DECEMBER 2011

BY HELEN BURGGRAF

As the UK life insurance industry heads into the final weeks of 2011, it is clear it will not end up being quite the bumper year for offshore bond sales to onshore clients that some had forecast.

In February, offshore life industry executives told International Adviser that favourable market condi-tions for offshore bonds had caused them to set sales targets for their teams as much as 20% ahead of last year’s figures.

But with the first three quarters of business now in, onshore sales of both

BY SIMON DANAHER

Kames Capital, formerly Aegon Asset Management UK, will launch into the Asia market and has opened its first office in the region, in Hong Kong.

The office will be over-seen by James Cooper, who joins from financial consul-tancy firm Liminal Image, as head of business devel-opment, Asia. Reporting to Kames’ head of distribu-tion, Martin Harris, he will be responsible for develop-ing the business across the Asian market.

Commenting on the expansion plans, Harris indicated that Kames intends to expand quickly in the region.

He said: “In the medium term we want to have some of our investment people based in Asia, this will help our management of both insurance company assets and third party assets.

“We hope to be able to offer Asian funds to Asian investors, managed and run by Kames Capital in Asia.”

Andrew Fleming, who heads Kames, also said that this year’s rebrand was an important step in the business “becoming a major force in investment management”.

Providing health insurance for expatriate employees in Shanghai and elsewhere in China has long been more challenging than in most other major countries.

Reasons include the country’s lack of a private healthcare network com-parable to what expat Brits and Americans are accus-tomed to back home.

Indeed, top qual-ity private care at the best Chinese hospitals can be as expensive as it is in the US,

UK offshore bond sales miss ambitious targets

Health insurers looking towards China

NEWSPlatform One attracts offshore IFA interest 5

Singapore-based Scots form business network 5

Online recruitment agency ready for full rollout 5

Gorst elected chief minister for Jersey 7

HMRC demands ‘proof’ of Liechtenstein links 7

Singapore advisers start using CKAs 7

Prudential global drive prompts Asia rebrand 8

Offshore property targeted by HMRC 8

Barclays Wealth looks to double China assets 10

Aviva expands into Benelux region 13

Morningstar replaces qualitative ratings 14

Coutts fined for selling AIG product to HNWIs 17

BoAML launches Dim Sum Index in HK 17

Miller steps down as Legg Mason CIO 18

Pimco fund taps into ‘best credit ideas’ 18

Manulife set to enter Cambodian market 21

Lang takes over as chairman of AILO 21

World’s wealthy show little trust in families 56

For Distributors of International Fund, Life and Banking Products www.international-adviser.com

Features – page 4

single premium and regular premium offshore bonds are running largely flat compared with last year’s results, which in turn were

the world’s most expensive healthcare market, insur-ance experts say.

“A room in a top Chinese hospital can vary anywhere from $600 to $1,000 a night, and that is before the doctor has even poked his head round the door,” said James Cooper, sales manager at insurer William Russell, which is looking after expat clients from its UK base, as it mulls its options in the mainland.

Within the past year, though, a number of pri-vate health insurance giants such as Aetna and Bupa, along with smaller firms, have begun estab-lishing a mainland pres-ence to target the Chinese market, which is under-stood to include an esti-mated 600,000 expatriates.

Normally they do this via an alliance with an established Chinese insur-er, which gives them an

Continued on page 7

Kames Capital prepares for Asia expansion

Singapore The city state has become a hub for Asia’s noveau riche and is boosting its appealto the region’s entrepreneurs

Country profile 30-31

38% ahead of 2009’s. Total new business sales

of UK-distributed offshore bonds in the first

Continued on page 5

Ian Phillips The Investors Trust Assurance vice-president on the company’s ambitious emerging market plans

MD profile 27-28Signia WealthFresh thinking has helped attract a steady number of HNW clients to the company in a short space of time

Intermediary profile 33-34

UK sales of single premium offshore bonds

0

2

4£bn

6

8

’11’10’09’08Source: ABI

Q4Q3Q2Q1

4 INTERNATIONAL ADVISER [www.international-adviser.com] DECEMBER 2011

PROFILESANALYSIS

Asian advisorymarket 24-25The independent financial adviser industry in Asia is young compared with more developed financial services markets such as the UK. In Singapore, for example, legislation providing for the creation of such entities was only introduced in 2001. A study by NMG Insights, which was based on interviews with some 120 IFAs, premium banks, private banks and private bank brokers, shows how the sector is progressing, and reveals that advisers are strongest in the HNWI sector. The research also indicates that local investment product providers are beginning to attract business away from previously-dominant offshore life insurance players. Helen Burggraf analyses the findings

contents

IA Intermediary PanelGraham BarnesDirector, international division, The Fry Group, UK

