly. has spearheaded New Zealand’s only specialist Gold Bullion storage facility Mark, building upon his earlier insights catering to high net-worth clients and on gold as a safe haven investment, said: investors globally. “Gold is only a safe haven asset if you can Michael believes that “Safety, Security, access it and you can buy it and see it in and Stability” is what investors are an efficient manner.” looking for in storing their gold and remarks on international gold storage Moreover, Mark pointed out that clients that: often favour countries with a high level of political and economic security for “Ensuring comfort for the client, for some people, makes it that easier to hold wealth Read in full online at a longer distance than they normally would”
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LETTERS TO THE EDITOR
Letters to the Editor The only way is digital. I’d heard of PCD but had put off joining for a couple of years. Little did I know what I was missing out on! Having now joined as a digital member I’ve been pleasantly surprised at how much I’ve learnt and how many new contacts I’ve made just sitting here at home looking at a screen. Thank you PCD and can’t wait to sample a live event one day when we’ve all been released back into the wild! C. Dorking.
New ways to market. As a wealth manager I read your Privateer column on marketing with interest. With the cancelation of live events the ways we stay in touch with clients and (hopefully) grown their business really have changed. I wonder if I’m alone in having found the new approaches we’ve adopted actually more intimate, more focused, and more profitable? Time with a client oneto-one either via Zoom or over coffee in their garden has built stronger bonds – we just need to find ways to reach prospects with the same personal touch. F. Exeter.
Bricks and mortar. Your glimpse inside the London property market was timely and insightful. Seen as a safe haven for so long – I was relieved to read comments about activity quickly returning and demand from overseas investors increasing again. London thrives on diversity and ensuring we keep the same cosmopolitan mix we’ve enjoyed for so long is important in these times. How about a follow-up feature that looks beyond the capital and maybe abroad. T. Kensington WIN A BOTTLE OF CHAMPAGNE FOR LETTER OF THE MONTH! We’re looking for stories, ideas and opinions with real appeal for our members. To submit a ‘letter’ for publication in our monthly magazine, simply email your content to lucy@pcd.club. Just two points of general guidance: please keep it short (max 200 words) and exclusive. •12•
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THE PRIVATEER
The Privateer 2020 has been a war able to conduct of attrition. When video conference I speak to people calls, accept and they often say that send diary invites they find the WFH and generally use environment more new applications intense in many became essential ways - “Am I working skills regardless of from home or living age and stage in at work?”. Without your career. There the sanctuary of is nowhere to hide a commute, the and that trend working day can lack boundaries. will undoubtedly continue into next Rapacious employers are encroaching year. Now we have bottomed out our into the mornings of their employees like home computing and internet issues never before - why not have a 8am team which plagued the early Lockdown call if none of us situation of many are commuting? professionals, We are going to bring we have to ask forward some fresh Many are looking ourselves, “what content around the ideas of forward to next?” renewal and retraining. the Christmas break for some downtime away from the emails and back-to-back Zoom. The holidays will be different this year as moving around is complex, giving time for people to reflect. In January at PCD, we are going to bring forward some fresh content around the ideas of renewal and retraining.
We have solved the hygiene factors of the online environment, but if we want to do more than tread water, we need to think differently about the skills we need to adapt and thrive. This might be looking afresh at collaboration with professional contacts, Linkedin skills, online platforms and the way we get our key messages about our business to our We have all had to reskill this year. Being customer base.
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THE PRIVATEER
We are here to provide the Some of us shift in Lockdown sounding board, advice will realise that have been and positive energy to any they need to try positive about the within our community who something new. experience. might need a helping hand. While changing jobs in the teeth We will emerge of a recession or crisis is not the obvious from this crisis fundamentally changed. choice, our new WFH environment There is nothing to fear from this change makes the prospect of changing for those who grasp the opportunity. employers more simple. No new We are here to provide the sounding commute or office perks to give up. It board, advice and positive energy to any might be an opportunity to strike a new within our community who might need bargain on how and where you work. a helping hand. Those I have spoken to about making a
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MIDDLE EAST REPORT
Middle East Report Written by Paul Hunter | Director, Family Office Services | Crestbridge
The governance journey amongst Middle Eastern family offices
increase their exposure to alternative investment markets and broaden their geographical interests, it is vital not to lose sight of a fundamental objective – As families in the to ensure family wealth is safe, ready to Middle East look to be passed down through the family for navigate the fallout generations to come. of the pandemic this year, it’s clear Indeed, if the disruption caused by that, for a number of COVID-19 has taught us anything, reasons, governance it’s that resilience, stability and having is going to play a key part robust control measures in place is in structuring, investment, absolutely critical. Good governance is succession planning and operational absolutely the cornerstone of that. decisions.
