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Trends in Offshore Wealth

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In This Article
  • The offshore model remains viable because wealth management clients will continue to seek diversification, broad private-banking capabilities, specialized expertise, and discretion.

  • Offshore centers must position themselves not only as possessing skills and expertise that cannot easily be found onshore, but also as embracing full transparency and integrity.

 

Global Wealth 2013

Offshore wealth, defined as assets booked in a country where the investor has no legal residence or tax domicile, rose by 6.1 percent in 2012 to $8.5 trillion, with Western Europe the predominant source and Switzerland the most popular destination. (See the exhibit below.) Despite this increase, stronger growth in onshore wealth led to a slight decline—to 6.3 percent from 6.4 percent, compared with 2011—in offshore wealth’s share of global private wealth. Offshore wealth is projected to increase moderately over the next five years, reaching $11.2 trillion by the end of 2017.

exhibit

The offshore model remains viable because wealth management clients—particularly those in the high-net-worth (HNW) segment (with at least $1 million in wealth) and the ultra-high-net-worth (UHNW) segment (with more than $100 million)—will continue to seek diversification, along with broad private-banking capabilities, specialized expertise, high-quality service, discretion, and domiciles with relatively high levels of economic and political stability. In fact, some wealth that had previously been repatriated, notably by investors based in Western European countries, has partly flowed back offshore owing to the highly differentiated value propositions that offshore domiciles can provide.