Joseph Kellogg, wealth planning executive at WE Family Offices, talks about how and why the firm is seeing heightened demand from clients for multi-jurisdictional wealth planning.

Today, the networks of wealthy families often cross borders, with family members in different countries and with assets spread around the world. This “cross-shore” landscape puts unique challenges on the family’s wealth planning as each jurisdiction has its own distinct set of rules for ownership, compliance, accounting, succession and tax planning.

In order for a family to be confident that their wealth strategy is sound, and to avoid unintended long-term consequences, they should ideally be working with an advisor with the capability – both internally and through its global network of wealth service providers – to provide guidance across geographical borders. This can, unfortunately, be a time-intensive and expensive endeavor to manage. We have found an important service for our client families is to facilitate the coordination of cross-shore advisors.

Because families are becoming more and more global, advisors are now working to strengthen their ability to serve those cross-border clients by supplementing their own in-house capabilities and by working with professionals and firms abroad to ensure the needs of their clients will be met. 

Most of our client families are global and in our work with them we come across a range of cross-border planning needs. Families should always continue to work with their respective legal and tax advisors, but also ensure that their goals are communicated across advisors.

Some of the specific situations we assist our global clients with include:

• Facilitating wealth transfer documents that will be effective in whatever country the assets are located and where the family members reside;
• Assisting with the creation of governance and shareholder agreements for multi-jurisdictional family businesses;
• Making timely, opportunistic investments that are aligned with their structures and jurisdictions;
• Helping the family to understand all implications of their investments and wealth structures in each of the countries of residence and execution; and
• Planning strategies that are sensitive to geo-political changes/unrest in their country of residence.

Individuals looking for a “cross-shore advisor” should pay attention to the advisor’s experience and depth of resources with regard to the relevant jurisdictions.  And – of course – the family should thoroughly understand how the advisor is compensated.  It is usually helpful to ask for an estimate on fees even if it is non-binding, and it is critical to be absolutely sure the advisor is paid only by the client and not with any fees/commissions from any other external service provider.

In one case, when we first began to work with a new client, they were one year into the re-design of their international holding structure for their cross-shore family wealth, including a substantially sized operating family business.   The family had assets and business operations in several jurisdictions and children and grandchildren in three different countries. They were so frustrated with the legal fees and complexity that they were ready to abandon the whole project.  We were able to step into the integration and coordination function between the cross-border advisors, represent the family's agenda, and facilitate communications.  The clients are now more confident about the project and are receiving regular progress reports.

For advisors seeking to work with global families, there are obvious challenges. But establishing the processes, resources and talent to serve cross-border families provides advantages for clients by broadening the spectrum of services and deepening client/advisor relationships. While this undoubtedly will enhance the client experience and satisfaction, it can be a complicated endeavor from a compliance perspective. In addition, it can be costly to hire the appropriate staff. There is no doubt that while serving cross-border families could add a layer of complexity to an advisor’s practice, it is also true that the enhanced service provided to clients will serve dividends into the future.