Private Wealth Management

Private wealth management is the foundation of The Bahamas’ financial services industry. With its historic commitment to providing high quality service to families that span the globe, The Bahamas is in fact one of the world’s foremost wealth management centres. The strength of the country’s private wealth services has contributed to The Bahamas becoming a mature financial centre, whose services to a global clientele now include the full range of private banking, estate planning, asset management and fund administration. The Bahamas also provides services to the international capital markets, insurance and maritime industry. Corporate registry and legal and accounting services are at the core of the range of services available in The Bahamas. This diversity not only reflects The Bahamas’ long history in providing financial services, which dates back to the 1930s, but it also reinforces the jurisdiction’s ongoing commitment to maintain and grow its presence as a provider of high quality financial services. Furthermore it demonstrates the importance and foresight of the many progressive developments in the jurisdiction as it continues to meet the requirements of an increasingly sophisticated financial services marketplace. These and other essential characteristics were not lost on The Banker, an FT publication, which named The Bahamas The Best International Financial Centre in the Western Hemisphere. The priority that The Bahamas places on making The Bahamas an ideal location for the wealthy to live and conduct business cannot be overstated. The emphasis on development of a services based economy is fully supported by all political parties in the country. With the growth of private wealth and other areas of financial services established as a key focus of the country, The Bahamas has been very careful to ensure that its legislative and administrative frameworks are continually refined, facilitating legislation and products to meet emerging market needs. Examples of the jurisdiction’s progressiveness include: * An innovative Trustee Act 1998 whose provisions set the standard for trust legislation and includes the retention by the settlor of certain powers without compromising the validity of the trust. * The 1991 Fraudulent Disposition Act provides which sets both an appropriate period and the right balance by giving the creditor both 2 years to mount their challenge and the responsibility to demonstrate a fraudulent intent on the part of the settlor. * The 1995 introduction of the Bahamas’ model of an unrestricted fund administrator which set the standard for the delegation of authority to a regulated financial services provider. * SMART©Funds which allows private investment funds to enjoy a supervisory environment which is appropriate to the fund rather than a broad brush regulatory approach. These funds are increasingly playing a role in wealth structures for clients and family offices seeking greater control, transparency and cost control while accessing important investment opportunities. * Long recognized in Civil Law countries, The Bahamas became the first premier common law jurisdiction to introduce Foundations. The Bahamas Foundation allows for private, commercial or charitable use. * Specific Private Trust Company legislation that allows for exclusive interaction between the client and its Bahamian financial services provider with light touch regulation and flexibility to address the unique and varied requirements of families. An independent nation since 1973, The Bahamas marked 275 years of Parliamentary Democracy in September 2004 which ranks it as one of the oldest, most vibrant democracies in the Western Hemisphere. . The Bahamas, as a Member of the British Commonwealth, joins with major economies such as Australia and Canada that maintain important ties to the United Kingdom while exercising its full sovereign rights to pursue its national development goals. The Bahamas is also an active participant in the United Nations and the Organization of American States. The legal system in The Bahamas, modeled on the British pattern and independent of the political process in the country, provides a well-established environment for international business. The highly respected judiciary of The Bahamas includes a Supreme Court with unlimited jurisdiction in civil and criminal matters, a Court of Appeal and a final Appellate Court in the Privy Council of London. It is important to note that the Privy Council of London looks to Bahamian legislation as a primary source on which to base its rulings. The Bahamas’ commitment to maintain the Privy Council of London as its final Appellate Court saw the Privy Council make historic visits to The Bahamas. The Privy Council of London has sat outside of the city of London on two occasions; on each of these occasions, they selected the city of Nassau. With more than 200 banks and trust companies located in The Bahamas, many of the world’s largest and most prestigious financial institutions have branches or subsidiary operations in the jurisdiction, taking advantage of the country’s stable political and economic system. The world–wide reach and influence of these institutions, combined with the entrepreneurial character of the country’s well regarded medium and smaller institutions and related financial service organizations, allow The Bahamas to look at business opportunities on a global basis. The integrity offered by institutions located in The Bahamas provides a secure environment. With personnel committed to the local community, continuity of service is more predictable and secure in The Bahamas, and is the basis of its many longstanding institutional and client relationships. Many of the country’s features complement and support the financial services sector, including a robust information communication framework, a wide variety of Class A office facilities and business support services, excellent flight connections and compelling lifestyle choices, including world renowned residential communities, premier hotels and restaurants. Regulation in The Bahamas has also served the industry well. Here, policy makers and regulators are committed to open and ongoing dialogue with the private sector. This has created an environment designed to encourage the continued growth of the sector through adherence to internationally accepted regulatory principles, and efficiency in the conduct of business. The country provides a tax neutral platform in which there are no income, capital gains and inheritance taxes. There is also no stamp duty on security transactions. As there is