Governance Journey
On an industry-wide level, a look at ongoing trends in the global family office space highlights quite clearly that the modern family office structure is getting more complex, more global, more sophisticated and more digital.
Of course, adopting the highest levels of good governance is not a trend associated purely with the coronavirus. Whilst current circumstances and market disruption have served to highlight the importance of governance, this is a journey that families in the Middle East With respect to the Middle East in have been on for some time. particular, meanwhile, families – whose businesses make up a sizeable After a decade of profound change proportion of the economy - are seeking in international regulation and increasingly to diversify their investment transparency initiatives, for example, strategy and broaden their exposure to families have been busy ensuring new markets. As families in the region compliance with information sharing become more institutional in their requirements such as the Common approach, adopt more digital platforms, Reporting Standard, as well as substance
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MIDDLE EAST REPORT
requirements, data protection criteria control of their family wealth within and the forthcoming Mandatory the last ten years, with 37% expected to Disclosure Rules. take control within the next ten years (Campden Global Family Office report), All of these add a layer of complexity, means that families are facing the stark cost and reporting, but there is reality of the importance of putting in widespread appreciation that adhering place robust oversight, governance and to and embedding these standards into succession planning strategies. the operating models and culture are necessary in the modern environment Governance is also about instilling a family offices operate in. more purpose-driven culture within the family that creates a joined-up, Now, though, governance is taking shared vision that family members can on a more nuanced, believe in. This can multifaceted be manifested meaning. through a No longer is it family office’s just a regulatory, investment strategy, technical concept approach to ESG aligned with ensuring investment and compliance with ph i l ant h ropi c broadening international activities. On average, 34% of a SFOs requirements. have an interest in sustainable investing (Global Family Office Report, 2019). It is also about putting in place control measures to ensure a complex family Given that the size of the HNWI operation doesn’t make itself vulnerable population in the Middle East increased to internal disputes and that succession by 9.3% in 2019, while wealth witnessed plans are clear and robust – this is an increase of 10.2% to reach US$2.9 aligned with how a family sees the trillion (Capgemini World Wealth concept of legacy. Report 2020) reflects just how much is at stake. It is potentially alarming that, according to one study (Williams Group), 70% of wealthy families lose their wealth by the second generation, and 90% by the third. Read in full online The fact that 28% of ‘next gens’ took
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QUIZ
Quiz Cryptic Cartoon: Favourite Festive Film
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MEET THE TEAM
Meet the Team: Leon Peskett Most challenging has probably been trying to learn to get my head around all the new systems and services that the company uses for workflow. Why do you do what you do?
It developed as a logical progression of some of the skills and interests I developed while at university. I’ve always enjoyed more creative work but I’m terrible at drawing so doing something where I get to design and create things without needing a steady hand is perfect. If you could do another job for just Where are you from?
one day, what would it be?
I’m originally from Margate in Kent but I would probably be an astronaut for moved to Brighton in 2014 to study at the day. I think it would be amazing to the University of Sussex. spend the day in space but I think the realities of living like that for months You’ve just started an and years at a time would eventually apprenticeship programme get to me. Also I think I’m definitely with PCD; what’s been 1) most not smart enough to complete any of enjoyable and 2) most challenging the complicated scientific research they so far? have to do while they’re up there, but a I’ve only been here for two weeks so far day of floating around would be great but most enjoyable has probably been fun. just getting stuck in on some in-progress projects, such as helping source footage and b-roll for videos and updating Read in full online content in the membership brochure.
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•M E E T O U R T MEMBERS•
Meet our Members: Mary-Rose McLean families, and in pre Covid19 times at least, frequent face to face meetings. The interaction and diversity of client’s requirements keeps me on my toes. What has been your greatest achievement?
In recent times, I would have to say managing to complete on time and budget a complicated real estate acquisition and refinancing in London in the first few weeks of lockdown with all of the associated challenges lockdown brought felt like a huge achievement. What do you do for Abacus Trust
How has your business adapted in
Group/Moores Rowland?
light of COVID-19?
Having been with Moores Rowland, Monaco for almost 14 years, and being a Scottish trained lawyer by background, I head up the International Legal/ Corporate/Yachting Advisory team at Moores Rowland in Monaco.
