In this podcast, Blake interviews Dominique Spillman, the CEO of Swiss Partners Advisors. They discuss the benefits of Swiss Banking for asset protection, as well as other strategies to protect assets.
Blake:
Welcome to The Offshore Podcast where we interview investment advisors and trust companies from all throughout the world who help to safeguard your assets from lawsuits. Today, we have a very special guest, Dominique Spillmann. Dominique is a registered investment advisor. He’s also the CEO of Swiss Partners Advisors. Dominique, great to have you on the show today.
Dominique:
Hey, good to be here. Thank you Blake.
Blake:
So Dominique, we’ve known each other for a while now, I believe I’ve sent some clients your way. Could you tell me a little bit about your background and what it is that you can help individuals with?
Dominique::
Well, I mean, Swiss Partners Advisors were set up 15 years ago almost, to help private individuals and families with their asset management needs. As an SEC registered investment advisor, we’re mainly focused on the US so we help private individuals and families in the US with their investment needs. Why do they come to us? They come to us mainly because of geographical diversification or concerns, want to have something outside of the US, they come to us because of asset protection concerns, or just simply to get access to non US markets. I myself have been in that space for almost 30 years lived in the US, worked in the US, and have been taking care of Americans all the way along since the early 90s.
Blake:
So with that, you are based in Switzerland, but you primarily focused on helping US investors. Now there’s a misconception that US investors can’t open a Swiss bank account. Why is that? Well, why is that rumor out there?
Dominique:
Well, it is out there for a couple of reasons. First of all, I mean, the history, when you go back, let’s say 30 years, probably even more than that 70s, 80s, Switzerland at some point originally created the bank secrecy, probably even further back after the Second World War, was all about secrecy. It was about not telling others what John and Jerry have here at their bank account. And that was asset protection at that point in time. That was how banking was done in times where certain people with certain religious backgrounds had a hard time to find banking infrastructure, and to find trustworthy companies that held on to their assets. We have developed from that, and you know how it is when laws changing, you have to go with the flow, and you have to adapt and that’s how Switzerland somehow stumbled into, or stumbled over, this bank secrecy in a way that some people feel, well, this is no longer okay right?
To evade money from taxes? No, it’s not. It’s no longer okay to to hide money. No, it’s not. Is it still okay to diversify? Absolutely, it is. And over the years we have come to what it is today, where you indeed still can have, as an American, accounts wherever you want to have them outside of the US. But there is foreign bank account reporting, F bar reporting, and that is something you have to do to report properly back to the IRS what you have. And then it is still protected from an asset protection point of view, because it’s outside of the US, but you pay properly taxes on it, and that, you had to realize early on for not getting into trouble, hopefully, at the day when you open the account. And then it’s completely legit and all our clients are doing it and the SEC and the IRS and anyone else here in the US have no problem with that.
Blake:
Yes. So you mentioned asset protection a couple of times. Let’s talk a little bit more about asset protection. Myself, I’m an asset protection attorney based in the United States, we service clients worldwide. Primarily, what we do is set up Cook Islands trusts, but there’s other jurisdictions that offer great asset protection. And I know you’ve been in the business just about as long as anybody has. Can you speak to what countries you’re working with? Or what countries you’ve worked with over the course of your career?
Dominique:
Yeah, sure. I mean, we have a lot of things in common, Blake, but we have a couple of differences. I’m not an asset protection attorney. I’m also not an attorney in the US, I will not and cannot give advice on those areas. I’m only an SEC registered investment advisor. So we give investment advice at best. But yes, what have I seen? I normally say it’s really almost like religion. You know, we believe in something and that’s what we do. We see the Cook Islands a lot. We see other destinations in the Caribbeans, be it Cayman Island, be it Nevis, be it even other islands or destinations. It’s at the end, the result, should be the result, of a good and long discussion you have with your trustworthy lawyers, lawyers like Blake Harris, that can help you to understand what the pros and cons are of every jurisdiction and how he ties in with your goals.
