SWISS SEC-REGISTERED INVESTMENT ADVISOR
Interview with Francesco Bernasconi, CEO
Deloitte recently confirmed Switzerland as the world’s leading private wealth management center. Why does Switzerland remain on top despite turbulences?
Going through turbulences is what created today’s Switzerland. As a small country built on the basis of a confederation, Switzerland has always been used to deal with diversity and different political and economic challenges. This has created its character. And this has shaped the people and life in our country. Private Wealth Management is based on 3 things only: trust, trust and trust. And Switzerland over all these years has built, what builds trust: political stability, a sound financial system, one of the strongest and safest currencies, well-educated and disciplined people. In addition Switzerland is known for innovation, top quality and longevity. All these factors made it become a leading country in many industries. Wealth Management is one important one. And without any question: In Wealth Management the above qualities will remain key for the long term and they will remain being associated with Switzerland.
As a Swiss wealth manager, why did you decide to register with the SEC in the United States?
First of all every founding partner of the firm was active in serving US clients for decades. We all lived in the US for a number of years and we still travel there several times every year. We like its people and the dynamic and very competitive culture and market environment. The US is still the wealthiest market globally. The opportunities are immense.
Second: we do very well understand what it means to do business in the US market and what it means if you do not abide by the laws and rules. The registration with the SEC, approved in 2010, is comparable to breathing the air one needs to live. Without it one is out! With the above said, we have everything needed to complement the wealth management needs of globally-thinking US clients including their local advisors.
What particular needs does an American investor have?
One of the first questions we usually get from a new client is: What is your performance? What are your costs?
American investors are generally very savvy when it comes to financial investments. The American market is probably the most efficient, liquid and also most competitive one globally. As a consequence US clients are quite “straight to the point”: They care about bottom-line performance after cost and after tax. They do accept a lower performance if markets are not doing well. They, on the other hand, expect a good performance if markets are up.
One of the increasing needs of US investors is to diversify their investments internationally and to put their money into a bank outside the US. This has lately been driven by the continued globalization of economic activities and financial markets. And US investors are getting more and more worried about some of their specific domestic problems such as the increasing budget deficit and a diminishing economic and political influence on a global scale.
How do you address these needs?
Our service offering is targeted to complement the above. We offer our clients the choice where they can hold their wealth. We have selected a number of very high quality banks that offer competitive banking services. We constantly monitor those in terms of solvability, cost efficiency and service quality, thereby ensuring that our clients get what they are looking for.
Our main business is managing wealth for US clients. Clients can choose between delegating the management entirely to us (discretionary mandate) or by remaining involved in the decisions (advisory mandate). Clients can choose between pre-defined, multi-currency investment strategies or we often customize the portfolio exactly to the investment objectives and risk profile of our clients.
Last but not least, we do offer a state-of-the-art year-end tax reporting, so our clients do not have to worry about filing their taxes in the US correctly. The level of granularity of the report usually saves them quite some costs in the US too.
If you were to give one important piece of advice to American clients, what would it be?
Invest - Do not speculate! 5 steps to achieve this: (1) Do a sound analysis about where to invest until you are totally convinced. (2) Invest for the medium or long term (not for the short term). (3) Stick to your decision even in market turbulences. (4) Review/analyze the investments regularly and adjust accordingly. (5) Work with a reliable, trustworthy professional partner that works and thinks for you and not for his own pocket.
LFA is a Swiss, independent asset management company which primarily addresses persons subject to US taxation. It is registered with the Securities and Exchange Commission (SEC) as a Registered Investment Advisor (RIA)
We offer our services to US citizens and their families, independent asset managers as well as public and private banks. Our relationships with US investors and their banks, keep us current and up to date on all US regulatory and legislative changes.
Our investment process is characterized by a structured, disciplined and transparent process. Our investment strategies focus on international diversification of currencies, regions and industry sectors. Tax and cost aspects are another important factor that influence our decisions.
LFA produces a state-of-the-art tax report that is delivered to its clients at the beginning of each year. The level of detail of this report enables clients to file their US taxes properly and efficiently.
LFA’s team consists of eight dedicated professionals with extensive experience in working with US clients.