Strategic Credit Solutions
To fulfill this expectation of trust these advisors must be knowable regarding the many areas important to the overall financial health of the client and their family. Multi-generational financial planning, tax planning, investment management, insurance management, family governance, risk management, banking advice, and Strategic Credit advice, are all important components of every HNW or UHNW family's financial solution. International Wealth Advisors have to account for additional components like, in-county interest rates, currency exchange rates, in-country inflation rates and applicable tax issues. In additional, they must be keen observers of the client's typical financial behaviors. Many of these behaviors don't key the typical international client to think credit.
Just as with domestic US families, often times the financial solution related to many of actions discovered from these "Observable Client Behaviors (OCBs)" can be aided by the use of a Strategic Credit facility. The word strategic in the term Strategic Credit relates to the reason or purpose for which the HNW or UHNW client would use leverage. Typically, the NRA client will not be familiar with the economic benefit of borrowing in the US. Advisors that can bring these credit or leverage strategies to the attention of their NRA clients will strengthen their client relationship in a very competitive market and importantly, expand their company's revenue generation beyond traditional "fee based" services and deposit credits.
Similar to the domestic US client, as part of a the international client's financial solution Strategic Credit might be used:
1. instead of the typical loan, mortgage or line of credit with which the client might be familiar or,
2. the use of portfolio cash or a portfolio liquidation to raise cash.
"Strategic Credit” will always provide the client with the opportunity to realize “Quantifiable Economic Benefit (QEB)." This economic benefit can be measured and generally be classified in one of three ways; those solutions where Strategic Credit can offer interest and fee cost savings over the more traditional mass market or in-country credit available, or through those solutions where, by the use of Strategic Credit the client can reduce personal or corporate taxes while benefiting from the use of US dollars rather their local inflation-sensitive currency, or where the client's cash that would be otherwise utilized in the planned action can be or remain invested over the term of the Strategic Credit’s outstanding. When used in combination with the clients' offshore Private Investment Company (PIC) these strategic can be powerful generators of economic benefit for the client and their family members.
Becoming familiar with these International client OCBs can put wealth advisors in the unique position of offering and demonstrating the economic benefit that a tailored Strategic Credit Solution can provide. Linked here is a chart outlining a few of these International OCBs. I think the client behaviors will ring true with all International Advisors. You have likely been asked for help and given advice around each of these situations.
As this blog progresses, I will post Strategic Credit Solutions that can be used when these International OCBs arise and describe how each solution has the potential to provide the client with Quantifiable Economic Benefit. Additionally, you may run into some level of client resistance as is the case with most new ideas. I'll also provide advice on on to overcome those objections as they arise. Stay tuned.
If you would like to discuss this concept at a deeper level or would like to explore ways I could aid your team in realizing its credit production potential don't hesitate contacting me.
Your "likes," shares and comments are welcomed and appreciated
Mark S. Johnson
Strategic Credit Solutions
404.909.5167
mark.johnson@strategiccreditsolutions.com
@creditstrategic on Twitter
No comments:
Post a Comment