Harbour Wealth have partnered with Swissquote. Swissquote is the Swiss leader in online banking. The company has been in business since 1997, they currently have approximately 300 000 clients with CHF18 billion in assets under custody.  Swissquote is the official forex and online financial trading partner of world renowned football team Manchester United.

Having said that, Harbour Wealth conducted a thorough due diligence before entering into a new service level agreement with Swissquote. We take our role as custodians of our clients’ money very seriously.

Offshore investing is a critical part of diversifying a client’s investment portfolio. We have now created the opportunity for our clients to have an offshore bank account, and investment account, on the same portal. Our client’s money can be held in a wide range of currencies, however when we invest the money, we invest in US Dollars due to ETF (Exchange Traded Fund) availability.

For many people, the process of opening an offshore bank account can be a daunting and onerous experience. Added stress is also caused by the risk of so many scams, especially offshore! At Harbour Wealth, we strive to make this option much easier for our clients. We have simplified all account opening documentation for our clients, be it individuals, joint account holders, companies or trusts.

Another problem that exists with offshore bank accounts and investments is the issue of Probate. This refers to when a person passes away and their estate needs to be wound up. In many jurisdictions, a South African Will is not accepted. With Swissquote, the account can have multiple Joint Account holders, so when the principle account holder passes away, the account will remain in control of the other account holders. It does depend on what the deceased’s Will stipulates though. Whatever is not left to the spouse will be a deemed asset in the estate of the deceased, and subject to Estate Duty, even though the money will remain in the Swissquote account.

Switzerland does not levy any inheritance tax (unless you are resident in Switzerland). Inheritance tax is levied in the country where the deceased resided at the time of his death. For example, in the UK, even non-residents can pay up to 40% inheritance tax on their UK assets!

Harbour Advisory has created a Cautious and Growth Investment Strategy consisting of a combination of Exchange Traded Funds (ETF’s). An ETF is a diversified collection of assets (like a fund) that trades on an exchange (like a stock). ETFs are an easy-to-use, low cost and tax efficient way to invest your money.

Harbour Advisory Global Growth (USD)

db x-trackers MSCI World Index ETF – 50%
Lyxor MSCI India Index ETF – 5%
ComStage MSCI Emerging Markets ETF – 10%
iShares Listed Private Equity ETF – 8%
Lyxor FTSE EPRA/NAREIT Global Developed ETF – 25%
Swissquote Cash – 2%

The portfolio above aims to provide exposure to growth assets such as Global Equities and Global Listed Property. The time horizon is long term and the objective is capital growth. This portfolio is recommended for an investor with a 5 year plus investment time horizon. Investors in this portfolio should be prepared to tolerate high fluctuations in the value of their investment over the short term. The Portfolio will typically hold a passive index tracking core, as well as various asset allocation and regional active tilts. This portfolio targets a growth rate of US CPI + 4 to 5% p.a.

The Tax implications for South African tax payers are the same as other discretionary investments. Income tax, dividend tax and CGT (Capital Gains Tax) are all payable in SA.

In the Harbour Advisory Investment Strategies we strive to make use of “Roll-Up” funds, meaning the income and dividends are rolled up and transformed into Capital Gains Tax within these funds, and this CGT is only realised when liquidity is required from the investment. The Lyxor Global Real Estate ETF in our investments is the only exception to this. As this ETF is domiciled in the United States, it is required by law to distribute dividends.

This is just a brief outline of our exciting Swissquote offering. If you would like to open an offshore account, to take advantage of the above benefits, please don’t hesitate to contact us at Harbour. We look forward to making your life easier, and keeping your costs in check so you can generate real wealth for yourself.