Tony ShahAssociate director, Christchurch Investment Mgt, UK

David BellinghamCEO, Professional Investment Advisory Services, Singapore

Gary BoalManaging director,Boal & Co, Isle of Man

Peter SayersDirector, financial planning, Horizon Financial Services, Jersey

Tim SearleChairman, Globaleye, Dubai

IA Tax Panel

Brendan HarperTechnical services manager, FPI

Neil ChadwickTechnical manager, Royal London 360º

Margaret JagoInternational technical manager, Aegon Ireland

Rachael GriffinHead of product law and financial planning, Skandia International

Gerry Brown Head of trusts and taxation, Prudential

Mark GreenHead of estate and tax planning, Legal & General International

Brian MurphySenior financial planning manager, Axa Sun Life

Julie HutchisonHead of international technical insight,Standard Life Int’l

Paul Kennedy Business development director, FundsNetwork

Ernest ChanChief commercial officer, Convoy Financial Services, Hong Kong

Sam Instone Director, AES International, UK

TECHNICAL

Briefing: International Private Medical Insurance 36-37The IPMI market has flourished, despite the global economic downturn. Tim Mutton at Now Health International explains the factors advisers should take into account when choosing a policy

Robert ParkerChief executive, Holborn Assets, Dubai

Sean KelleherChairman, Financial Partners Group, Dubai

MD profile:Ian Phillips 27-28Ian Phillips, the vice-president of Cayman Islands-based insurer Investors Trust Assurance, discusses his strategy for servicing clients in emerging markets. The company plans to target high net worth individuals in Malaysia, he explains, and will concentrate on expanding its distribution, developing new products and enhancing its technology-based solutions

Mahmoud NodjoumiChairman and chief exec, Nexus Group, Dubai

Mike Coady Director, deVere Group, Western Europe

PORTFOLIO

Fund selector: Asia ex Japan equity 39-41It has been a difficult year for investors in Asian equities, as inflation concerns weighed on markets. Against this backdrop, OBSR’s Diego Higuera looks at the top-performing Asia ex Japan funds

CLASSIFIEDS

Recruitment 53-55Find the job that suits you in IFA firms operating around the globe

Mark RawsonBusiness director, The Henley Group, Hong Kong

Paul StanfieldChief executive, FEIFA

Sandra Hogg Senior tax manager, Scottish Widows

Rex CowleyPrincipal, Newdawn Consultancy & Research, Jersey

Bill BlevinsManaging director, Blevins Franks, pan-Europe

Sarah LordWealth planning director, Killik & Co, Middle East & Asia

Rainbow PanCEO, ipac, Hong Kong

Chris AllattSenior tax consultant,Sanlam UK

Anthony RothwellTechnical consultant,Canada Life International

Country profile:Singapore 30-31With one of the fastest-growing high net worth populations in the world, according to a report by Merrill Lynch/Capgemini, Singapore is an attractive market for financial advisers. Non-resident Indians, Chinese and Indonesians are among the groups of wealthy individuals that IFAs are seeking to attract

Intermediary profile:Signia Wealth 33-34Nathalie Dauriac-Stoebe describes how the company she founded only 18 months ago has built up assets under management of more than £2bn in that time, with an approach which instils confidence in its clients, despite its relatively short track record

Life listings 50-51

Service listings 52

The IA Quality Funds43-48

A list of the blue chips of the offshore fund world

Banking deposits 49The top-paying offshore accounts

STATISTICS

AMBEST

B++ Good

Financial Strength Rating

»»»»»»»

27DECEMBER 2011 [www.international-adviser.com] INTERNATIONAL ADVISER

profilesMD PROFILE IAN PHILLIPS

What is the history of Inves-tors Trust?Investors Trust Assurance, a registered Cayman Islands insurer, commenced opera-tions in 2002. Prior to founding the company, the principals distributed unit-linked policies, life insur-ance and health insurance throughout Latin America, as agents of several large insurance firms. At the start of the ’00s, they identified the need for a company where product develop-ment, premier customer service and technology-based solutions were a focal point. After more than a year researching the best jurisdiction and structure, Investors Trust was born.

What products does the company provide?Investors Trust’s core product portfo-lio is comprised of unit-linked insurance policies, character-ised by a single pre-mium payment or regular contributions over many years. Furthermore, it offers a fixed annuity product with different maturities, and capital protected index notes linked to the S&P 500 Index.

