Offshore Bank Account
When you are opening an offshore bank account you should be careful with the choice of the right bank. Most offshore bank account investors are looking for safety. They want a secure bank. They like confidentiality and privacy.
The best bank for your investments should not be involved in risky activities. The involvement in derivatives and investment banking activities is an alert signal for you. You should avoid banks who are exposed with risky lending activities.
Your bank should befocussed on private banking activities. They should manage your wealth and not doing risky transactions with your money.
Therefore, you should preferably work with banks focussed on pure private wealth management activities.
Your best bank should be located in a secure jurisdiction. In order to find a secure jurisdiction you should consider the country rating lists.
On the above list you will encounter Switzerland with a AAA Rating. Switzerland is a very stable country since many years. No other country having an efficient banking system can offer such a stability for so many years with constant stability.
If you have decided to work with a secure bank located in an unsecure country you are still subject to the country risks. That means that if there are economic problems in this country your bank of apparently secure bank of choice can be the target of a country with financial problems. Therefore, you should first of all select a secure and stable offshore jurisdiction with a reliable government.
You should develop a certain trust to your banking country of choice.
The bank should not have a physical presence everywhere around the globe. Such global banks are exposed to risks. UBS, for example, disclosed offshore bank account information in connections with more than 4’000 offshore bank account clients having tax residence in the USA. UBS was very cooperative with the US Department of Justice because of the massive presence in the territories of the USA.
The biggest and the smallest banks are not always the best. An important ratio to consider is the level of capitalization. Well-capitalized banks are better. We prefer working with banks having a Tier One Capital Ration exceeding 20%. Banks should have enough capital to accomplish the most important liabilities without any problems upon first demand.In Italy, for example, many banks are engaged in risky lending activities. You should check the annual report and find out the tapes of liabilities of the bank.
If your main goal is private wealth preservation you should work with banks focussed on private wealth management. You do not necessarily need a universal bank offering all kind of services. Find out which bank can satisfy your needs and expectations.
Because of dangerous conflict of interest situations in the private banking industry, you should consider the engagement of an external asset manager. You should opt for an independent asset manager acting in your specific interests. If the bank offers many investment products there is a considerable risk that the bank will try to sell you their financial products.
You should not buy the best product for the bank. You should buy the best financial product for you!
The financial markets are full with all sorts of financial products. There is a financial product jungle with all sorts of financial products. Often, there are hidden fees. You need an external asset manager ready to compose the best selection of financial products.
The biggest risks of losing money are two: wrong advice and over-pricing. An honest asset manager should take care on you. You should negotiate an all-inclusive pricing structure based on the number of assets under management per year.
A transaction based pricing can be misused for churning activities. A fair pricing is the basis for circumventing the churning risks connected with too many transactions.
Take your time to investigate. It will be a good investment. The choice of the right offshore bank account is an important decision for the long term. You should meet a couple of independent asset manager and ask critical questions on the private banking industry.
If you do not understand what they are talking about just ask again asking for a detailed explanation. You should fully understand what you are doing. If you do not fully understand an investment product you should not invest. Common sense is very important. Big amounts of money can be lost very quickly.