The State of Wealth Management in 2017

Martin Litwak of Litwak & Partners, a law firm at the marcus evans Latin Private Wealth Management Summit 2017, discusses how the new legal environment and the new practices are impacting private wealth management in Latin America.

“Tougher compliance rules, increased transparency and automatic exchange of information have dramatically transformed the legal environment in the wealth management field making this last year a very challenging one for most wealthy families, especially those based in countries that have approved tax amnesties (i.e. Chile, Brazil, Argentina, Colombia, Peru, etc.),” according to Martin Litwak, Founding Partner, Litwak & Partners.

Litwak & Partners is a law firm attending the marcus evans Latin Private Wealth Management Summit 2017.

What are the challenges that Latin American families are facing in international wealth planning right now?

The main challenge has to do with the fact that – at least in those countries where tax amnesties have been organized – most families have all of their assets duly declared in their country of residence, which means that now offshore and onshore estate and succession planning must be consistent. Many families have been left with local and international wealth planning structures that are not consistent with each other and consequently are not working well with each other.

Most of the largest and most traditional trust companies are making it clear to clients that they do not provide advisory services but are limited to incorporation and administration of the legal/fiduciary structures; while domestic legal and accounting advisors do not necessarily have the expertise, experience or inclination to proactively take care of international issues.

To deal with this situation, our firm has developed a new service called Wealth Structuring Program®. This program is dedicated to providing comprehensive legal advice as well as fiduciary and administration services to high net worth and ultra-high net worth families; with the ultimate objective of covering every wealth structuring need they might have. This way, we are able to meet all the planning needs of our clients in the most efficient way, reaching the consistency and coordination needed and complementing the services local lawyers/accountants provide. At the same time, we also save a family member from spending time coordinating the services from different legal and fiduciary providers or that the responsibility ends in the hands of a family advisor without the required expertise or resources.

Going back to your question, another challenge families are facing is increased taxation and less privacy (which, in Latin America, implies less personal security).

What are the benefits of having some assets offshore?

Jurisdictions traditionally considered as offshore international financial centers have stronger protections of secrecy and privacy. In the case of offshore assets, it is far better to structure them offshore too. Our clients usually pursue three objectives: privacy, tax optimization and succession planning. If they value secrecy the most, regulated investment funds (perhaps with their shares being publicly traded) are better than trusts. If succession planning is more important, a trust structure might be the best solution. We try to identify what matters to them the most, but they must also understand what can and cannot be achieved in this new transparent world.

How is the economic landscape impacting this space?

After 10 years of growth, the economies in the region are not as successful anymore. Governments are devaluing their currency. The environment is more risky. The next few years will be tough, with more mergers and acquisitions, as prices will be cheaper. Most of our clients now own distressed assets, real estate and interests in private equity funds. This trend will continue for a couple of years.

About the Latin Private Wealth Management Summit 2017

The Latin Private Wealth Management Summit 2017 it is the premium forum bringing leaders from Latin America’s leading single and multi-family offices and service providers together. Taking place at the Trump Ocean Club, Ciudad de Panama, Panama, April 27-28, the Summit offers service providers and executives from single and multi-family offices an intimate environment for a focused discussion of key new drivers shaping the future of the industry. The Summit includes presentations on asset allocation and diversification strategies, the natural cycle of an enterprise, economic perspectives for Latin America, and family and business succession.

For more information please send an email to alejandrad@marcusevansmx.com or visit the event website at: http://events.marcusevans-events.com/latin-pwm-summit/

Please note that the Summit is a closed business event and the number of participants strictly limited.

About marcus evans Summits

marcus evans Summits are high level business forums for the world’s leading decision-makers to meet, learn and discuss strategies and solutions. Held at exclusive locations around the world, these events provide attendees with a unique opportunity to individually tailor their schedules of keynote presentations, case studies, roundtables and one-on-one business meetings. For more information, please visit www.marcusevans.com

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