PricewaterhouseCoopers has issued a Supplement to its 2007 **Private Banking/Wealth Management Survey** that looks in detail at the “people issues” facing wealth managers. Entitled, **“Developing a Talent Legacy”**, the survey shows that a shortage of top-class client relationship managers (CRMs) in the world’s wealth management industry threatens to undermine its efforts to keep up with demand. According to the survey, the job of attracting talented skilled CRMs is the biggest challenge for the sector. The survey was carried out last year among 265 organisations in 43 countries. The report issued by PwC shows that 257 respondents answered that “attracting appropriately skilled people” was the greatest challenge to the industry while 199 respondents said keeping skilled staff was the most serious issue. The demand for CRMs is expected to surge by an average pace of 32 per cent globally over the next two years. The Asia-Pacific region is the hottest area, where CRM demand is expected to show a 57 per cent growth rate. Growth in the Europe, Middle East and Africa region is expected to rise by 25 per cent and by 17 per cent in the US, the report said. Survey responses show that the private wealth management sector is continuing to expand, contrasting with other parts of the financial services industry that are being hit by the global credit turmoil.

**PricewaterhouseCoopers** has launched its 2007 Private Banking/Wealth Management Survey. The survey has been conducted every two years for the past 14 years, and PwC describes the latest as its largest, most successful ever. PwC points out that many of the questions were structured in similar ways to those posed for previous surveys, allowing the firm to identify clear trends and track changes in the industry in some detail. The Executive Summary is analysed at a global level, but where interesting / differing regional trends have been identified, these have been highlighted. Furthermore, many of the questions have forward-looking elements, giving invaluable insight into future expectations.

