The authors argue that cross-border taxation is one of the most underestimated risks in wealth management. 

The following article examines a topic that will be familiar to many of our readers: the sheer complexity of tax and regulation around the world. At stake is what one does, compliantly, to minimize the damage while delivering high-quality service. The authors of this article try to address this question. The writers are Michael Calkin (pictured below), managing director at Alvarez & Marsal Private Wealth Partners, and Evan Gamble (pictured below), MD at A&M TAX. (More on the authors below this article.)

The editors are pleased to share these views; the usual editorial disclaimers apply. To comment, email tom.burroughes@wealthbriefing.com and amanda.cheesley@clearviewpublishing.com

Michael Calkin

Evan Gamble

Let’s be honest. If someone tells you that wealth management is simple, they probably haven’t spent much time grappling with the reality of global tax laws or the ever-changing maze of regulations.

Managing wealth in one country is already an exercise in nuance. Add multiple jurisdictions, cross-border asset flows, and real-time regulatory shifts, and you are no longer strolling through the park. Instead, you are playing five-dimensional chess, blindfolded, on a moving train.

But that's precisely what makes this work so intellectually rewarding. Complexity, when approached with the right mindset, is not a burden; it's an opportunity. Hidden within these global systems are the tools to unlock lasting value for clients.

The tax challenge 
Cross-border taxation is one of the most underestimated risks in wealth management. Consider a client who lives between the US and Europe, with assets held in multiple jurisdictions. Without a tailored strategy, they could easily face double taxation or, worse, fall out of compliance altogether, which may result in significant penalties and interest (i). 

International tax treaties help, but they often fail to capture the whole picture. The rules contain many gray areas, and the penalties for missteps can be severe (ii). Additionally, there is the greater complexity introduced by digital assets. Cryptocurrencies have started to enter the mainstream, and regulators are racing to keep pace. Different countries approach them in radically different ways, and perhaps the only thing more volatile than the price of bitcoin is the legislation surrounding it (iii). 

Regulation without borders
Tax codes are only the beginning. Anti-money laundering regulations, asset reporting requirements, and definitions of residency or beneficial ownership can vary significantly across borders and are subject to constant change. Determining a client's tax residency can lead to months of legal work, unexpected tax filings, and potential penalties and interest, as well as unexpected tax liabilities (iv). 

The rise of digital finance adds fuel to the fire. As financial technology innovation accelerates, new layers of oversight emerge. What worked last year may no longer apply. Clients with complex profiles require something better.

This is not a world where off-the-shelf advice suffices. This is a world where precision prevails.

Turning complexity into opportunity
Here’s some good news: with the right team, the right technology, and the right strategy, [managing] complexity can become a competitive edge.

The tools available today are more sophisticated than ever. Technology allows us to monitor regulatory changes across jurisdictions in real time. It helps eliminate noise and enables us to focus on what matters: building strategy, making informed decisions, and guiding clients with clarity and confidence (v). 

But technology alone isn't the solution. Actual impact can occur when you combine legal insight, tax expertise, economic fluency, and emotional intelligence. When your advice is cohesive, your clients notice it. Their plans can become more effective. And their trust grows.

What it takes to lead
To achieve this level of service, wealth managers must assist in global strategies. This entails:

1. Developing robust networks across legal, tax, and regulatory disciplines. The right relationships broaden your toolkit in every direction; 
2. Investing in continuous learning is essential. Laws change, and standards shift; staying current is not optional; 
3. Using innovative technology that provides insight, not merely information; 
4. Translating complexity into language that clients can understand and take action on. This is where authentic leadership manifests; and 
5. Planning for what comes next, because if your strategy only works for today, it will already be outdated.

The future of global wealth 
Globalization shows no signs of slowing down. Capital will continue to flow freely. Families will continue to live across borders; whereby various taxes will apply to move money between them. Innovation will consistently advance before policy. All of this indicates that global tax and regulatory complexity are here to stay. It is establishing itself as the new baseline.

But for those who are prepared, that complexity is not a drawback. It is an advantage.

Footnotes

I,  Pivolt, “Cross-Border Taxation in Wealth Management. https://www.pivolt.global/academy/cross-border-taxation-in-wm
2,  Pivolt, “Cross-Border Taxation in Wealth Management. https://www.pivolt.global/academy/cross-border-taxation-in-wm
3,  International Adviser, “Exploring the Complexities of Global Wealth Management” https://international-adviser.com/exploring-the-complexities-of-global-wealth-management-for-high-net-worth-clients/
4,  Pivolt, “Cross-Border Taxation in Wealth Management. https://www.pivolt.global/academy/cross-border-taxation-in-wm
5,  International Adviser, “Exploring the Complexities of Global Wealth Management” https://international-adviser.com/exploring-the-complexities-of-global-wealth-management-for-high-net-worth-clients/

About the authors

Michael Calkin is a partner and the practice lead at A&M Private Wealth Partners. He brings more than 20 years of experience in investment management, business development, and advising UHNW families. Prior to co-founding A&M Private Wealth Partners, he held senior roles at JP Morgan, Citi, and ASB Capital Management, and co-founded Washington Growth Strategies, a multi-family office. Michael holds a bachelor’s degree from Miami University (Ohio) and an MBA from George Washington University.

Evan Gamble is a managing director with Alvarez and Marsal Tax Houston. He specializes in cross-border transactions, international business structuring matters, and US international tax compliance and provision. He advises multinational clients across various industries, including energy, technology, manufacturing, service companies, and real estate. His expertise includes acquisitions, divestitures, reorganizations, repatriation, entity rationalization, treasury functions and IP alignment. Prior to joining A&M, he spent over 16 years with Big Four accounting firms PwC and EY.

Disclosure
Investment advisory services are provided through A&M Private Wealth Partners, LLC (“AMPWP”), which is an SEC-registered investment advisor. SEC registration does not imply a certain level of skill or training. This piece and its content reflect AMPWP’s views at the time of its writing, and the information presented and AMPWP’s views are for informational purposes only. Nothing herein is or should be construed as an investment recommendation or a solicitation to buy or offer to sell any security. AMPWP does not provide legal, accounting, or tax advice, and AMPWP’s investment advisory services are not intended to act as a substitute for such advice. AMPWP encourages you to seek the counsel of a qualified attorney and/or accountant for legal, accounting, or tax advice. A&M Tax is an affiliate to AMPWP and for additional compensation to advisory clients can provide integrated tax planning, compliance, financial reporting, and specialized advisory services across federal, state, local, and international jurisdictions, as well as other services relating to transactions, transfer pricing, indirect tax, compensation and benefits, real estate, private clients, valuation, restructuring, incentives, tax technology, and global trade and customs.