Your goals that might be, estate tax, tax optimisation, might be estate tax planning in general, might be asset protection, might be a couple of things and put that all together looking at your family, your passports, and your reach and your footprint in the world. May your lawyer recommend to you certain mixes of jurisdiction, versus other clients that get other mixes of jurisdiction. The beauty of Switzerland and of Swiss partners advisors is, and that is not the case in many jurisdictions, we can deal with every set of jurisdictions that clients come with, whether you have a domestic planning done in South Dakota, or whether you have an offshore trust down in the Cook Islands, we and the banks that we work with in Switzerland, they can handle that, understand that, and deal with this.
Blake:
Thank you for all that, yes, the primary focus in my firm is doing the offshore trust. But occasionally, there are clients who a domestic trust is the right fit for them. And with that, they can still open up a Swiss bank account. Talking a little bit about the advantages of Swiss banking, why would someone choose to work in Switzerland and, I could go on and on after my trip to Zurich a few months ago about the benefits of Swiss banking, but I want to hear from the horse’s mouth, what are the advantages of opening a Swiss bank account?
Dominique:
Well, look, I mean, besides chocolate and watches, there are a couple of other advantages we have.
Blake:
Also cheese too!
Dominique:
Cheese, thank you. Okay, cheese! We in Switzerland, we actually think the best cheese comes from France, but you know, here we go. Fondues in Switzerland, and those you can only get here, raclette as well.
Dominique:
But to your question, I mean, when you look for custodianship, when you look for where to place my funds outside of the US, and once you have taken that decision, then I mean, you should really be concerned about stability. Stability when it comes to the legal system, and forcability when it comes to the legal system, stability when it comes to a currency, stability when it comes to a political system. And, how many countries do you know in this world that has that kind of stability for over 750 years, and we go back to some people say 1291, or even beyond that. It is a lot of years that we provide this stable, boring, political, and legal, and currency infrastructure. And that’s exactly what you want to look for. When you want to place your assets somewhere, where it’s safe and sound.
Then secondly, let’s not forget, besides stability, the banking infrastructure, the knowledge and expertise that we have accumulated over all those years when it comes to private banking, but also asset management, and asset management know-how tools, asset management software, that we can not only do good trades, but also report them properly. Particularly in today’s world of after tax returns, of reporting back, as I said before with F bars to the US, and that infrastructure is something else, that you have a hard time finding elsewhere.
And then last but not least, particularly when it comes to the US market, let’s not forget how many people we have in Switzerland, how many companies we have, how many center of competences we have, in different parts of Switzerland, catering to the Americans. So the know-how and the expertise of civil law, of common law countries actually, the know-how and the expertise of dealing with Americans in all forms or shapes, is big in Switzerland, and is strong in Switzerland, and is to an extent that, again, you have a hard time finding it elsewhere.
Blake:
And on top of that, the clients I’ve sent to Switzerland have all been very happy as well with the level of service. There’s not been a client who I’ve sent to Switzerland. And typically, pretty much every client I’ve sent to Switzerland, they work with an investment advisor out of Switzerland as part of a Cook Islands trust, as part of an asset protection plan. Sometimes, the need for asset protection declines, they’re worried about a particular issue, that issue gets resolved, my clients will continue to work with the Swiss bankers just because it’s such an excellent level of service. And with that excellent level of service.
The fees are very, very comparable, which leads me to my next question. I’m going to throw a three part question at you Dominique. The first part is, generally speaking, ballpark figure, what is the minimum account size that you’re interested in working with? What are your fees, especially as it may compare to American visors? And then the third part of the question is, what investment options do the clients receive? So minimums, fees, and then investment options, boom, boom, boom.
Dominique:
That’s easy. We don’t have a minimum size to open an account, we have a minimum fee, which is 12,000 Swiss Francs. So, when you put that in perspective to our percentage fees that we offer, well, we start with 95 basis point 0.95%, then you’re going to find out that once you’re in the range of 2 million and up, then you’re actually on the good side of the equation, and you should not be affected by the minimum fees below, it gets into the minimum fees. We think that once you depart from seven digit account sizes, it gets difficult or expensive. But beyond that, we actually doing good. We have a lot of clients in the range of, let’s say, 2 to 10 million.
We have a lot of clients beyond that. But in terms of fees, and in terms of size, that is probably a good starting point, 2 million and up. In terms of investment options, it’s really everything as long as we talk about long only. Once you talk about structure products, we talk about leverage products, you’re talking about hedge funds, private equity, venture capital, those are things that get more complex from a regulatory point of view, from an operational point of view. And that’s why most of me and my colleagues here in Switzerland, stay with the long only discretionary asset management mandate. Let’s not forget timezone issues. I mean, here on the East Coast, where you are Blake, things are still easy at six hours. But then all of a sudden, that jumps over to up to nine hours, when you’re on the West Coast.
