Beyond Geographies and Generations

The concept of global wealth management has gained momentum over the past few years presenting unique challenges, in terms of not only preserving wealth, but also successfully enabling the next generation to look after the family’s wealth and determine its new purpose, MARANA BRAND discovers.

Sarette van den Heever and Wayne Sorour, both wealth directors at Private Clients by Old Mutual Wealth.

CRAFTING AND MANAGING a well-structured portfolio of investments in one geography, for one family can be challenging. In today’s ever-shrinking world, where families are scattered across the globe and uncertainty reigns supreme, these challenges become even more significant. While previous generations might have initially focused on accumulating assets and building wealth predominantly within South Africa, the next generation is being compelled to plan and manage their affairs globally from the outset, says Sarette van den Heever, wealth director at Private Clients by Old Mutual Wealth.

“For most South African families, it has now become the norm to have multiple family members living, earning, accumulating assets, and paying tax in at least one other country. Where you choose to live, no longer determines where you earn income and where you build assets – these can all be in different and multiple countries. Our clients with young families are considering the reality of their children studying abroad and most probably settling there permanently. In that case, they are actively exploring options to live abroad themselves, if only for part of the year, and to have assets and funds available in the local currency,” she says.

But this brings with it a host of complexities. Once investments are made offshore,
navigating the different laws and regulations across different countries and currencies can become a minefield. This complexity also extends to owning property, setting up trusts and managing tax and estate duties. There’s no doubt that effectively managing assets across various jurisdictions demands a comprehensive understanding of the respective financial, legal and structural considerations – expertise that is offered by Private Clients by Old Mutual Wealth.

“Before making any significant decisions, such as investing, acquiring alternative citizenship, emigrating or taking any unconventional steps outside South Africa, it’s essential to seek expert advice timeously to understand the implications, avoid potential pitfalls and ensure a successful outcome,” says Wayne Sorour, wealth director at Private Clients by Old Mutual Wealth and an expert in the legal and global
investment industry.

“Many people try to cut corners to avoid investing in professional advice to understand
the implications, which often leads to costly consequences,” he says. These days many investors’ children live, work and study abroad, often in different countries. Others work overseas for 10, 20 years, earn money in that country and then come back.

“In such a situation, questions about the efficiency of your investments and the future of your wealth become crucial. Are you getting the best returns on your investments, and should the assets be held in a more tax-efficient legal structure? Most of these structures should be put in place before one leaves and/or returns to South Africa. If you have created a business, will it continue to thrive after you are gone and will your loved ones be properly cared for?

“Therefore, effective planning and revisiting your investment portfolio and structures several months ahead of your departure or return can save you a lot of tax, both here and in the country where you have worked. I often see how clients assume laws and regulations regarding tax, property, investments and estates work the same across the world. This can lead to immediate or future losses of millions or prevent their loved ones from accessing money or assets after they have passed on,” Wayne says.

Apart from advising clients about the best offshore investments and structures that would make the most sense for their specific circumstances and needs, Private Clients by Old Mutual Wealth also assists with cross-border tax and fiduciary services, advising individuals with business interests and investments in multiple countries. Complementing its highly experienced in‑house family office, investment management and fiduciary services teams, the business has also established strong relationships with lawyers, tax consultants and other specialist experts outside South Africa.

“If a client has a particular need in, say, the USA where they want to emigrate to, I know who to call. We make sure that the client gets the right advice so when they settle in the USA, they’re not going to get any surprises from the tax authorities,” Wayne explains.

Planning for the future also involves considering how your estate will devolve to your children and loved ones and, where applicable, how your business will be managed into your retirement and after your death, says Sarette. This calls for careful and effective succession planning.

This may sound like too many different experts are needed to successfully manage your wealth and everything that goes with it, including what happens to it once you’re gone. Dealing with multiple financial advisers could potentially pose a risk because there isn’t one cohesive picture and structure.

“Indeed,” says Sarette, “that’s why we have a ‘family office’ that is responsible for overseeing the entire family, not just the individuals who have been generating the wealth. This includes managing various structures such as trusts and companies, whether they are operating businesses or other entities created to manage wealth. The family office also assists all family members within this structure, including children
and grandchildren,” she explains.
“The real benefit of having this type of structure is having one office that manages all your affairs and understands how everything is interconnected, including the links between different family members, risks and opportunities.

On a practical level, it is invaluable to have one point of contact to sort out anything from complex global tax structures to simple tasks like making payments or arranging insurance assessments,” she says.

“The family office in Private Clients by Old Mutual Wealth was established in 1925 and it has looked after some of the families for four generations. With this comes significant learnings and established professional relation- ships across the globe, all managed from South Africa. In addition to our skilled in-house team, we work closely with families’ existing advisers, accountants, lawyers and investment managers and we call on a wide network of well‑established professional firms to assist us in the management of our clients’ affairs,” Sarette says. V

Contact Private Clients by Old Mutual Wealth at
privateclients@omwealth.co.za or +27 (0)21 524 4678
or visit wealthprivateclients.co.za.

Private Clients by Old Mutual Wealth offers holistic, bespoke solutions for
high‑net‑worth clients. We partner with you and various specialists, tapping
into the required resources to provide an integrated plan for your holistic
financial affairs, including investments, wealth structuring and transfer strategies,
proactive tax planning, and portfolio lifestyle and administration. Our level of
individual attention and interaction is a defining standard in the personal service
we provide. We boast a strong track record in wealth and investment management.
As part of a brand that has been growing wealth for South Africans for nearly two centuries, we believe that there is no substitute for experience that comes with managing wealth through various economic and market cycles. Our team, therefore, has several decades of success and experience in successfully working with individuals, families, trusts and entrepreneurs in managing their wealth.