Trade body set to lobby for fairer prices
Advisers in several countries say it is time for the industry to form a united front
A trade association has been cre-ated to serve the wealth management community. It will initially offer adviser training but plans to go on to lobby governments on issues such as tax policy.
The not-for-profit trade body, the Association of International Wealth Management, will pool training services available in parts of Europe.
Its president will be Philip Marcovici, chief executive of LawInContext, the online training arm of legal firm Baker & McKenzie.
He said: “At this stage, the association is offering education, training and certification in Switzerland, France, Germany, Italy, Monaco and the UK. But we want to take it to the US, Singapore and Dubai.” Marcovici confirmed that the backers of the association wanted it to evolve into an organisation with broader aims: “I believe our association should start to lobby governments on behalf of wealth advisers and their clients.”
He said banking associations, rather than wealth advisers, tend to lobby on tax issues: “I believe it is time advisers got more directly involved in that kind of thing.”
Wealth advisers in several countries have been discussing the idea of setting up a trade association for years. Last August, UBS, Barclays Wealth, Capgemini and Scorpio Partnership, a consulting firm, told Financial News that the time had come for the industry to form a united front.
The new trade association will, at the outset, call on the services of Azek, the Swiss institute for the training of analysts, and UK-based Central Law Training. Marcovici’s LawInContext will contribute on-line legal information, knowledge management and training services tailored to client requirements.
The certified international wealth manager programme put together by the three advisers will be offered in the UK from next month. It already exists in several other European countries. Marcovici said advisers could expect to receive diplomas from his trade association after two years of study. A range of topics would be covered, such as relationship management, derivatives and tax.
He said advisers often failed to measure up to client expectations. A poll published last month by accounting firm PwC revealed an admission by 58% of advisers that they lacked confidence in issues relating to tax. Around 70% of advisers are given less than 10 days training a year.
Private banks also believe that industry-wide training would relieve the shortage of wealth advisers in certain parts of the world.
In due course, Marcovici said the wealth advisory industry ought to be more directly involved on lobbying for the interests of their clients.
He praised the way in which the Society for Trust & Estate Professionals, as well as several legal firms, lobbied against the UK Government’s more extreme efforts to tax non-domiciled residents this year. But he argued that a trade association equipped to present arguments on behalf of wealthy tax payers could have toned down the unwise ferocity of the proposals much earlier.
Wealthy individuals said they did not object to paying a proposed £30,000 (€38,000) fee to avoid tax on overseas earnings – they objected to the way HM Revenue & Customs threatened to examine the contents of their family trusts. They remain suspicious that the Revenue will try to reintroduce the idea at a later stage.
Another lawyer agreed a trade association could have helped to head off the problem. It could have also spotted the potential tax bill non-dom investors could face by paying fees to UK advisers out of overseas earnings. The British Bankers Association ended up spotting the problem and the Treasury has agreed to amend its proposed legislation.
Wealthy individuals are facing an even tougher approach from the tax authorities in Germany, which can claim 60% of earned income. The German tax authorities have suggested increases in tax relating to investment gains and inheritances, amid uncertainty over how and when the changes will be implemented.
Germany is pushing for disclosure of sums in tax havens such as Liechtenstein and Monaco. Other tax authorities have followed suit. Murat Ünal of advisory firm Funds@Work said German tax uncertainty had produced difficulties for both the fund management and wealth communities.
Regarding the general need to introduce a trade association, Mark Kibblewhite, head of UK private banking at Barclays Wealth, said last year: “As an industry we have a responsibility to respond to the increasingly complex needs of our clients by raising standards through training and more structured dialogue between the industry and government and regulatory bodies.”
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