Clearly, there were some logistical challenges at the outset of moving an entire office team with no real experience in remote working, to working out of their homes. With really helpful IT support in Monaco and from our group Head Office in the Isle of Man, the What do you love most about your transition was almost seamless. Thanks role? not least to having a great, experienced The variety – each day brings with it a team with a can-do attitude. Many new project or a challenge to overcome clients have remarked that for our UHNW clients. As the vast majority of our clients in the Monaco Read in full online office are Monaco residents, we have regular contact with clients and their •20•
•M E E T O U R T MEMBERS•
Meet our Members: Sarah Huntridge changed to accommodate social distancing and personal protection equipment which is now used in our shipping and destination services. p We have also increased our online presence. We have adopted Video Platforms such as Zom and Microsoft teams in place of face to face meetings. What has been your greatest achievement? Personal or professional. Professional : Changing people’s lives with my professional support and advice. Personal : Raising my two children. What do you do for BTR
Why did you join PCD?
International?
To interact and network with like-minded professionals and to complement their services to their clients through offering our bespoke moving and destination services to them.
I am a Business Development Executive for the company. My role is to source new clients and build business relationships to help promote the services of BTR International.
Have you attended a PCD What do you love most about your webinar? What did you think? role?
Yes, multiple times. I found them The diversity of the job and providing inspiring when listening to other excellent customer service to our clients. members experiences and also very informative. How has your business adapted in light of COVID-19?
Methods in the business have been
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Read in full online
•M MEEEETT O OUURT M MEEM MB BEER RSS •
Meet our Members: Ben Gill University. I am now approaching my final exams to become a Chartered Tax Advisor, and have always found personal tax to be the most enjoyable subject, as it is ever changing. We are often given very privileged access to individuals’ lives, which I find really fulfilling alongside providing technical advice. Why did you join Lancaster Knox?
Ben joined Lancaster Knox in September 2020 to help to grow the firm’s North West presence and meet increasing demand. Providing tax services to HNW and UNHW clients and their families, Ben is based in Manchester, but works with clients and their advisors across the UK and abroad.
My decision to join Lancaster Knox from my previous Big Four firm was primarily down to the specific focus on working with HNW and UHNW individuals and families. I was also excited by having unprecedented access to wider parts of the Knox group of companies, giving us more options to help private clients in a genuinely holistic way. It just feels like the perfect fit for me at this stage of my career, as it is rare to have access to such a broad range of clients, services, and other expert team members. What features highly on private
Why do you work in tax?
clients’ agenda?
I always wanted to follow the The global pandemic has clearly been on accountancy route. I studied for the everyone’s minds for much of 2020. Association of Taxation Technician exams while working in industry before Read in full online completing my accountancy degree at
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•M E E T O U R T MEMBERS•
Meet our Members: Henry Freeman trust companies, lawyers and other advisers as well as the underlying clients themselves so that they get the best possible service and benefit from institutional pricing when buying, selling and holding investments globally. What do you love most about your role?
I think the biggest privilege of this job is meeting so many interesting people from all manner of different backgrounds and hearing their stories and experiences through life. I also enjoy being challenged and finding the right solutions for our clients and prospective clients
What do you do for Liberum Wealth?
I’m an Executive Director at Liberum Wealth, a provider of bespoke custody, securities trading and FX solutions for families, individuals, companies, funds and investment managers. We’re a subsidiary of London-based independent investment bank and institutional broking house, Liberum, where I have worked for the last ten years.
How has your business adapted in light of COVID-19?