The company specialis-es in emerging markets in Asia Pacific and Latin America, and has announ-ced plans to target other markets in Asia and the Middle East.

Which countries are attrac-tive in those regions?The company recently obtained a licence to con-duct business from Labuan, Malaysia, with the idea of targeting high net worth individuals in Malaysia and other countries in the

Investors Trust Assurance was founded on an intricate understanding of the opportunities and potential offered by emerging markets. Vice-president Ian Phillips explains how the company plans to expand its distribution and enhance its service

How do you intend to achieve your aims?Regarding distribution, as I mentioned before, we are increasing distribution in new markets and, at the same time, expanding our network in our existing markets. Emerging markets will continue to be the driving force for us, espe-cially in the next five years. Our offices in Hong Kong, Kuala Lumpur and Monte-video will be essential to accomplish this goal.

In regard to new prod-ucts, in 2010 we introduced a successful fixed annuity to complement our unit-linked offering, and we are currently launching a much improved unit-linked prod-uct that is more cost-effi-cient and easier to under-stand for distributors and clients. For 2012, develop-ing a portfolio bond is at the top of our list. Overall, it is extremely important to listen to the market, to our distributors, and proactive-ly develop products that fit their needs.

On the same note, tech-nology-based solutions are becoming a must. We were pioneers creating some of these solutions, like the electronic business submis-sion and the e-app – a web-based paperless plat-form where our distribu-tors can easily open new business for clients. The company has, at any point in time, between 60 and 80 internal projects of differ-ing complexity, aimed at

region. Also, we are pros-pecting in India and Dubai. We believe emerging mar-kets are the place to be and we happen to under-stand them very well, since those markets were the foundation of the compa-ny. There is a vast emerg-ing middle class in these countries, which for the first time has the possibility to satisfy certain needs, such as providing for their children’s education or their own retirement. We are in a position to help them reach their goals.

Are there other regions in which you would like to expand distribution?We are exploring some opportunities in Africa, a continent we think has not been serviced appropriately by our industry – we want to change that.

What are your objec-tives for Investors Trust over the next five years?We are concentrat-ing on three key areas: expanding

distribution, develop-ing new products and

enhancing our technol-ogy-based solutions.

We live in a dynamic world, where in order to

be successful you need to keep your mind open and be proactive. We pride ourselves on being at the leading edge of the industry.

Embracing new territories

We are exploring some opportunities in Africa, a continent we think has not been serviced appropriately by our industry – we want to change that”

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28

MD PROFILE IAN PHILLIPS

INTERNATIONAL ADVISER [www.international-adviser.com] DECEMBER 2011

Ian Phillips is the president of Investors Trust Assurance Global Trust Company and ITA Global Securities, and vice-president of ITA SPC, all of which are regulated in the Cayman Islands. He spent ten years with National Westminster Financial Services (now part of Coutts) as a trust officer and investment adviser, before moving to the Caymans in 1994. In addition to his role at ITA, he serves on the council of the Society of Trust and Estate Practitioners in Cayman.

BIOGRAPHYimproving our platform. On average we implement between 15 and 20 projects per month.

What are the biggest chal-lenges the company faces?Based on the past three years, I would say market turbulence and the global regulatory environment. Volatility in the financial markets generates uncer-tainty in our clients, who see the value of their accounts diminished and sometimes postpone finan-cial decisions waiting for a ‘better time’. Unfortunately nobody knows when better times are coming and this situation affects our sales, persistency and overall company growth. Our clientele has been very resilient during 2011, but we would like to see a less volatile market.

After the 2008 global economic crisis, an increas-ed regulatory environment has been the common denominator around the world. We believe in dia-logue between the regula-tors and our industry, and this is one of the main rea-sons why we joined AILO [the Association of Inter-national Life Offices] this year. AILO is the perfect conduit to reach out to regulators and we are looking forward to becom-ing meaningful contribu-tors to the association.

What do you hope to achieve through your membership of AILO?To belong to a forum where the company is able to dis-cuss the challenges of the marketplace, and to build consensus with our com-petitors regarding important matters. We had a great experience during the latest members’ meeting in October. It was important for us to hear that other

companies from our indus-try were having the same challenges we are experi-encing. We look forward to participating in some of the association’s committees to further discuss these chal-lenges, share our opinions, and ultimately find solu-tions for all of us.

