CREATION & PRESERVATION OF WEALTH

Guy van der Walt, Vice CEO and Kamil Stender, CEO and Founder, Helvetia Wealth

Accessibility to Swiss bank accounts and solutions has long been a privilege of the rich few and a dream of the masses. Kamil Stender and Guy Van Der Walt explain why, thanks to Helvetia Wealth, smaller private investors are now getting a better deal

Making a wide range of institutional investment solutions available to private investors in Ireland, Helvetia Wealth can provide exclusive investment opportunities for the Irish investor.

Having enjoyed nearly 20 years of solid growth, Ireland has one of the most envied economies in the European Union. The recent boom in property prices has been a major contributory factor to the creation of so much new wealth. The Irish Stock Exchange (ISEQ) has enjoyed rises of over 280% since 1997 and the boom has been led by the banks. The constantly rising demand for property over the last ten years has been a major factor to economic growth.

Share Performance

In Ireland there are four major companies - Allied Irish, Bank of Ireland, CRH and Anglo Irish, which together constitute 52% of the total make up of the Irish stock market. There is very close correlation between the share performance of these four companies and that of the wider property market. According to Guy van der Walt, “many institutions and fund managers are concerned that a slowdown in Irish property prices may lead to a reduction in consumer borrowing and home starts. This would quickly lead to lower share prices of the “big four” and then permeate across the wider ISEQ.” He adds that the March slowdown in property values was the first such slowdown in five years and that with ECB rate hikes looking certain, many anticipate a further reduction in house prices over the remainder of the year. “The Government is expected to attempt to stimulate house price growth by reducing the rate of stamp duty in the coming elections, although this move is unlikely to help first-time buyers to access a market already beyond reach. Whilst even a temporary slowdown in housing price growth could be extremely detrimental to the share prices of mortgage lenders and the large banks there are still many positive stories coming from Ireland,” van der Walt says.

Kamil Stender believes that in times of uncertainty, diversity is key. “Our clients are being advised to reduce their weightings in Irish banks (and property related stocks) in favour of other areas with less correlation to house prices. Current market volatility is still very high and our clients preference is to invest in award winning managed funds rather than riskier individual shares. Funds make more sense. In a bull market, the top funds consistently outperform their benchmarks. Even if markets head Southwards the top funds can reduce the draw-downs or losses for investors,” he says.

Investment Strategy

At Helvetia Wealth they have reduced their client weighting in equities, locked in their recent gains and adopted a more defensive investment strategy in response to a sharp decrease in consumer confidence. “With so much uncertainty around today, products carrying full capital protection are our preferred vehicle for investors. Our structured product desk allows us to wrap and tailor investments exactly to our client needs,” says van der Walt.

In recent months the Helvetia Wealth team have seen the first tentative signs that Ireland’s housingled domestic economic boom is finally starting to run out of steam. “House prices in some areas recorded falls in price levels. Overall, we see GDP growth in Ireland likely to slow to around 5% this year - the weakest performance for a few years but nevertheless still a pretty soft landing. We anticipate little change in inflation with rates expected to stay above the euro-zone average in 2007 and 2008 further eroding Ireland’s competitive position,” argues Stender.

Wealth Preservation

According to Stender, “after having created so much wealth the logical step for many Irish investors is now wealth preservation. Compared to mainland European neighbours, Irish investors still have less investment choices than their European counterparts. Traditional high street names only offer poor performing retail products and solutions. Overseas asset managers such as Helvetia Wealth can better assist Irish investors develop wealth preservation strategies by providing broader investment choices, including those previously structured “exclusively” for the institutions. Many clients are reducing their property holdings within the domestic market.”

Vice CEO, van der Walt explains the advantages of the B3 product, (Best of 3) which was issued exclusively for their clients earlier this month and features 100% capital protection guaranteed by Deutsche Bank. “The product was launched in response to requests from many of our clients with larger lump sums to invest. The solution is designed to produce positive returns under any market conditions. Its features include a short four-year investment timeframe with 100% capital protection at maturity. It can be sold at any time after six months without any redemption fees and is considered a complete investment solution that diversifies investment across three main asset classes; equities, commodities and bonds,” he says.

According to van der Walt, B3 takes the guesswork out of deciding which asset class will enjoy the strongest performance over the next four years. Through a single investment into the note, clients are assured the highest level of participation in the growth of equities, commodities and bonds. “There are three strategies within the solution. The aggressive strategy will flourish if we see a continued rise in equity and commodity prices over the next four years. The balanced strategy will flourish if there is a slow down in the growth of world equity markets in favour of commodities. Finally, the defensive strategy protects investors against severe drops in financial markets through being more heavily weighted toward bonds,” van der Walt adds.

Protection Against Uncertainty

At maturity the solution uses a “lookback” mechanism to calculate the performance of each of the three strategies. The client receives the yield from the strongest performing of the three strategies on all his investment capital. B3 is a complete solution designed to protect investment capital in an uncertain market. “As a specialist in the design of structured products, we are able to deliver a variety of solutions offering more upside participation for clients with little or no downside risk,” Stender says.

Personal Service

Helvetia Wealth intends to bring a renewable energy fund and a water fund to market, and say they also access other exclusive third party award winning managed funds for their clients. “We recognise every investor as an individual with unique objectives and requirements. Before we can determine an appropriate asset allocation model for an investor it is important for us to fully understand his objectives and expectations. All our clients, whether large or small, receive a high level of personal service and have constant access to their dedicated private client advisor. Being independent allows us to deliver the ideal financial structure to every client regardless of the issuer. This adds to our competitive advantage, especially over the retail banks and financial advisors touting the products of one organisation,” Stender explains.

Accessibility and Transparency

Over one third of the world’s private wealth is held and managed in Switzerland. Many investors see Switzerland as the home of private banking but in the past, offshore investing was frowned upon because of lack of transparency and problems obtaining correct tax reporting. van der Walt insists that they will assist investors by providing them with full reporting on their investments. “Clients can access their bank account 24 hours a day across the internet. When we receive an application for an account the forms are sent the same day to the investors home address. Completing the application form requires two signatures (three if the application is for a joint account) and a certified copy of the client’s passport. The account application form also requests our custodian to open a multi currency bank account (in the name of the client) and provides an international investment platform,” he explains. Helvetia Wealth hold limited power of attorney over the account, allowing them to ensure that there are no settlement issues and the investment is seamless.

“No-one, other than the account holder, is authorized to access or withdraw funds on the account. Once our compliance department is satisfied that all the details provided on the application form are correct, they forward it to the compliance department of our custodian bank. Within 24 hours of receiving the documents in Zurich, the account is opened. We can then provide the client with their account number and IBAN number. Within 10 working days, clients receive their secure login details by post from the custodian bank. The client is now able to access his account online. Our clients find this feature very useful because they are able to better control their investments through real time valuations,” van der Walt concludes.

Contact: Guy van der Walt, Vice CEO, Helvetia Wealth
T: +41 4456 72230
E: g.vanderwalt@helvetia-wealth.ch
W: www.helvetia-wealth.ch