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Click on relevant links below to access further information from Coutts September's Article by Coutts - Wealth Management Specialist Services for Americans in Britain
Coutts is the international private banking arm of The Royal Bank of Scotland Group, and manages assets for some 98,000 clients worldwide. Coutts offers a complete private banking service that is professional, innovative and flexible in responding to individual needs, utilising an extensive range of investment, fiduciary and banking products. With offices in the UK , Asia , Continental Europe, the Middle East and various offshore jurisdictions, Coutts has particular expertise in financial planning for clients with an international asset base. Click here to return to the top
The term “Wealth Management” is an over-used one, most often heard from Private Banks when selling their services. If you are used to the personal attention of a Private Bank in the US and/or would like to consider utilising one now that you are in the UK, you can be faced with a wide variety of options. Why Would You Consider Wealth Management Services? Increasingly, affluent people with insufficient time, inclination or expertise to manage their own financial affairs, have been turning to a Private Bank to assist them. For an American in the UK, particularly if you are newly arrived and need help with understanding the most effective way of structuring your financial life, the advice and guidance of an experienced private banker who takes the time get to know you and your family's needs, can be invaluable in helping you to avoid some of the early financial pitfalls that exist for Americans in Britain. In addition, a good Private Bank can help you with such diverse requirements as opening a chequeing account with linked credit cards, finding a house, organising home insurance and structuring your assets tax efficiently. What Is A Private Bank? "Private
Banking is also a term that you hear everywhere and covers organisations
which range from large, well-known, multi-nationals to small, boutique
companies that out-source the physical custody of the assets that they
hold and manage." To many private banks, Private Banking (wealth management) means Asset Management, usually via in-house investment management companies and often using in-house funds. Additional services can be offered but only if an amount of money or assets is actively managed, the minima required varying greatly from bank to bank. “High Street Banks” ( the largest retail banks ) will offer private banking services which will be primarily an up- market chequeing account service, usually with a fixed fee, with access to further services, where required, at additional cost, often delivered through further bank officers. These are not always geared to the particular needs of the US individual. There are a whole host of additional options in between these two extremes. The degree of practical advice and guidance provided again varies enormously from bank to bank but, depending upon your circumstances, you should ideally seek someone (good wealth management is all about the personal relationship you build up with the Private Banker) who can assist you with the following : • Opening you a chequeing account and credit cards, understanding that you haven't got a long credit history (if you have one at all ) in the UK and maybe do not have verification of your UK address via the usual utility bills. • Providing tax advice or working with you and your tax adviser, to set up the recommended account structures in the UK and outside (“offshore”) and help you with the efficient cash management of these accounts. • Liaising with your employer where necessary, concerning the instigation of such structures, or to provide you with corporate advice and banking should you be setting up a business here. • Finding a suitable home, considering whether it is beneficial to buy or rent and providing you with the finance in a variety of currencies for either if required. • Organising competitive home and life insurance for you and your family. • Reviewing your existing investments and future aspirations and recommending suitable, market-leading solutions that are appropriate for US residents of the UK. • Reviewing your will and estate planning arrangements and recommending any amendments that are advisable having moved to the UK. • Providing flexible solutions that can be tailored to your individual circumstances i.e. if one of you is an American and one British, providing advice on dealing with the implications of this from both a US and UK perspective. • Providing the practical experience of dealing with the numerous, often subtle, differences between living in the UK and the US and, if you so desire, by helping you get in touch with expatriate organisations and social groups of US citizens living in the UK. Am I Wealthy Enough To Consider A Private Bank? To consider a private bank's services to undertake wealth management it would be reasonable to assume that you need some wealth to manage. The amounts required vary significantly and when considering potential private banks you should clarify this point early on. One important early distinction to make though is between those banks that have a “wealth criteria” where you are expected to be of a certain level of ( usually liquid ) means to begin a relationship and those banks that are less concerned with your total wealth and more with the actual amount to be held and managed by them immediately. A fixed minimum amount is typically set for opening an account with these banks. In this case, it is more likely that services such as chequeing banking, credit card provision and mortgage finance may not be sourced in house, if at all, so you might find it necessary to have more than one financial relationship. You should consider which of these approaches is most suitable for you, although if you are newly arrived, all else being the same, it is likely that your first financial requirement may well be opening a bank account so the former approach may suit you best. To help you consider choosing a Private Bank you might like to seek answers to the following : Questions To Ask A Prospective Private Bank (er) • Are you familiar with US tax issues and can you apply them to any services that you might recommend? • Can you “manage” any need I might have for UK and offshore ( non UK or US ) accounts within your own team? • Can you deal with both US and UK tax reporting on any services sold? • Can the financial relationship continue, if I so choose, when I return to the US ? • How many clients do you look after personally? • What independent verification, such as industry awards, does your bank possess that helps confirm the quality of your services? • When considering the security of my money, how large is your banks balance sheet?
• If I was to undertake a wide variety of services with you, how many “points of contact” with your organisation would I have? The above is by no means an exhaustive list of possible services available but does give you an indication of the general breadth of options open to you in the UK . Many Americans on arriving here will comment on how expensive it is to live here, particularly in London, so it is obviously highly advisable to ensure your wealth is managed as effectively and tax efficiently as possible.
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