How will the company differ-entiate itself from its competitors?The same way we have done it so far: better cus-tomer service, cost-efficient products and a leading technology-based plat-form. Over the past ten years, we introduced sev-eral features that were later followed by our competi-tors, such as multi-lan-guage client web access, service points in all regions and the electronic applica-tion platform. We need to continue on this path.

In what ways do you expect the international life industry to change over the next five years?Following the financial crisis, the global insurance industry is changing and this, together with the evolving emerging markets – in particular China and India – brings new chal-lenges and opportunities. As debt and deficits spiral out of control, govern-ments continue to look at how to increase their tax revenues and limit avoid-ance. Insurance will no doubt be scrutinised, as a significant amount of capi-tal has been located off-

shore in recent years.The financial crisis and

increased taxation will lead to additional interest in the life insurance industry, as people find ways to pro-tect their wealth from the higher tax burdens. Already the EU Savings Tax Directive has been amend-ed so as to include insur-ance products. India and China continue to develop their insurance industries, and these are regions where one could expect to see growth in the coming five years.

What are your likes and dis-likes about the cross-border life sector?When it comes to life insurance and investments, individuals can have a multitude of concerns about products in their own country – the fear of currency devaluation, government instability, inflation or confidentiality and taxation. This is not an exhaustive list but gives a number of reasons why the cross-border life sector brings a value proposition to many clients.

Given that the sector is growing at this time, new companies are entering the market and the ability to enter the market through some less-regulated juris-dictions is a dislike. It is important that financial advisers and clients are mindful of the jurisdiction from where the insurer is based, as well as its market capitalisation. Markets such as the Cayman Islands,

Unfortunately nobody knows when better times are coming and this situation affects our sales, persistency and overall company growth. Our clientele has been very resilient during 2011, but we would like to see a less volatile market”

“

Bermuda, Ireland and Luxembourg are well devel-oped, but other financial jurisdictions may not have the controls in place to pro-vide the oversight clients should be receiving.

What is your business background?I have spent almost 30 years in the financial serv-ices industry, with the past 18 of these being located in the Cayman Islands. My focus is providing struc-tured solutions for clients, taking into account estate planning, asset manage-ment, protection and tax efficient structures.

Who are your business heroes?They have tended to be some of the clients I have worked with throughout my career, so I cannot dis-close their names. There was one in particular in London before I left for the Cayman Islands that I admired greatly, and that I learned a significant amount from in relation to customer services and rela-tionship management.

What is the hardest business lesson you have learned?The harder you work does not mean the more you succeed – you end up taking on more and more, and your overall results drop. The more effi-ciently and effectively you work, the more successful you will be.

What is the best piece of business advice you could offer someone?It is more important to listen to what the client wants and find a solution to fit his needs, than to ‘sell’ the client something they may not want; even if you believe it is the best solution for them.

50

INTERNATIONAL LIFE & BANKING LISTINGS

INTERNATIONAL ADVISER [www.international-adviser.com] DECEMBER 2011

Professional servicesHere are some of the biggest players in the offshore professional services arena with a description of their services and their contact details. If you are interested in being included, please contact Ben Wiseman on +44 (0)20 7065 7573 or email: ben.wiseman@lastwordmedia.com

Company name: IOMA GroupAddress: IOMA House, Hope Street, Douglas, Isle of Man, IM1 1APTel: +44 (0) 1624 681200Fax: +44 (0) 1624 681390Email: info@iomagroup.co.im Website: www.iomagroup.co.im IOMA Life is part of IOMA Group, which offers a complete wealth and risk management service from its base in the Isle of Man, one of the world’s best regulated and most successful financial centres. We administer or manage over $8 billion of funds for global clients, and have a proven track record in innovative solutions that deliver good results and mitigate risk.

The IOMA Group is small enough to offer a highly personal service, but sufficiently large to provide in-depth, specialist expertise. The business is comprised of eight divisions. Each is a specialist in its own area, but all share the same desire to grow our business by delivering effective results. Some clients only use one service, others mix and match between businesses to suit their needs at the time. The divisions are: Solutions, Life, Investment Management, Fund Management, Pensions, Fiduciary, Captives and Insurance.Product offeringsIOMA Life offers a wide range of inheritance tax mitigation and estate planning products. It provides traditional single premium UK products via an offshore portfolio bond and a wide range of specialist unit linked life products. IOMA Life is also a sought after provider of offshore bonds for investment platforms.

