10 Feb Capture the value of cross-border tax-efficient investment
In today’s connected world, Swiss wealth managers face the challenge of handling international taxes and meet the changing needs of their global clients. Ultra-high-net-worth (UHNWI) and high-net-worth (HNWI) individuals are pursuing not just secure investment options but also require enhanced tax efficiency and tailored wealth management services.
This demand presents a unique opportunity for Swiss wealth managers to differentiate themselves and deliver enhanced value. “The idea is to work in a fiscally transparent world with adapted and efficient tools” says Romain Faraut, swiss market director at Croesus.
The technology solution needed is far simpler than it seems. “The goal is not to give tax advice, but to identify products that would have a negative tax impact based on the client’s tax residence,” adds Nabil Hatimy, director and head of client delivery and partnerships at Indigita.
The two WealthTech experts will also be presenting an English webinar on the same topic on March 26, 2025. Click here to register.
The cost of tax inefficiencies
“From the client’s perspective, there are two factors that diminish their wealth: bank charges and taxes,” said Faraut. He emphasised the significant impact of tax inefficiencies, estimating that between 1 and 3 billion Swiss francs are overpaid each year by clients because their tax situation is not integrated into portfolio management decisions.
Traditional portfolio management models, which often rely on generic approaches regardless of a client’s tax domicile, are no longer sufficient in today’s tax-transparent environment. Failing to address individual tax circumstances can lead to:
- Suboptimal returns: Unnecessary tax burdens can significantly erode client wealth.
- Strained client relationships: Clients may feel underserved if their tax situation is not adequately considered.
- Reputational damage: Financial institutions risk losing credibility if they fail to provide tax-efficient solutions.
FinTech as a solution
Croesus, in partnership with Indigita, offers a powerful solution to this challenge. By leveraging Indigita’s comprehensive tax data and API, Croesus enables wealth managers to:
- Identify tax-inefficient investments: The solution analyses portfolios and flags potential tax liabilities based on the client’s tax residency.
- Develop tailored strategies: Wealth professionals can create personalised investment strategies that minimise tax burdens while adhering to client risk profiles and investment objectives.
- Automate portfolio adjustments: The solution automatically adjusts client portfolios for tax efficiency, considering factors like share classes, withholding taxes, and regional tax variations.
Empowering wealth managers, enhancing client value
Beyond its powerful tax-efficient features, the platform streamlines many other aspects of portfolio management. It empowers banks to:
- Boost efficiency: Automate time-consuming tasks such as portfolio rebalancing, compliance monitoring, and reporting. This frees up bankers and portfolio managers to focus on client relationships and strategic investment decision-making.
- Enhance collaboration: Improve teamwork and communication through centralised data and shared workflows. This fosters a collaborative environment where financial professionals can seamlessly work together to serve clients.
- Gain deeper insights: Access powerful reporting tools to gain a comprehensive understanding of portfolio performance, risk exposures, and tax implications.
- Cost control: Reduce operational costs associated with manual processes and legacy systems. Croesus’ cloud-based platform offers a cost-effective solution that scales with business needs.
Embrace the future of international wealth management
By embracing these technological advancements, Swiss wealth managers can not only optimise client portfolios and enhance service offerings but also reinforce their position as leaders in the global wealth management landscape.
“Technology allows us to ensure clients optimised management of their assets on a tax level” concludes Faraut.