The importance of Wealth and Succession Planning in the Current Difficult
Economic Environment for the MENA Region
Etienne Mouthon
Managing Partner
W&Cie
Swiss Arab Wealth Management Forum
2013 10 April 2013
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W & Cie SA
Family Office & Wealth Solutions
The Importance of Wealth and Succession
Planning in the Current Economic
Environment for the MENA Region
Swiss-Arab Wealth Management Forum 2013 Geneva,
April 10,2013
Recent Developments
› The world has become more transparent and is moving towards
the end of bank secrecy.
› Some say it is the end of Switzerland as a major financial center.
› But Switzerland has much more to offer:
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Confidentiality of professional institutions regardless of bank secrecy
Established private banking history
Solidity and financial strength of its banks and institutions
Political stability
Global and sophisticated services designed to answer all Clients’
objectives and needs
› In that context, structuring of investments and estate planning
are essential services that Swiss Financial Institutions offer or
should offer in order to continue attracting new MENA region
Clients and retaining existing ones.
Swiss Arab Wealth Management Forum
2013 10 April 2013
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Why Your Clients Should
Consider Planning
› Once wealth has been created, it needs protection and
enhancement in all regions in general including the MENA
region.
› Private banks have to identify opportunities with professional
advisors that can help Clients meet their wealth planning
objectives. Here are 4 good indicators that may indicate that a
Client might need wealth planning advice:
› Is Client concerned about political stability?
› Is Client concerned with ensuring that assets are distributed according to
his wishes? is he concerned about avoiding probate problems (often long,
complicated and public procedure)?
› Is he concerned that his business may break up after his lifetime?
› Are there assets or investments personally owned by the Client in high tax
jurisdictions?
› Are there specific family issues?
Swiss Arab Wealth Management Forum 2013
10 April 2013
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Threats
› These prompts will help identify a pattern of more general
needs that are derived from certain threats.
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Political risk
Forced succession laws
Divorce
Disability
Claims by business partners
Delays caused by probate
Inability of children or family members to manage the wealth
Swiss Arab Wealth Management Forum 2013
10 April 2013
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So What Happens If Your Client…
› Holds his assets in his single name
› Holds his assets in joint name with his spouse
› Gives a POA to his eldest son
› Has a will
› Leaves everything to his favorite son in a will
› Puts everything in a company
› Holds US securities or real estate
Swiss Arab Wealth Management Forum 2013
10 April 2013
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Wealth Planning Solutions
› Private companies
› Trusts
› Private Funds
› Securitization vehicles
› Life Insurance
Swiss Arab Wealth Management Forum
2013 10 April 2013
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Wealth Planning Solutions: Trusts
› Historically and to our days, the only efficient succession
planning tool has been Trusts.
› Some advantages that a Trust can offer:
› Efficient succession planning
› Consolidation
› Confidentiality
› Asset protection
› In some cases, flexibility to retain some control over the structure
and the underlying assets by the Client
Swiss Arab Wealth Management Forum 2013
10 April 2013
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Wealth Planning Solutions:
Private Funds
› Special purpose vehicles offering flexibility and simplified
regulation for family members wishing to invest together a
pool of assets, whilst keeping separate ownership through the
issuance of units.
› Advantages Private Funds may offer:
› Ownership and control
› Permit involvement and control of wealth
› Flexibility of ownership-units can be held in personal name or in a
structure (trust/foundation)
› Ability to access funds remains in the control of the family
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Efficiency
› Collective investment opportunities
› One legal structure can accommodate a number of custodians but
provide individual unit holder statement
› Consolidated reporting of wealth
Swiss Arab Wealth Management Forum 2013
10 April 2013
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Wealth Planning Tools:
Securitization Vehicles
means a transaction by which assets and
associated risks are contributed to a dedicated compartment of
a securitization vehicle and the owners receive in exchange
securities that can be shares or debt instruments.
› The compartments are completely segregated from each other
(bankruptcy remote) and have their own bank accounts and
financial accounting.
› The rights of the owners and/or debt or bondholders are limited
to the assets of the compartment.
› The advantages of the Securitization vehicle are the following:
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«Securitization»
› Very flexible and not regulated
› Much cheaper than investment funds
› Neutral from a tax perspective
Swiss Arab Wealth Management Forum 2013
10 April 2013
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Wealth Planning Solutions:
Life Insurance
› There are many different wealth planning needs for
which insurance based solutions may be an appropriate
answer.
2 types of insurance solutions:
› Private Placement Life Insurance (“PPLI” or wrappers)
› Universal Life Insurance
Swiss Arab Wealth Management Forum 2013
10 April 2013
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Structuring Services
for the Middle East
› Our experience in the Middle East shows that a very
large number of High Net Worth Individuals are more
and more interested in structuring services for asset
protection and estate planning purposes.
› In addition, such Clients tend to like control over the
structures and some very efficient solutions that we can
provide will offer effective planning together with
flexibility.
› Succession planning can be tailored to adapt to local
considerations such as Sharia laws.
› Although such Clients are in general not concerned by
taxation, their investment in the various jurisdictions are
and will required careful planning.
Swiss Arab Wealth Management Forum 2013
10 April 2013
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The Interest of Your Clients
is Also Your Interest
› Fiduciary structures are usually established for long term
purposes. There is good evidence that once a structure is
involved, Client relationship becomes very sticky. A study by
the Boston Consulting Group found that if a fiduciary
structure is in place, the private banking relationship will, on
average, last 3 times longer.
› Our services compliment and add value to the private bank’s
other services: we provide the wealth structuring to the
holding of the assets and therefore add value to your offering.
Swiss Arab Wealth Management Forum 2013
10 April 2013
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Thank you
Swiss Arab Wealth Management Forum 2013
10 April 2013
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