So in an environment where you’re talking to your banker every single day and discussing with him trades and all that, is not that practical and that’s why we stay away from that and say, it is more really discretionary, where we discuss a mandate and then run it for you. But they are the investment options. So, from pure equity, to pre fixed income, and everything in between, are actually very large. And we put together bespoke mandates for all of our clients. So we find out what they need, and then we’ll do it for them. And within those asset classes, we then have the necessary weightings in the areas where the clients have dark spots in their overall asset allocation.
Blake:
Thank you for all that. Talk to me about cryptocurrency. It’s a part of my practice. We’ve set up asset protection trusts where clients are protecting some cryptocurrency, it was certainly a bigger part of the practice last year when Bitcoin was on a massive bull run, when the whole crypto markets were blowing up. But it’s still a big part of my practice, and I definitely see it as the future. What can you do for clients who are interested in some cryptocurrency exposure?
Dominique:
Being an SEC registered I really have to follow the guidelines of the SEC, the SEC, in my perception, is not there yet, that we have clear guidelines what we can do or cannot do. It makes me believe that what they think crypto is, it is a currency. It makes me also believe that there will be rulings coming out very soon, at least that’s what I hear. But at the moment when it comes to crypto, there’s very little we can do. Because we don’t know yet what exactly is needed in order to help clients on the cryptos.
Blake:
But within that there are some banks that are open to discussing cryptocurrency investments, is that correct?
Dominique:
I’ve heard that as well. Yes. I’m not sure that I would agree with such an approach. But then, you know, everyone has their own legal opinions and their own approach towards that. There are banks and even here in Switzerland, yes, that are open to crypto. I’m not sure that they also open for Americans because of that regulatory gap that we still have, the SEC is in catch up mode on cryptos, but they’re working on it, so I’m confident they’ll come out with better and larger, more detailed guidelines very soon.
Blake:
So how is Switzerland, the Swiss banks, doing right now in an economy that is slowing down? I heard that during COVID, when times were uncertain, lots of money flew into Switzerland. And what are you seeing right now during the slower periods?
Dominique:
Well, look, I mean, difficult markets like right now requires active management. Active management once in a while also has to do with some trades, buy certain stuff or sell certain stuff. So the banks are not doing that bad and they have also not been doing that bad in 2020 and 2021. Just because a lot of people have time to finish their structures, a lot of people at time to put their asset protection and estate planning in order. And that led to a lot of new business and inflow. Certainly here on the US side.
The banks are normally all doing fine. This year is certainly a more difficult year than the last two years. But it’s an OK year. We’re actually pretty happy because they’re still, in Switzerland because of what I said before, with all the focus on the financial service industry, there’s a lot of know-how and also a lot of money that gets invested in that industry. So the way we communicate with banks, the level of automate, automation that they have in that industry, but also how remotely we can work with them being that everything is in the cloud and accessible from all kinds of locations, makes working with the banks very pleasant, and very independent from where you are and what’s going on in your timezone or in your geographical region.
Blake:
Dominic, thank you for all this. This has been great. Somebody who’s interested in opening a Swiss bank account, they can certainly contact my law firm, we can put them in touch with you, but what’s your contact information? How can someone get in contact with you, Dominique?
Dominique:
Well, the easiest way is start with our website, swisspartners-advisors.com, you find a lot of information and a lot of contact information right there. From there, you find emails, you find toll free numbers, you find cell phones, and you get in touch with myself or my great team.
Blake:
And your team is great. It was a pleasure meeting with you and a member of your team. I believe it was last week, when you were coming through Miami. I know that servicing US clients means that you also get to come and visit America frequently, which we appreciate. I’ll definitely be out to see you again in Zurich, but not until the weather gets warmer. Until then I’m going to be staying here close to the warm weather in Florida. Well, Dominique, this has been a pleasure. Thank you so much for coming on the show, and you have a great rest of your day!
Dominique:
Thanks, Blake, for having me. Hope I’ll be back soon. Thank you all!
