to do so. I was also fortunate to work with many advisors and regulators who not only share my vision of what wealth owners and the communities to which they are connected really need, but who are also leaders of change on many fronts. Sadly, the “stars” in the wealth-management industry and in the leadership of key financial centers are few and far between, but they do exist, and I have been fortunate to work with a number of them.
Pascal Saint-Amans, the Director of Tax Policy and Administration at the OECD, and his predecessor, Jeffrey Owens, were visionaries who generously supported my work in helping to address issues around undeclared funds, leading to the Liechtenstein Disclosure Facility and related arrangements between Liechtenstein and the UK. With the help of a very talented colleague, Lyubomir Georgiev, we, together with a number of others, were able to achieve what I believe was an example of what was needed at the time, but which received massive resistance from financial centers, law and accounting firms, and private banks and trust companies seeking to preserve the past. I think they regret this, as do many of the wealth-owning families connected to countries other than the UK, who would have benefitted from what was achieved – a confidential and sympathetic approach to moving from an opaque past to a transparent future. The arrangements would not have worked without the huge efforts of Andy Cole, former Director of Specialist Investigations for Her Majesty's Revenue and Customs. Now retired, Andy, a good friend, was appointed by the then Chairman of HMRC, Dave Hartnett, to negotiate the arrangements on behalf of the UK.
I received considerable input to my book, and I thank all those who took the time to share their thoughts. I have particularly to thank Stefan Liniger for his support and detailed comments. Stefan was a strong defender of Switzerland in his comments to me, and while only mildly successful in his efforts to have me tone down my criticism of Switzerland, Stefan shares with me a passion for excellence and a strong belief that Switzerland will rebuild its ability to be a long-term and respected safe haven for global families. Britta Pfister wore green eyeshades when reading my book, and not only provided important comments, but also line-by-line corrections that were much needed and appreciated. My good friend and colleague of decades, Paul Stibbard, provided not only detailed comments – correcting my English (and I very much trust his!) – but also important input on many aspects of my book and particularly my references to Islamic law, one of the many areas of his deep expertise.
Michael Morley was most helpful and supportive in his comments, and for years was one of the few leaders in the industry who I believe really understood what wealth management is about. Stephen Atkinson, Jurgen Vanhoenacker, Anthonia Hui, Leo Drago, Maurice Machenbaum, Amaury Jordan, Tom McCullough, and many others were also most helpful and generous in sharing their thoughts.
I also thank Annie Chen for her years of patient support and insight over martinis and otherwise, Lisbet Rausing for sharing her views over pancakes she made for me in London, and Michael Olesnicky, Jeff VanderWolk, and Richard Weisman for their input and friendship. Professors Joseph Fan of the Chinese University of Hong Kong, S.F. Wong of the University of Hong Kong, and Roger King of the Hong Kong University of Science and Technology were all of support and influence, along with many, many others.
I have been fortunate to work with John Wiley & Sons in relation to the publication of this book, and particularly want to thank Thomas Hyrkiel and Jeremy Chia for their professionalism and support.
Finally, my love and thanks go to my wife, Peggy, for her insights and consistent disagreement with almost everything I say.
About the Author
Philip Marcovici is retired from the practice of law and consults with governments, financial institutions, and global families in relation to tax, wealth management, and other matters. Philip is on the boards of several entities within the wealth-management industry, as well as of entities within family-succession and philanthropic structures. An adjunct faculty member at the Singapore Management University, Philip is actively involved in teaching in the areas of taxation, wealth management, and family governance.
Philip was the founder and CEO of LawInContext, the interactive knowledge venture of global law firm Baker & McKenzie. Philip retired from his CEO role with the company in 2010, and from his Chairmanship of the company in 2011.
Philip was a partner of Baker & McKenzie, a firm he joined in 1982, and practiced in the area of international taxation throughout his legal career. Philip was based in the Hong Kong office of Baker & McKenzie for 12 years, relocating to the Zurich office of Baker & McKenzie in 1996. Philip has also practiced law in both New York and Vancouver. Philip retired from Baker & McKenzie at the end of 2009.
Philip Marcovici is the former chair of the European tax practice of Baker & McKenzie and of the steering committee of the firm's international wealth-management practice, of which he was one of the founders. Philip was also one of the founders of the Baker & McKenzie Asia-Pacific tax practice and was involved in a number of firm and practice group management functions.
Among others, Philip Marcovici received the Citywealth Magic Circle Lifetime Achievement Award in 2009 and, jointly with Fritz Kaiser, the Wealth Management Innovator Award in 2011 for his work in instigating the Liechtenstein Disclosure Facility. In 2010 Philip received the Russell Baker Award from Baker & McKenzie in appreciation for his exceptional contributions to the firm's global tax practice. In 2013 Philip received a Lifetime Achievement Award from the Society of Estate and Trust Practitioners and in 2016 a Lifetime Achievement Award from Wealth Briefing.
Philip holds law degrees from Harvard Law School and the University of Ottawa.
Introduction
This book is designed to share my experience of working with families and their advisors around the world.
My hope is that this book will help wealth owners and their families understand their considerable opportunities to avoid wealth being destructive of their family and of the relationships that exist and will exist in future generations.
While my professional experience has been primarily oriented toward families at the upper end of the wealth spectrum, I am absolutely convinced that wealth can and does destroy any family, no matter what the level of wealth involved. A single asset, whether a piece of jewelry, a sum of money, or a small property, can carry with it enormous importance to the younger generation – either due to its value, or for sentimental and emotional reasons, or, as is more likely, both. How wealth transfers from one generation to the next, who gets what and when, carries messages that are remembered, rightly or wrongly, as being what the transferor “meant.” Gifts of one asset to a son and another to a daughter may be well intended, but may also end up leaving one of the children with a false sense that they were less loved than their sibling.
I also hope that this book will be a guide to those beginning their careers in the wealth-management industry, and that it will help them to understand the real needs of their clients, leading them to become effective, trusted advisors. For the more experienced advisor, this book will, hopefully, help make them even more effective in their work with families. But I am sure that for some in the industry, there will be offence at some of my views. Here, I stand by my convictions – the wealth-management industry, sadly, is in chaos, and often does little to address the real needs of wealth-owning families. For those involved in management and strategy, this is a time of opportunity for those who can understand how an alignment of interests with those of client families can produce results.
The wealth-management industry is a substantial one, producing far more revenues for those involved than investment banking, and one that will grow significantly in the years to come. The Boston Consulting Group, in its 2014 Wealth Report, predicted that global private wealth will reach US$198.2 trillion by 2018, and states that in 2013 there were 16.3 million “millionaire” households around the world, a figure set to grow.
The business of
