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'Remarkable Change' Inlatin Views Of Bahamas

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Bahamian financial services provider yesterday said he had seen a “remarkable” turnaround in Latin American client perceptions of this nation, adding that “there’s never been a bigger opportunity” to attract new private banking/financial services business.

Robert Jensen, chief executive of Old Fort Financial, told Tribune Business that his clients’ ‘love affair’ with Switzerland as a safe haven for their assets had ended, after UBS handed over the names of 4,500 US clients to the Internal Revenue Service (IRS) in 2009.

The Swiss government is trying to secure a similar deal between its other banks and the IRS, and Mr Jensen said he had personally seen “a marked difference” in client attitudes towards the Bahamas as a financial services centre, as they sought to find an alternative haven that respected client confidentiality.

Armed with no hard data, only his and Old Fort’s “on the ground” experience, Mr Jensen said clients were also now asking for referral business to go to Bahamas-based, rather than Swiss, banks.

Indicating that the strategy being employed by Ryan Pinder, minister of financial services and investments, in targeting Latin America and Switzerland, was spot on, Mr Jensen said he was also receiving calls from Swiss investment advisors seeking his - and the Bahamas’ - help in providing client solutions.

And he suggested that the Bahamas seek to attract to these shores Miami-based providers, who offer non-US citizens private banking services, as Switzerland was increasingly reluctant to deal with any clients that a US connection.

Old Fort, a broker/dealer and corporate services provider, still has a ‘legacy book’ of private client business dating back to the 1980s, “the lion’s share” being based in Latin America.

Mr Jensen himself has been based in the Bahamas since the early 1990s, and he told Tribune Business: “One thing that I learned fairly early, and hadn’t changed much since I’ve been here, is that all our clients, particularly the Mexicans, did not have the most positive view of the Bahamas.”

This, he added, was “not based on reality”, but instead lingering perceptions stemming from the 1980s and the views of others, “juxtaposed against their historical love for Switzerland”.

There was a feeling that Switzerland, with its private banking head offices, ‘did everything better” and treated the clients right.

That notion, though, has been subject to strong reappraisal as a result of the UBS case and how Switzerland has responded to other US matters.

“Recognising everything that has gone on in Switzerland, our clients have been alarmed to see the totally impenetrable walls that were around Switzerland have been breached,” Mr Jensen said.

“Even though they’re not at that gate, they’re at the backdoor of the castle, it’s a breach. They see that, and think the country is not as sound as we thought.”

As a result, the Bahamas is figuring more prominently on the radar screen of Latin American high net worth individuals and their advisers as a jurisdiction that respects client confidentiality when it comes to selecting a jurisdiction to manage their assets.

“We have noticed a marked difference in the attitudes to Switzerland and the Bahamas,” Mr Jensen told Tribune Business.

‘It’s been remarkable for me, having spent my whole career here, to have our clients kind of come around after the last 20 years. I think they see the Bahamas, and I know I’m assuming to speak for them a little bit, but they’re realising the Bahamas is committed to their needs, committed to the financial services industry.”

Suggesting that the Bahamas’ increased prominence had not necessarily come about by design yet, Mr Jensen said this nation currently stood out as an alternative.

Clients were “more willing” to incorporate companies in the Bahamas. And, when it came to referring clients to other institutions to hold their business, Mr Jensen said: “Instead of going to a big firm or private bank in Switzerland, they’re asking for referrals in the Bahamas.

“We’ve been able to take some clients’ money and keep it here locally in the jurisdiction.”

While the increase in inquires from Old Fort’s Latin American clients did not represent “a flood, there’s certainly been enough of it”.

And Mr Jensen added: “I do get calls from Switzerland investment advisors, saying: ‘Someone told me about you guys, do you have a solution for us? I don’t know what to do?’. There’s definitely Swiss firms out there looking for solutions, and there’s not a lot of them.”

“In my personal opinion, I think there’s never been a bigger opportunity since I’ve been around,” he told Tribune Business. “This is a real chance for us to seize the day.....

“I think we’ve got a window of time to attract some real business and do some real business.”

Old Fort already sold products to Miami-based providers who offered private banking services to non-US citizens. With Swiss banks increasingly reluctant to deal with such clients, Mr Jensen suggested the Bahamas look to attract these bankers - and their business portfolios - here.

“Right now there is a real opportunity for some of the big firms, Credit Suisse, Julius Baer and Pictet, to attract guys with books of business over here,” he told Tribune Business.

“I’ve talked to them about the opportunities here - bringing over guys that can come over here and live, and bring books of business. Bringing 100 of these guys over here would have a ripple effect on the economy.”

However, Mr Jensen said the Bahamas needed to make it easier for such persons to enter the country and live here, acknowledging that to do the latter could be “hard”. The cost of living also had to be tackled.

Comments

banker 5 years ago

We in the Bahamas Financial Services Industry are sinking lower and lower to the bottom of the barrel in chasing untaxed money. When will we realize that the tax haven paradigm has a limited shelf life?

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