The deVere Group Tools Up For Onset Of US FATCA Act

Tom Burroughes

31 July 2012

Editor’s note: The deVere Group, a global independent financial advisory firm that this publication's sister site reported on recently about its expansion plans, has also commented on how the upcoming US FATCA Act legislation – taking effect in stages from 2013 – has prompted a surge in client enquiries. A controversial law, FATCA is designed, its framers hope, to stamp out offshore tax evasion. Critics say the legislation typifies the oppressive nature of US’s worldwide system of tax, contrasting with the territorial approach enacted by most other jurisdictions. Whatever one’s views, FATCA is a big issue for the global wealth management industry. This publication recently asked Nigel Green, chief executive at the firm, for his views about the impact of FATCA.

You say the volume of enquiry has gone up by 65 per cent over three months - is that compared with the same sort of period last year?

There has been a 65 per cent increase in the volume of enquiries in the last three months as an increasing number of US citizens, especially high net worth Americans, begin to realise the implications of FATCA.

What sort of enquiries are you getting about FATCA?

People are asking our advisors questions including: How can I be FATCA-compliant and still be tax-efficient? What preparations do I need to make and do I need to make them now? What types of payments will be affected? If my country of residence has a tax treaty with the US, am I exempt from the implications of FATCA?

What sort of problems/issues are people telling you about concerning FATCA?

Many of those enquiring are concerned about the lack of available, public information, about reporting obligations, and about the implementation time frames.

How many banks/other institutions do you think are turning Americans away? How big a problem is this proving to be?

Some of the major names in wealth management are now refusing American clients as dealing with them, they feel, will prove to be too costly and/or complex. I suspect this will continue as we approach 1 January 2013.

This is a major problem for US citizens who have foreign accounts because FATCA is new legislation and they need to be advised correctly from the start and there are fewer and fewer advisors willing to assist them.

However, the deVere Group is committed to ensuring our valued American clients have a smooth transition into the FATCA era, and beyond, and have, therefore, invested a lot of our resources in this area.

What sort of advice do you typically give people?

The sorts of advice we give to each client varies considerably as every one has different circumstances and financial goals. And for these reasons, it’s imperative that ahead of the implementation of FATCA, Americans who live overseas or have dealings with foreign financial institutions speak to an independent financial advisor who has experience in expatriate financial planning.

Over what sort of time-frame do you see this sort of heightened enquiry continuing to exist?

We fully expect this heightened level of enquiry to continue, and indeed increase, as we approach the 1 January 2013, the date from which all US citizens will need to start reporting their worldwide earnings to the IRS.

Are you thinking of hiring more people to deal with FATCA?

As a direct result of soaring demand from US citizens, we’re recruiting leading industry professionals to ensure we deliver a world-class service to our existing and potential American clients.