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Expat Investor : October 2007
Packing a powerful investment punch We reveal what the top offshore banks' investment managers can do for your wealth aims and objectives. Successful investment management can rest on the skills and resources of your manager. Increasingly, retail offshore banks are joining the ranks of private banks to offer investment opportunities to their clients. Here we reveal some of those strategies on offer from private and retails banks alike. To begin with Adrian Hick, a senior manager from Lloyds TSB Offshore's private banking division, explains that clients can benefit from the services of a dedicated private banking manager for those with over £350,000 in investable assets. And a discretionary managed portfolio can be set up with an investment of £250,000 or more. This Bank claims to be flexible in the mix of assets that it recommends to clients, while at the same time being fully aware of clients' time of life and attitude to risk. "We seek to match the stages of life with the appropriate assets." Mr Hicks expounds further on strategic approaches beginning with age. "Younger people might start investing with the sole objective of capital growth. Often they will the GIS philosophy is to know a fewer number of managers much more intimately. World-class managers are selected and monitored via a rigorous qualitative process in each of the major asset classes, including alternative investments, and we 'manage the managers' to ensure an optimal portfolio blend for our clients." GIS is a service, not a product, and, as such, clients retain direct access to their RBC portfolio manager, who fully understands their needs and requirements. "Our proprietary client discovery tools will ascertain the client's objectives and risk tolerance and suggest an idealised asset allocation that is the starting point for further discussion. Once agreed, the portfolio manager will use this information to construct the client's portfolio using the various building blocks managed by our external advisors. This methodology produces a diversified and yet focused portfolio that allows RBC to deliver two key requirements to the client: excellent service and solid performance." RBC says that the strength of the INVESTMENT BANKING expatinvestor.com 6 EXPAT INVESTOR October 2007 offering lies in its adaptability. Depending upon portfolio size and tax requirements, portfolios can be constructed from either funds or segregated models and offered in multiple currencies, and the proposition is offered both onshore and offshore. In all cases, RBC retains custody and control of the assets allowing for consolidated performance reporting. "Normally, for private clients, access to these world-class managers and their institutional approach to money management would either be unobtainable or very expensive. The RBC Discretionary Investment Management solution is able to provide this access whilst retaining the benefits of a direct client relationship -- all at a fair cost," says Mr Upsdell, concluding that such a solution offers, "The very best of both worlds." Standard Bank Offshore's Director of portfolio management is David Gorman, and he and his team advocate a partnership approach for bespoke investment solutions. "At Standard Bank we pride ourselves in intimately already have enough income to meet their expenditure, and they want their capital to keep pace with and beat inflation. In this case, longer- term and potentially more volatile investments will be proposed, including holdings in equities or equity related investments. The longer time frame helps to smooth out any short-term fluctuations in value, as long as the client does not unexpectedly have to call on the funds. "As people grow older their commitments and responsibilities tend to increase as they take on property ownership and raise a family. At this stage, the attitude to risk often changes and we often agree upon a more balanced approach to asset allocation with more bonds being held. "As people approach or enter retirement the asset mix might move further away from more volatile investments towards more stable financial media that can offer an income, perhaps to supplement a pension. Again, bonds may be appropriate, together with an appropriate cash reserve." Another bank committed to personal relationships is Royal Bank of Canada (CI). Ed Upsdell is the Managing Director of the Bank's discretionary investment management division, and he tells Expat Investor one of the key differentials that distinguishes the private client investment industry from its institutional counterpart, is the direct access private clients have to their portfolio manager. "The trade off with this access, however, is that the client relies on the talents of one, or maybe a couple of, individuals to manage their assets across a broad range of asset classes and geographies." RBC Investment Management believes that no one person or company can be an expert in all markets at all times. To which end, four years ago the Bank introduced an "open architecture" approach to portfolio management, called Global Investment Solutions (GIS). Mr Upsdell explains, "To some, open architecture means using a fund-of-funds and spreading assets across 50-60 different managers, but