Due to our global client base and how we already utilised technology, most importantly there was little to no disruption for our clients. Indeed we saw trading volumes increase considerably. The team adapted well and quickly to working from home but since the lockdown in Guernsey ended
I’ve been building this business for the last two years and work with fiduciaries,
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Read in full online
TAX CORNER
Tax Corner with Lancaster Knox Written by James Heathcote | Director, Private Client Advisory | Lancaster Knox
Leaving on a jet plane Although many of us can barely remember what it feels like to travel abroad, both myself and the team at Lancaster Knox have recently noticed a marked increase in the number of queries from HNWIs regarding their options for leaving the UK. There are two key drivers for this that we are seeing. First, the impending UK Budget and likely tax increases (as discussed in a previous Tax Corner segment); secondly, the recognition borne out of the global pandemic that many clients simply do not need to be tied to one geographic location. This presents something of a quandary for UK tax
policymakers. The UK’s Statutory Residence Test, introduced in 2013, makes it more straightforward to determine an individual’s residence position based on the number of days they spend here (rather than having to cut all ties to the UK, as in the past). At the same time, many countries are actively seeking to attract HNWIs to their shores, bringing with them wealth, job creation and spending power. These two factors combined make leaving the UK ever more viable. And the choice of jurisdiction for those seeking a tax-friendly place to live has, arguably, never been broader. More ‘traditional’ offshore jurisdictions remain staples on the list of possible locations the HNWI may consider, such as Monaco, Switzerland, the Isle of Man and the Channel Islands. However, huge momentum is also swinging towards countries with favourable regimes specifically for new
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TAX CORNER
arrivals: Portugal, Spain, Italy and, more recently, Greece, for example. Many clients are being attracted by these countries for the culture and lifestyle on offer (and no doubt the weather!), as well as the tax benefits they may be able to access as non-nationals or non-habitual residents. A number of clients are also actively in the process of moving to the UAE, with its network of independent
financial centres facilitating global business. As ever, specialist advice needs to be undertaken when moving acrossborders, given the vastly different regimes between jurisdictions. However, for those concerned about tax rises or dreaming of a life in sunnier climes, there is no shortage of opportunity.
Get in touch
As always, please do not hesitate to get in touch if you would like to have a confidential discussion about anything private client tax-related.
James Heathcote E: james@lancasterknox.com M: +44 (0) 7557 647 543 W: lancasterknox.com
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INVESTMENT CORNER
Investment Corner with Kleinwort Hambros Written by Fahad Kamal | Chief Investment Strategist | Kleinwort Hambros THE FOLLOWING IS AN EXCERPT FROM KLEINWORT HAMBROS PRIVATE BANK MONTHLY HOUSE VIEWS AND WAS WRITTEN BY FAHAD KAMAL, THEIR CHIEF INVESTMENT STRATEGIST. For further details of their services please contact Alan Kinnaird, Richard Brown or Nick Manning at Kleinwort Hambros Private Bank on tel : 0113 218 1974. In accordance with the applicable regulation, we inform the reader that this material is qualified as a marketing document. CA287/NOV/2020
Fireworks for the guys on markets to react? In truth, few would have forecast the +1.2%, +1.8 and +2.2% Fox The US election – an event of furious speculation and prognostication – has passed. Pollsters have been confounded once again – expectations were for a landslide Democratic victory – despite their efforts to “correct” for their similar failure four years prior. In the immediate aftermath there is no declared winner. Moreover, the outcome is yet to be announced in some critical swing states, and is bitterly challenged in others where the incumbent President has been declared a loser. Had this outcome been known in advance via a magic crystal ball, how would one have reasonably expected
gains for the S&P 500 that occurred on the day prior, the day of and the day after the 4 November election. Ex-post explanations abound: a divided Congress should lead to policy “moderation” on all sides; tax rates can’t be hiked without a Democratic senate; with the election over, cooler heads will finally agree to the stalled fiscal stimulus package. Ex-post analysis is easy. In any event, the election is not over, and neither is the short-term volatility. Nonetheless, we have always maintained – based on evidence – the impossibility of divining geopolitical outcomes, and the double-impossibility of knowing the subsequent market impact.
