The Silver Lining as Banks Say “No More Americans”

The first time I stepped foot into one of the famed, private, Swiss banks was in February 1999. I arrived at the stately headquarters of Julius Baer in Zurich. I was accompanied by a Swiss independent-wealth manager who was my host for the week. He was a young guy named Robert Vrijhof.

When the meeting got underway with one of the Baer family, the banking executive turned to me and, in perfect English, asked that we conduct the rest of our conversation in French. Zurich is the epitome of a sophisticated international city. It’s not uncommon to hear German, French, English and Italian spoken regularly.

I was a bit intimidated by his request, but I held my ground and informed him that my colleague, Mr. Vrijhof, only spoke English and German. I never mentioned that my language skills were limited to English and some broken Spanish.

Such were the experiences of old-school, private banking in Europe, known for its stuffy atmosphere and somewhat aloof client service. As large private banks are kicking American clients to the curb on the eve before the implementation of FATCA, there is a better way to get all of the benefits of private banking and none of the drawbacks.

The New Face of Private Banking

As American clients are being asked to leave traditional private banks in Austria, Singapore, Switzerland and Denmark because of the onerous provisions of FATCA, they are finding better service and better investment advice from a boutique group of advisors – independent asset managers (IAMs). These investment managers, like Rob Vrijhof, who so kindly introduced me to bankers around Zurich over a decade ago, aren’t tied to a particular bank. Rather, they are tied to their clients – your needs come first.

Working with an independent asset manager comes with all the benefits of traditional private banking … but without any of the negatives.

You see, private banking used to mean that unless your account carried a balance of $5 to $10 million, your asset manager could change at any time … without any notice. Likewise, the name of your customer service contact changed frequently as younger people at the bank were promoted or left for other opportunities.

In fact, I used to always joke that you needed to know the names of at least five people in a private banking department. Why? Because most of the time the one person you wanted to speak with would be on vacation because of the six to eight weeks of leisure that employees enjoy in countries that are private-banking havens.

Few to none of those annoyances arise when you work with an independent asset manager. Here’s why …

Entrepreneurs Will Always Beat Bureaucrats

Independent asset managers are entrepreneurs at heart. Many have started their own businesses after gaining deep experience in private banks or large investment houses. They recognize that those two business models don’t properly serve those looking for lower account minimums with the superior service found at smaller firms. Most Swiss independent asset managers feature tight, professional teams of four to five deeply experienced members.

With the average firm typically holding less than $1 billion under management, the goal of IAMs is not to be another UBS or Julius Baer. Rather, knowing and serving the customer well is the highest priority. And with all of the banking changes, many independent asset managers have decided to fill the void by catering to Americans that have been cast off by large private banks.

These managers are going about it the right way. They are registered with the SEC and they work with the very same private banks that decided to say good-bye to American clients. While these private banks don’t want American clients any longer, they are happy to provide back-office services for independent managers – such as holding the money in custody at the bank, executing all the investment trades, creating and sending compliant financial statements, and more.

IAMs provide all the efficiency of the big name banks without any of the hassles, and they provide personal service from an investment manager whose income is tied directly to how they perform for you – rather than for the shareholders. To me, that’s exactly how it should be.

In Wealth & Prosperity,

Erika Nolan
Executive Publisher, The Sovereign Society