Company name: Investors Trust Assurance SPCAddress: Suite 4210, 2nd Floor, Canella Court, Camana Bay, PO Box 32203, Grand Cayman, KY1-1208, Cayman IslandsTel: +1 (305)603-1400Fax: +1 (786)363-1822Email: advisers@investors-trust.comWebsite: www.investors-trust.comInvestors Trust Assurance SPC (“ITA”) is an international insurance company licensed and regulated by the Cayman Islands Monetary Authority. ITA has gained a leadership position in the international insurance markets by specializing in the provision of investment–linked insurance products and class leading customer service. With service offices established to support policyholders around the world, ITA seeks to provide opportunity to its policyholders through access to the global financial markets. ITA is constantly innovating, and investing in technology to allow clients online multi-language (English, Spanish, Portuguese, Chinese and Japanese) access to manage their investment-linked products.Product offeringsITA works with some of the world’s top asset managers under its convenient open architecture platform. It provides clients with greater investment choices and the ability to plan for a happy and comfortable retirement and to provide for their children. Specialising in medium to long term investment-linked products tailored to meet the needs of investors around the world, ITA offers a range of flexible, tax-efficient products including regular and single premium annuities, designed to suit various income levels and financial planning needs.

Company name: La Mondiale Europartner Sa

Address: Atrium Business Park, 23A, rue du puits romain, ZA Bourmicht L- 8070 Bertrange, Luxembourg

Tel: +352 45 858744 • 0808 234 6607 (client services in UK)

Fax: + 352 45 8718

Email: advisers@lamondiale.lu

Website: www.ag2rlamondiale.lu

La Mondiale Europartner is based in Luxembourg and has gained experience in wealth management solutions over many years. They now operate in several EU countries including France, Luxembourg, Italy, Portugal, Spain, Belgium and the UK.

Their focus is aimed at the cross-border aspects of wealth management, enabling them to produce unit-linked, multi-currency, multi-manager, multi-lingual – investment and expatriate pension solutions.

Product offeringsBond 4 European Mobility is for UK-based independent financial advisers providing a cross-border-compliant, tax-efficient, multi-currency wrapper with open architecture. Investment is allowed via collective investment schemes chosen by the client/IFA or may be managed by a discretionary manager.

The bond allows access to the La Mondiale’s main fund, which provides guaranteed returns in £, and $. Locally compliant investment solutions are also available to IFA’s advising UK expatriate clients residing in Spain and France.

Company name: Aegon Ireland plc

Address: 2nd Floor, IFSC House, Custom House Quay, Dublin 1, Ireland

Tel: +353 (0)845 600 0173

Fax: +353 (1)673 8940

Email: client.relations@aegon.ie

Website: www.aegonsei.ie

Aegon (a brand name of Aegon Ireland plc) provides attractive investment solutions, particularly to UK investors. With a heritage in the offshore market dating back to 1995, Aegon is a leading provider in its chosen market.

We are part of the Aegon Group, which is one of the world’s largest listed insurance companies with assets under administration of around £348bn.

Based in Dublin, one of the world’s most dynamic financial centres, we also benefit from an enviable infrastructure. The client service team in Dublin draws on the talents of a large, young, motivated and highly skilled workforce.

Our service ensures that quality assurance is embedded in all we do to meet the requirements of our customers.

Product offeringsA portfolio bond, a packaged inheritance tax plan (a discounted gift trust plan), a regular savings plan and a guaranteed income plan.

Company name: Irish Life International Limited

Address: Bloodstone Building, Sir John Rogerson’s Quay, Dublin 2, Ireland

Tel: +353 (1) 487 0700 • Fax: +353 (1) 487 0704

Email: sales@seb.ie

Website: www.irishlifeinternational.com

Irish Life International, a life insurance company incorporated and regulated in Ireland, was established in 1994. In September 2011, Irish Life International was acquired by SEB Trygg Liv Holding, which is part of the SEB Group, one of the largest banking and life assurance groups in northern Europe. SEB Group has been providing financial services to its clients since 1856.

Product offeringsIrish Life International engages in the cross-border distribution of insurance-based investment products under the EU Third Life Directive on a freedom-of-services basis.

It provides a range of unit-linked whole-of-life insurance products that offer an extensive choice of investment options and funds. It offers a wide range of territory-tailored products for residents of UK, Isle of Man, Channel Islands, Spain, Italy, the Netherlands, Belgium, France, Finland and Cyprus.

Its portfolio products are open architecture offering a very broad external asset choice as well as our range of approximately 100 internal unit-linked funds.

Irish Life International is regulated by the Central Bank of Ireland.

LIFE LISTINGS