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INVESTMENT CORNER
Let us be clear: we remain deeply attentive to the developments in the US but prefer to focus on the things we can measure and which have actual efficacy when it comes to guiding us as investors. After all, the US remains the world’s largest single economy and home to well over half of the global equity market capitalisation. Therefore, economic activity there acts as an anchor for growth elsewhere and sets the pace for asset price returns globally. This pandemic-ravaged year may well be the most fascinating in the States’ economic history; it certainly is record breaking. US GDP grew 7.4% in the third quarter, by far the strongest ever recorded (the previous record was 3.9% in 1950). Nonetheless, after falling 1.3% in Q1 and 9% in Q2, the economy remains 3.5% smaller than at the end of 2019. For comparison, GDP shrank 4%
over the entire six quarters of the Great Recession of 2008/09. This reveals a US economy – and by extension the world – at a nuanced and delicately poised juncture. Effectively, the US is no longer in recession, and by the headline GDP figure experiencing a breath-taking surge. However, it is also still far below its pre-Coronavirus peak, with high unemployment and underemployment, and major dislocations. For example, US consumer spending on services in Q3 was an annualised $660 billion lower than in late 2019, while spending on goods was up $325 billion. Overall, spending remains about 3% percent below prepandemic levels. Of course, the real driving factor behind much of what is being witnessed in the
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INVESTMENT CORNER
data remains the course of the ongoing Covid-19 pandemic, not the election. Unsurprisingly, there is a high degree of nuance here too. In the week ending October 28, there were on average 75,561 cases per day in the US, the highest at any point in this crisis and a 41% surge from two weeks earlier. Yet, at the same time, the number of hospitalisations was 11 for every 100,000 Americans, well below the peak of 18 recorded in the spring. Deaths, thankfully, remain lower still – the seven-day average to October 28 is 786 compared with highs of 2,232 in April. There are two key questions which will determine the outcome for the economy. One, will rising hospitalisations overwhelm health systems, forcing a lockdown? Two, even if they do not overwhelm the health infrastructure, will the rising hospitalisations lead to increased
deaths? If the answer to either question is “yes”, this may well lead to a similar lockdown of the US economy as we saw in April and May and a likely fall back into recession. If the answer to both is “no”, the economy will continue to recover, albeit slowly and unevenly with widely divergent outcomes for various sectors. There are some critical reasons for optimism. Regarding the first question, there is clear evidence from China, Taiwan, Korea, Japan, Australia and New Zealand (to name a few), where countries can regain relative control from troubling Covid-19 transmission. In the US, a marked improvement can come from basic steps such as increased mask-usage, which may become less politicised now that the election is over. A more enduring return to something resembling normal will require effective “track-and-trace” procedures.
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INVESTMENT CORNER
If countries ranging from Canada to On the other hand, we could also prove Vietnam can do it, so can the US (and to be too conservative, given each day the UK for that matter). we get closer to an eventual vaccine which could be widely distributed As to the second question, reports as early as by Q2 2021. Even without suggest that death rates among one, China and much of East Asia – hospitalised patients in New York countries which range across the sociohave dropped from 25-30% in the political spectrum – appear to be in a spring to 3-8% in recent months, and a “post-pandemic, new normal”, so there similar trend has been observed across is a possible path of strong economic Europe1. A combination of factors have growth even without a panacea. contributed to the improved outcomes for hospital patients, chiefly the lessons Over the third quarter, we have begun learned by doctors during the first wave adding to risk assets following our and the development of better treatment reduction during the seismic ructions in protocols using steroid drugs and non- markets early in the year. As always, we drug interventions. are guided by our investment process, one pillar of which is the economic regime Bottom Line we are in. Nonetheless, we remain Our base case remains that we will see underweight risk assets compared to slow, uneven growth but no double-dip our benchmarks. We recognise that the US recession as full lockdowns will not current market backdrop remains more be repeated. Of course, if hospitalisations uncertain than usual and volatility is or deaths become unbearable, a full US still elevated – therefore we are treading lockdown may become inevitable, and cautiously, even as we are increasingly our view for the US will have proven optimistic. too optimistic. Countries such as the UK, Germany and France, which have Click to view and instituted new lockdowns in latedownload full article October, give us plenty of reason to question our base case.
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CHART OF THE MONTH
Chart of the Month: The World’s Carbon Emissions by Country Written by Neil Fatherly | Contact: neil.fatherly@btinternet.com
TWO DEGREES CELSIUS MAY NOT SEEM LIKE MUCH, BUT ON THIS PLANET, IT COULD BE THE DIFFERENCE BETWEEN THRIVING LIFE AND A DISASTROUS CLIMATE. OVER TWO CENTURIES OF BURNING FOSSIL FUELS HAVE ADDED UP, AND MOST GLOBAL DECISION-MAKERS AND BUSINESS LEADERS ARE FOCUSING IN ON CARBON EMISSIONS AS A KEY ISSUE. THIS WEEK’S CHART USES THE MOST RECENT DATA FROM GLOBAL CARBON ATLAS TO DEMONSTRATE WHERE MOST OF THE WORLD’S CO₂ EMISSIONS COME FROM BY COUNTRY. In terms of absolute emissions, the heavy hitters are immediately obvious - large economies such as China, the United States, and India alone account for almost 50% of the world’s emissions. Zoom out a little further, and it’s even clearer that just a handful of countries are responsible for the majority of emissions. Out of the original 30 countries in the main Visual Capitalist chart, six countries show up again as top CO₂ emitters when adjusted for population count: Saudi Arabia, the United States, Canada, South Korea, Russia, and Germany.
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