Interview with Oliver Hohermuth, Director
Why is the US market still attractive for Swiss banks?
After the implementation of FATCA in 2010, Swiss banks have been under pressure and in fear of US clients. Many chose to part ways with their US clientele, closing accounts without offering alternative solutions. But some smaller banks are still finding opportunities in this key UHNWI market. What is their approach?
Based on global wealth reports, North America is still the region with the highest average wealth in the world (34.7%). The market has grown 18% in the past three years and the U.S. population of UHNWI is the largest worldwide, with more than 2,000 individuals representing approximately USD 3.3 trillion. This makes the U.S. a highly interesting but also challenging market for independent investment advisers registered and regulated by the SEC.
Swiss banks are still attractive for foreigners as Switzerland is one of the most sustainable, resilient, and stable economies in the world with a strong currency and a trustworthy and reliable legal system. While most developed countries are fighting high unemployment and high budget deficits, Switzerland is standing out as a rare example of solidity and safety. Furthermore, Swiss banks have a cachet because of the "culture of confidentiality" that is part of the national character.
Recent data provided by the Swiss National Bank shows that Switzerland remains the leading player in the global cross-border private banking market. The volume of assets held by individuals with Swiss banks has seen growth over the past few years reaching approximately CHF 3,000 billion.
How do Swiss financial advisors attract international wealthy clients, particularly from the US?
A financial adviser has to be able to service U.S. clients in a fully compliant fashion, including full-fledged tax reporting. Reyl Overseas started serving U.S. clients as an SEC registered adviser as early as 2011. We are offering added value such as international investment solutions that are seeking portfolio diversification by leveraging our local expertise in international markets, especially Asia and Europe, as well as providing direct access to such markets in local currency. American asset managers are traditionally home-biased and while they have products focusing on emerging markets and Europe, they tend to find more comfort in USD denominated investments. Opening a foreign currency account with an American firm is often still completely impossible. The U.S. regulator also limits certain types of investments for U.S. domiciled investors, for example holding physical gold or other precious metals. It is also important to have a global service offering from advisory to discretionary portfolio management etc.
Geographic, as well as currency diversification are key to success with U.S. clients. The world is changing and growth and power are globally shifting. Having all eggs in one basket within the same jurisdiction is becoming increasingly risky.
What is key for a boutique Swiss bank when developing a US clientele?
Since 2011, Reyl Overseas, Ltd. has been set up to respond to the needs of U.S. nationals and taxpayers worldwide. As a Swiss company, we are ideally positioned to offer our clients the full extent of REYL’s international wealth management expertise.
REYL differentiates itself from other bigger players not only because it has strong entrepreneurial DNA but also because it is a family owned business. The group expertise and defined presence throughout the United States, Europe and Asia is another a key advantage. From one generation to the next, the bank has experienced organic growth, vertically focused on entrepreneurial values and a strong Anglo-Saxon management spirit. It matches perfectly with the U.S. mentality and the U.S. way of doing business.
Reyl Overseas Ltd decided to open its first US branch in order to be closer to its client base in the US.
Reyl Overseas, Ltd. aims to grow organically through its existing client network and with the support of its business partners. It has a unique business model, in line with the hands-on personalized approach characterized by the Group, it offers U.S. clients multidimensional value-added services that go beyond Wealth Management. It also benefits from the groups offering such as Corporate Advisory & Structuring Services (merger & acquisition, capital & debt raising, capital restructuring & optimization, corporate debt structuring), Corporate & Family Governance (succession & estate planning, family governance, cost optimization, concierge services) and Asset Custodian Offering dedicated to institutional clients (IT, operations, legal advice, management & research). Finally, the successful track record of RAM Active Investments, its family of funds, will also help to diversify the offering to its entrepreneurial clients, finding solutions in various areas of wealth management.
Simply an evidence to keep working with US clients!
Due to extremely strict U.S. regulation implemented by the Obama administration, most of the Swiss banks have stopped their activities within the United States. As a result, the American citizen is often being left out without any international advice possibilities. As afore mentioned, the United States is home to the largest population of billionaires worldwide: 69,560 UHNWI*. The American economy is a large and very attractive microcosm of entrepreneurs who want to extend their business and banking relations internationally. Foreign investors are also willing to establish or strengthen their activities in the United States.
With its capacity to incorporate the entrepreneurial dimension of its clients, and its extensive experience in merchant banking, Reyl Group ensures a full range of services supplementing wealth management activities. Adding to that a strong Anglo-Saxon culture and in-depth knowledge of the business in Europe, Asia and the Middle East, REYL is positioned to replace the bigger players that turned their back on this fruitful market.
Beyond the FATCA fear, Swiss private banks and banking in Switzerland can still add a lot of value for tax compliant U.S. clients: quality management, service excellence, a culture of discretion, trust, and entrepreneurial spirit.
*defined with at least USD 30 million in net assets.
About REYL Overseas Ltd
Founded in October 2011, REYL Oversea, Ltd. is a company under Swiss law regulated by the Swiss Financial Market Supervisory Authority (FINMA) for all aspects relating to the Swiss Money Laundering Act, registered as an Investment Adviser with the Securities and Exchange Commission (SEC).
➨ Get in touch with Oliver Hohermuth for further information and an initial conversation
Reyl Overseas Ltd.
Talstrasse 65, 8001 Zurich, Switzerland
T: +41 58 717 94 00 F: +41 58 717 94 01
333 Lee Parkway, Suite 626, Dallas, TX 75219, USA
T: (214) 665-9426 F: (214) 665-9590
Minimum amount of investment:
Our team combines first-hand knowledge of U.S. and international markets, providing financial expertise and exceptional personal service with a refreshingly innovative, flexible and transparent approach.
Oliver E. Hohermuth - Director
After almost 15 years in private banking, it is my pleasure to advise and guide my clients through an ever changing world of international wealth management. From my early days at a Swiss domestic mortgage lender, through my time at Credit Suisse Private Advisors in Zurich and Vontobel Swiss Wealth Advisors in Dallas, Texas, to my today’s assignment as Senior Investment Adviser Representative for Reyl Overseas in the United States, the sustainable and long-term-focused growth of my clients’ portfolios has been my number one priority. To shelter our investors’ wealth from the storm and keeping their wealth on a protected, resilient and fruitful path for generations to come.