Can Singapore Private Banking Replace Swiss Private Banks?
Author: Patrick Winters

Singapore private banking has grown massively over the past
decade. Assets under management at Singapore private banks
have grown to around 300Bn, 6 times what they were 10 years
ago. It is estimated that Singapore manages around 5% of
the world's private wealth, while Swiss private banking
manages around a quarter.

Singapore has benefited from tight bank secrecy regulation,
in addition to a rise in the number of Asian millionaires,
especially the type that want to invest with private banks
and financial instruments rather than in property.

Yet in response to demand from the G20 group of developed
countries, Singapore has promised to rethink its ultra
private secrecy laws. Like Switzerland, Singapore has to
walk the tightrope between keeping its sovereignty and
international acceptance of its laws and banks.

One of the reasons why Singapore has grown is because it
already was a large financial center in its own right.
Unlike smaller tax havens and dependencies of other
countries which have been accused of ''inventing'' laws to
benefit from capital flight, Singapore is a long-standing
trading hub and center of international financial
settlements.

There are several arguments in favour of Singapore keeping
its privacy laws. Many private banking clients in Singapore
are very powerful people among neighbours like China,
Indonesia and Thailand. It's in their interest to ensure
that Singapore bank secrecy is not relaxed. Furthermore,
Singapore is an international financial center - it cannot
be blackmailed in the same way as other jurisdictions.

However Singapore has made concessions, and may not
necessarily see its future in harbouring Western tax
evaders. Singapore has signed TIEAS with a number of
countries and promised to adopt article 26 of the OECD
model tax convention on information exchange over tax
matters.

After Swiss banking secrecy was put under the spotlight, it
was widely reported that bankers were urging a massive
flight of capital to Singapore, where bank secrecy rules
still held strong. But in reality, basing any structure on
bank secrecy is like building a house on a fault line, it's
bound to change. The smartest investors instead used
techniques which do not depend on bank secrecy in any
single country.

Savvy private banking clients are now using distinct
structures which operate independent of bank secrecy such
as investing through trusts or trust companies.

Further, the reasons for banking in an offshore centre like
Switerland do not depend entirely on tax. In fact the
biggest reason is security. Hundreds of banks have been
going under in the US, not Switzerland. Investors are also
escaping from currency devaluations, civil forfeiture and
frivolous lawsuits.

Singapore wealth management is certainly growing in
sophistication, but it is still in a learning phase. During
the mid 2000's when Singapore's private banking industry
was growing rapidly, it was alleged that ther were not
enough bankers to meet demand. Singapore private banks
were instead employing local hairdressers and carsalesmen
with good people skills and turning them into private
bankers.

Singapore private banking is modelled closely on Swiss
private banking, even down to its family trust law. In
terms of weathering geo-political events like the war on
bank secrecy, Singapore may have to follow the Swiss lead
also.


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Find out more about your confidential private banking
options at this great resource on Singapore private
banking:
http://www.capitalconservator.com/private-banking/singapore-
private-banking.php