Globacor Articles

Barbados Financial Services Review 2002

BAYSHORE KEY UNLOCKS WEALTH POTENTIAL

Bayshore Bank & Trust is distinguishing itself from the pack through its combination of solid trust offering with investment advice from some of the world’s best asset managers.

Today’s sophisticated investor demands financial solutions that are unlimited by borders, utilise the latest technology and above all are supported by professional advisors that understand the relevant tax, legal and asset management issues.

Through its Barbados headquarters, Bayshore Bank & Trust (Barbados) Corporation, ('Bayshore') offers a variety of financial services specifically designed for high-net-worth individuals and corporations. What makes it unique in a crowded marketplace is an ability to bring an international trust planning, corporate services and insurance solutions to clients in tandem with some or the world’s leading institutional asset managers.

Bayshore provides a ‘true turnkey' wealth management relationship, essentially meaning it can offer the whole gamut of services from private banking facilities to trustee and company services, via vaulting and insurance products. The Bank is the legacy of a 30-year-old Canadian trust company - Bayshore Trust which was sold to Trimark Financial Corporation, Canada's third largest mutual fund company, in 1996. In the same year it was licensed as a Barbados offshore Bank.

Bayshore’s geographical client base is predominately North American, with a particular focus on Canada. That said, the bank’s managing director, Penny Ettinger, emphasises that the bank has been working to expand its client base into the UK and Europe, and sees that as its next big step.

Ettinger describes Bayshore's expertise as a premier provider of unique planning and personalised service. The senior management team consists of accredited experts in international tax, investment management and corporate services. "We take great pride in whom we do business with. Major professional firms and noted experts in international tax planning and investment management regularly demonstrate their confidence in us by introducing us to their most valued clients.”

The Bayshore management team firmly believes in the value of its close association with some of the world's leading asset managers. “Our clients have access to advisors that would otherwise difficult for many individual investors to reach.” says Wayne Grant, Vice president, investment management. “Our investment bench strength extends well beyond Barbados to major financial centers such as New York, London and Toronto.”

Ettinger adds that Bayshore's location in Barbados rather than New York or Toronto is not due to a preference for sun and sand, it is the combination of financial planning options and structures “such as offshore banking, IBC’s, trusts, variable life and annuities, all in a low-tax environment governed by comprehensive legislation interwoven with a web of tax treaties” - that make the domicile appealing.

The Managing director emphasises in particular how Barbados' trust industry has matured. The island is widely recognized within the industry as having a very strong trust product, uniquely offering three different types of structure - offshore, international and domestic – each possessing different attributes. This is a boon indeed given Ettinger’s perception that “people are becoming more sophisticated and are using trusts increasingly not just for tax-planning but for succession and preservation of assets, with their main focus being the wealth that they have."· Diversification is another key trend, as is making sure that the wealth is invested in an appropriate fashion

Ettinger believes trusts are still a premium offering, particularly because the whole preservation issue is becoming increasingly important to people. “An offshore trust is one of the most flexible estate planning and investment vehicles available. Trusts permit complete flexibility in the management, control and ultimate distribution of assets, preservation and protection of wealth, and enhanced confidentiality." The variety and flexibility offered by Barbados' international trusts act is very useful in that regard.

Offshore trust structures may also alleviate succession duties, wealth taxes, future hostile claims, forced heirship, exchange controls and probate fees. It is for that reason that when pressed as to which offshore 'product’ available in the market today has the most potential and longevity, Ettinger picks the trust.

Like the trust itself, Barbados has characterised itself with longevity and stability.

"Recent publicity about offshore jurisdictions has for the most part not tarnished Barbados.” Explains Maurice Fortier, vice president, investment services. “Barbados is very different from other jurisdictions in that it has always focused on issues such as compliance, transparency, knowing your client and regulating the international business community.”

The business that comes to Barbados has always been extremely high caliber, says Ettinger. “It has never been a volume business here, it has always been quality driven.”

Much of its stability and security can be put down to its network of tax treaties with many of the G7 and major industrialized nations. That is part of the reason it has escaped the ‘offshore is bad’ tarnish. “Unfortunately, that tarnish was painted with a rather broad brush. Ultimately Barbados is a very stable, well regulated jurisdiction, with a government that is very much committed to keeping it that way. In addition, I believe the relationship between Barbados and Canada will continue to be very strong.”

There is intense competition among international financial centres for private client business, and thus it is a healthy sign that Barbados is not resting on its laurels, reliant on serving a core market with a staple product. A new offering being developed in Barbados, with wide legislative support that is proving popular arc variable life and annuities products.

These services are a part of Bayshore’s ‘turn-key’ offering. For example, as an alternative to a trust, the bank’s clients can structure their portfolio as a single or multiple whole life assurance policy. By investing in mutual funds and other securities with an ‘insurance wrapper’, investors can insure that the current total value of the portfolio is paid to heirs on a tax-free or tax-reduced basis. Another strategy is to purchase an annuity invested of selected securities of a set-up like a segregated fund to protect the original capital investment.

Insurance-based products alongside trusts are core markets for Bayshore, but ultimately act in a supporting manner to its main focus of asset management. As Ettinger explains: “Our focus are very high-net-worth individuals and thus we are always developing the right tools and products to meet our clients’ needs. We don’t create a product and then go out and market it – we use techniques such as segregated portfolio management to give clients something more, a very personalised service.” Such an approach combined with world class asset allocation strategies.

In STEP with the rest of the Caribbean

Penny Ettinger’s prominent and respected role in the domicile’s financial sector is elevated by her position as chairwoman of the Barbados chapter of STEP (Society of Trust and Estate Planners). Her current main priority is the annual STEP Caribbean conference in Miami May 6-8th, as Barbados is co-sponsor and Ettinger is part of the overall steering committee. Other domiciles represented include Cayman, Bahamas, BVI, Anguilla, Turks & Caicos, Miami as well as Barbados. She is sure that such a big project will raise her chapter’s profile within the Caribbean trust profession.