**Steven L. Cantor Managing Partner Cantor & Webb, P.A.** The Bahamas Financial Services Board (BFSB) and the Society of Trust & Estate Practitioners (STEP) are collaborating to host a one-day technical review and practical guidance Seminar that will focus on the wealth planning and management needs of both domestic and international clients. The event will be held in the Seabreeze Ballroom of SuperClub Breezes, on Tuesday, March 20. Sessions will provide an overview of the Private Trust Companies, SMART Funds and Foundations products and services. Others will focus on domestic asset management and wealth planning. Specifically: • **Private Trust Companies:** The PTC is a hot topic, both in The Bahamas and internationally. Come and learn about The Bahamas approach, how it differs to that of competing jurisdictions and factors to be considered before recommending these structures to your clients. Session presentations include how PTCs are established and utilised. *Speakers: Andrew Law, President & CEO, International Protector Group; Michelle Neville-Clarke, Partner, Lennox Paton; Nadia Taylor, Associate, Higgs & Johnson*. • **SMART© Funds:** In an environment requiring greater regulatory oversight, The Bahamas SMART Fund meets the needs of a range of clients. For those managing assets, providing seed capital or administering a family office, see why consideration should be given to the benefits of SMART funds. Hear how SMART funds can meet the needs of your clients. Session includes a formation overview. *Speakers: David Thain, Managing Director, Arner Bank & Trust; David F. Allen, Associate, McKinney Bancroft & Hughes*. • **Foundations:** This estate planning tool enjoys great familiarity in civil law countries and may now be established in The Bahamas for private, charitable or commercial purposes. Presentations will consider why so many common law jurisdictions are introducing foundations and how they are established. *Speakers: Bryan Glinton, Partner, Glinton Sweeting O’Brien; Heather L. Thompson, Partner, Higgs & Johnson*. • **Domestic Asset & Investment Management:** Examine a typical portfolio; review investment opportunities and strategies, and products and services. Look at the range of advisory and management services for institutional investors and individual clients. *Speakers: Ken Kerr, Chief Executive Officer, Providence Advisors; Anthony Ferguson, Principal, CFAL (invited)*. • **Domestic Wealth Planning:** Estate planning is an essential tool for everyone. Learn how trusts and wills can be used to protect, preserve and transfer wealth for Bahamians. Session includes a look at the financial planning process. *Speakers: Dianne Bingham, Manager-Private Banking, Scotiabank; Ursula Rolle, Assistant Vice President, Fidelity Merchant Bank & Trust; Tanya Hanna, Partner, Graham Thompson & Co.*. **International Intermediary** International Tax Attorney Steven L. Cantor, Managing Partner of Cantor & Webb P.A., is a featured speaker at the Seminar. He will present on the **Use of Bahamian Products for Private Wealth Management**. Cantor & Webb is a Miami-based law firm focused on the representation of high net worth international private clientele and international businesses in the areas of tax and estate planning, international and domestic real estate and probate matters and commercial matters. Mr. Cantor has lectured and has written extensively on international tax and estate planning and the structuring of foreign investment in United States real estate. He is a member of the Tax Section of the Florida Bar and the Tax, Real Property, Probate and Trust and International Sections of the American Bar Association. Mr. Cantor is the founding member of the STEP Miami Branch and also has served as the Branch Chairman and as a member of STEP Worldwide Council. He is also a founding member of the annual STEP Caribbean Conference Steering Committee.

**Theme – International Financial Centres (IFCs): The Essential Piece in the Global Economic Puzzle** The 2007 ***STEP Caribbean Conference*** is being held in Grand Cayman, Cayman Islands on 14-16 May. Grant Stein, Chairman of the 2007 Conference announced recently that the theme of the 2007 conference has been selected to stimulate discussion among trust professionals about the importance of International Financial Centres (IFCs) as essential partners in global business. *“Historically, IFCs have been seen as secondary players in the world of international finance but this year’s conference is designed to highlight the vital contribution that we make to the global financial services sector”* stated Mr. Stein. *”Tax and jurisdictional neutrality are important factors in any cross-border planning and IFCs provide ideal locations for the neutral platforms that are essential in so many genuine multi-jurisdictional structures.”* The ***STEP Caribbean Conference***, now in its 9th year, has gathered together an impressive array of international speakers for what promises to be a thought-provoking and stimulating conference. With the 2006 conference in Bermuda being the largest ***STEP Caribbean Conference*** to date, Cayman is confident of similar success with sponsorship and delegate numbers already tracking well. See link below for the Presenting and Other sponsors, as well as information on the agenda. Topics for 2007 include an extensive overview of *“The Levin Report: Fact, Fiction or Simply Politics”*, *“The Modern Family”* and *“Dealing with Difficult Clients”*. Speakers include Shan Warnock-Smith QC, Mark Bridges, Peter Larder and Richard Pease, STEP Worldwide Chair. The 2007 Conference will also examine macro issues facing STEP professionals worldwide with speakers coming from the US, the UK, and Europe. Back by popular demand, is international business and finance professor and Director of the Global Perspectives Program at Goizueta Business School of Emory University, Dr. Jeffrey Rosensweig, who will examine the economic and global impact of the baby boomers turning sixty. Delegates are expected from all of the Caribbean Finance Centres and they will join a large contingent from host country Cayman Islands. In the past delegates from The Bahamas, the BVI, Bermuda and Barbados have joined large groups from the UK and Europe.