FOREWORD | OUR RESEARCH | 2020 AND COVID-19 | 1. TRANSPARENCY | 2. RELOCATION | 3. FAMILY & GENERATIONAL WEALTH | 4. THE ADVISER OF THE FUTURE | ABOUT BDO
THE DIRECTION OF TRAVEL IS CLEAR AND UNDERSTOOD | PRIVACY CONCERNS PERSIST AND DEEPEN
THE DIRECTION OF TRAVEL IS CLEAR AND UNDERSTOOD TRANSPARENCY
GRAPHIC 4:
The transparency agenda has been central to private client planning for some time.
paramount, but this brings new complexities which wealth owners are still expected to navigate and structure their affairs within.
One UK adviser compares the approach to traffic in London: “you introduce all these regulations, but the result is that traffic is slower”. The tipping point may be closer than one might think. Specifically, concerns over the EU Directive DAC6 on mandatory reporting of cross-border arrangements persist, with one Swiss professional adviser observing that, while the need for tax transparency is well-understood, “there has to be a line in the sand and DAC6 is a huge burden”.
HOWCONCERNED ARE HNWIS AROUND POTENTIAL PRIVACY AND SAFETY RISKS POSED BY TAX TRANSPARENCY AND INTERNATIONAL REPORTING REQUIREMENTS?
Our research reveals a clear understanding and acceptance that transparency requirements are not only here to stay, but set only to strengthen, broaden and deepen. The new reality for private
How, then, are private clients managing their tax strategies to guarantee compliance? Tax regulation is particularly complex, and tax competition between countries looking to attract investment and stimulate economic activity post-pandemic can seem at odds with the punitive measures
“There is a clear understanding that
38%
transparency requirements are set only to strengthen, broaden and deepen”
32%
27%
and sanctions agreed internationally. In some cases, this scenario has prompted a flight to conservatism on the part of wealth owners. There is an appetite for ensuring compliance, to stave off unwelcome surprises later down the line. As one legal adviser points out, “nobody wants another Panama Papers”. We are fast approaching the transparency horizon, beyond which regulation may become onerous, excessive and counterproductive. Wealth management professionals hope that regulation will speed up with time and technology, as there is a need to “remove the grit in the system and get past endless box-checking”.
individuals is that information sharing is more sophisticated, more thorough and more immediate than ever. ‘Real time’ has replaced ‘on request’ and the default setting is disclosure. Globalisation and technology have created an increasingly borderless world for business and individuals. Despite a lag, authorities have gradually been catching up, creating frameworks for inter- jurisdictional cooperation and collaboration. International harmonisation ensures compliance is
2%
very much so
moderately
not particularly / no different to previously
not at all
WORLD OF PRIVATE CLIENTS | NOVEMBER 2020 9
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