Despite a chaotic election season and the potential for tax increases, global families are increasingly looking to the United States as a safe haven for their wealth. The reasons, as Delegate Advisors Managing Partner Andy Hart discusses in a recent Family Wealth Report article, are “our stable government and deep respect for the principles behind our rule of law, which include a strong foundation for protection of individual and property rights, the latter providing asset protection.”
While our stable government provides security, Hart stresses that in order to avoid potential pitfalls, advisors working with global families must not only understand the legal and tax implications of bringing assets into the US, but also the cultural differences and attitudes toward investing. “The investment opportunities available to global families often have very different risk and return profiles,” explains Hart. “For example, many venture opportunities in China have strong political backing that from the outset mitigates downside risk and materially enhances the prospects of a company.”
Another factor that advisors must understand when working with global families is the cultural differences in the client-advisor relationship. For example, Hart shared his observation that families may “often avoid giving a direct ‘no’ to advisors, which can be confusing for advisors who are used to more direct feedback about the potential of forming new relationships.”
At the close of the article, Hart shares what’s on the minds of many wealthy global families: the current political landscape and the potential for changes to current laws, including the lifetime gift tax exemption and the laws around valuation of family businesses for transfer purposes. For this reason, Hart says, “many of our families are trying to complete wealth transfer projects in 2016.”
The full article from Family Wealth Report is available to subscribers here.