Managing wealth in a globalising world - the rise of the multi-national client

As families, businesses and people move across the world, they establish links with multiple jurisdictions that inevitably overlap and create complexity for the management of their affairs. Complexity may be driven by social or personal issues within a family, the citizenship, domicile, residence and migration status of the client and their family as well as the financial situation of the client, their family and related parties.

Clients need to consider how they are affected by the following influences on their lives: Family, Business, Property and Social and Community.

Consider the following circumstances:

- Businesses open overseas offices

- Investors take up new business opportunities outside their home jurisdictions

- Children marry or establish domestic relationships with partners from other countries

- Family members study overseas and then put down roots outside their home jurisdiction

- Migrants arriving into a country bring with that migration their links with their home jurisdictions

- People work for multi national companies and may either retire home or retire to countries other than their home jurisdiction

These situations all create complexity that must be taken into account when clients manage their affairs and plan for their day to day administration as well as the impact of disability, longevity, inability to act and death on those affairs.

Australia, as an established multi cultural society with a substantial migration program, is a place where all these challenges arise in normal day to day professional practice for lawyers like Michael Perkins and Arnold Conyer at Diamond Conway in Sydney. In their inbound practice, they are concerned with managing the affairs of expatriates returning to Australia, foreign businesses arriving in Australia, investors and investment coming into Australia and personal and business migrants. In their domestic outbound practice, they are involved with the multi-national connections of Australian residents.

The Society of Trust and Estate Practitioners (STEP) based in London has recently released a research report about "Transparency and Solutions in Cross Border Wealth Structuring".

See http://www.step.org/showarticle.pl?id=2556;n=567

STEP has announced:

"...key trends were identified which will be felt across the industry for years to come:

The Transparency Dividend
The end of secrecy will mean families will seek out advisors and trustees who can master global tax advice. Economic conditions will mean tax competition between countries will increase and the distinction between offshore and onshore will disappear.

Investors and their advisors will choose jurisdictions for tax neutrality, so that investors from several jurisdictions are not subject to the additional layers of taxation that sometimes arise in a cross-border context.

All this requires much more sophisticated tax and regulatory advice where integration is key. This means bringing together the advice from country A and country B to achieve the best outcome overall for the family.

Transforming Trust and Estate Planning into Wealth Structuring
Modernising practices are integrating trust and estate planning into a wider wealth management business. Trustees are adopting best practices in investment management and enhancing compliance processes to reduce risk."

These trends of taxation and fiscal transparency across jurisdictions and the move from focusing on financial and estate advice to more broadly defined  wealth management services are in evidence across the world.

Where people retain links to multiple legal jurisdictions, the management of their affairs may require help from a number of professional disciplines including:

- Law

- Accounting

- Tax

- Finance

- Family Business Consulting

Within migration law, family law, commercial law, corporate law and property law, dispute resolution and trust and estate practice may all be needed depending on the issues involved and the client's objectives.  The first question that needs to be asked is: what is the main concern of the client in the management of their affairs? In order to bring a coherent focused approach to working with clients, Diamond Conway proposes that clients prioritise their affairs and management objectives by considering the following issues:

1.            Personal and Family Representation and Succession

2.            Family Continuity, Governance and Legacy

3.            Wealth Preservation, Enhancement and Transfer

4.            Business Ownership and Control

5.            Financial Security and Compliance

Clients have a choice: they can seek out individual practitioners with the necessary skills and then take the responsibility of integrating that advice with the management of their affairs or they can work with a smaller number of practitioners who offer a broad competence base within their firm that can efficiently deal with higher complexity in clients' affairs within its resources.

Advisers committed to trust and estate practice within the focus of their professional disicipline are best able to assist clients who need to deal with these issues in the management of their affairs.

Diamond Conway is one such law firm, based in Sydney, Australia and we collaborate with Fitzpatricks Financial Advisers to assist their clients with these matters. The firm can work with clients concerned about single issues or in broader strategy lead, consultation driven engagements. It works regularly with counterpart firms focused on efficient collaborative engagement to the management of their clients' affairs.

For more information please speak to your Fitzpatricks Financial Adviser.

Michael Perkins | Special Counsel | Diamond Conway Lawyers

www.diamondconway.com.au