FATCA: Operational Implications for Wealth Managers



Verdict Financial

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Wealth managers are under fire as US high net worth individuals are the key target of FATCA. As it has developed on its path toward global tax collection efficiency, attitudes have changed as the resolve of the US to implement the act has become abundantly clear, and intergovernmental agreements (IGAs) have added new thought processes to meeting compliance.

Analyze the current situation regarding FATCA compliance and the impact of the changing global tax environment on wealth management.
Interpret FATCA trends within the wealth management industry using Verdict Financials Global Wealth Managers Survey 2012.
Understand the challenges facing wealth managers and how to react.
Assess responses to FATCA from industry peers using company specific case-studies.

How is the competition reacting to FATCA?
How will FATCA affect the client relationship and how should wealth managers react?
Which companies are still accepting US clients and which aren't?
What should a FATCA IT solution incorporate to achieve maximum efficiency?
What are the key challenges facing global wealth managers?

Key Highlights
While the principal threshold for undertaking due diligence on US-held foreign accounts is $50,000, the ultimate aim of the IRS is to target wealthy US citizens holding "high value accounts" that exceed $1m. This focus on higher value targets has brought wealth managers and private banks around the globe into the direct firing line of FATCA.

As of June 2013, the US Treasury has signed IGAs with 16 countries, is finalizing IGAs with 10 countries, and is actively engaged in IGA dialogue with 11 countries and exploring options with 10 more. Compared to the situation in November 2012, the IGA landscape has already changed dramatically.

The global tax information sharing environment has changed as dramatically as the FATCA IGA environment. Not only has the UK created similar FATCA agreements with Switzerland, the Channel Islands, and the Isle of Man but it has also joined a tax information sharing pilot scheme in the eurozone.