As published on finews.com, Monday 22 February, 2021.
A major hurdle for Switzerland's wealth managers in wooing wealthy Americans is set to fall. This would let Swiss players back into a $20 billion market.
The end of a U.S-imposed moratorium of licenses for Swiss wealth managers is in sight, according to Americans Welcome Swiss, a website for U.S. citizens abroad and adviser to Swiss wealth managers. The Securities and Exchange Commission had put new licenses for Swiss and European wealth managers in the U.S. on hold pending data privacy issues.
Swiss data officials have been negotiating with the SEC for some time about ending the moratorium, according to Anne Liebgott, who operates the website. «I'm in touch with several Swiss wealth managers who are prepared to apply for a license as soon as the situation is clarified,» she told finews.com.
Several wealth managers including Reyl, Vontobel, and Rothschild & Co sought U.S. licenses to manage U.S. assets in Switzerland in keeping with U.S. tax laws. The move followed a decade-long dispute between U.S. justice officials and Switzerland over undeclared offshore accounts was buried.
The U.S. imposed the moratorium as a result of data protection rules in Europe dubbed GDPR, which the U.S. felt hindered access to U.S. client data. Because the SEC only requires personal data under justification and would only pass it on to other authorities, U.S. officials and Britain's privacy office in September reached an agreement.
This enables British wealth managers to pass on data to the SEC, under certain restrictions. The British deal is to be replicated for Switzerland's wealth managers, which have increasingly sought U.S. business via SEC-registered entities.
Though experts put the market niche at $20 billion, the lucrative business of banking America's wealthy in Switzerland has hardly grown in recent years. Roughly 40 Swiss firms possess an SEC license, and some – like Lombard Odier, which sold its client list to Vontobel three years ago – have already ditched it.
The U.S. business is viewed as tricky because American advisers and lawyers are frequently the gatekeepers to U.S. business. Observers say that it has become exceedingly tough to make rich Americans move assets to Switzerland after the end of the hide-and-seek with the U.S. taxman.