Mike Curran, director of the PricewaterhouseCoopers LLP (London), took part at a seminar “Brexit: an overview of the impact for investors” in Andorra, offered by Morabanc. He shared with all-andorra.com his point of view on private banking perspectives and gave advice how to manage clients successfully:
“I’ve been doing this type of events in Andorra for 3-4 years. Their aim is to educate people, bringing them up to date with the tax and political environment in the UK. As a number of people here are expats for a long period of time, I just try to give them an up to date knowledge, which helps them to make sure that they are doing things correctly, especially in the conditions of changing economy in the UK, where we currently have a great focus on some of the changes related to transparency and new rules worldwide. I find sometimes people are behind on what’s happening and this type of knowledge is especially important if they have investments or other links still connecting them to the UK.
We haven’t got any business relationships with Morabanc, we are only working partners.
I deal with an international client base in London, and there is still need for private client banks because there is a big difference between general banking facility and bank which provides other support services like educating their clients, making sure they are aware of changes in the new territories they may want to go in to, ensuring that their clients are protected in some way. They can’t give them advise on tax that would be one stage too far, some banks in the UK have actually tried it and it hasn’t worked, so the main aim is really giving guidelines and assistance.
It is difficult to say which banking products are more attractive now in the current environment. There are multiple products – insurance or tax products which are able to deal with different territories. Therefore the challenges depend on where your clients come from, for example, European clients use more insurance products. I think for Andorra there is still need for the private bank, their clients still need someone to guide them, to work within the community with their other advisors and through that help them to get the right results.
The challenge here is that Andorra is one of a number of different territories which is having to reinvent themselves making sure they stay ahead in this changing world. It is no longer just being a low tax regime that will make you successful, now they have to have something that will attract new residents who will then invest. I think that Andorra should look at who they are competing with, there are other territories, like Jersey for example, which are out there selling themselves as a location to either do business or use their facilities. Therefore I believe it is not so much about looking for one area of the economy but more about making Andorra much more visible among the population which is much more movable.
If you look at Swiss banks who do better all-round service, you will see that what’s important is recognising, as the clients become more international, that the banks need to know how to help their clients in other territories. Not everyone has got a footprint everywhere, but it is about knowing where your clients go in and how to assist them with that. So, a successful bank should be a good trusted advisor and supporter of their clients. It’s not just about providing banking facilities anymore. Its events like this, connections to the right advisors who can make sure your clients don’t make mistakes. And I think we have seen that much better with some of the Swiss banks, even more than with the UK banks who have actually been very successful with managing private clients.
Small business is not private banking and it is an area from which it is hard to make money for banks. It can be profitable but it’s a betting game. But if you look at the UK again which is an example of a developing banking system, we have now got new disruptor banks coming in, who are providing more facilities to that early stage business entrepreneurs than any of the bigger banks. Mainly because the bigger banks found it more costly to provide those services to entrepreneurs on an early stage. I think Andorra will have those same issues how do you make money from credit facilities with what would be sometimes seen as high-risk opportunities. However, it is a difficult area because it is hard to judge whether a new business will be successful or not.
The main advice for Andorra would be to keep your friends close and enemies closer still. You need to know what others are doing, what is going on out there, your competition, what direction is everyone taking. And it is not about seeing Andorra as the answer but about knowing what works and doesn’t within the international community, which is changing all the time, is more movable and their footprints are getting greater and greater all the time”.