ASWM Summit 2019 SAAM, Future of Independent wealth managers Vision - PowerPoint PPT Presentation

ASWM Summit 2019 SAAM, Future of Independent wealth managers Vision & Facts Serge Pavoncello

ASWM Summit 2019 Introduction Global environment since the financial crisis

… What about Switzerland? Quelle: ESVG 2010, Quartalsaggregate des Bruttoinlandprodukts, Produktionsansatz, unbereinigte Daten 3

Federal Budget Quelle: SNB 4

What about Finance? Quelle: Kennzahlen Finanzstandort Schweiz (BFS/SECO) 5

… and Independent Wealth Managers Quelle: Kennzahlen Finanzstandort Schweiz (SNB) und Jahresberichte des VSV 6

Environment since the financial crisis 7

ASWM Summit 2019 SAAM (VSV, ASG) Role and actions

SAAM’s role By-laws of the SAAM Association ▪ Art 2 : Purpose • To represent its members and their interests • To reinforce the position and reputation of IWM • To cooperate with the authorities in order to elaborate new rules • Promote education • Assist members in the resolution of professional problems 9

SAAM’s role Historical perspective – Milestones ▪ 1986 Creation of the Association ▪ 1987 First Code of conduct ▪ 1999 Self-regulatory organisation SRO ▪ 2012 First draft of the new financial law ▪ 2018 Finalization of the FIDLEG and FINIG ▪ 2019 Finalization of the FIDLEV and FINIV ▪ 2020 New laws and ordinances come into force Splitting of the association “ Verband / SRO” 10

FINIG - a long way to mould the future 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Lehman Preliminary works FC: final vote Brothers FINMA and Financial Mandate to Consultation Message bankruptcy June stake holders the FDF 2018 11

SAAM stand by me 1. Member’s representative A professional association to support its members 12

SAAM stand by me Representation of interests by the SAAM ▪ Laws (reminder) - The initial draft of the Federal Council would have induced the end of a major part of the profession - The SAAM was the unique association to fight against such a situation - These options were the basis for the drafting of the FINIG - The Parliament thus adopted a law compliant with the SME, that • enables our members to continue their activities with good minimum standards • recognizes the wealth management and its supervision • guarantees the titles «Vermögensverwalter / gestionnaire de fortune» 13

SAAM stand by me Roadmap to the new environment. 2020 transition year AO SO-FIT Universe AO SRO SO-FIT 2020: transfer of the SRO activities to the AO 2021 2022 2023 Full support of SAAM in the transfer process SRO SAAM Association SAAM 14

SAAM stand by me Representation of interests by the SAAM ▪ Draft / implementation of the new standard rules The SAAM is everywhere: 1. Finalization of the ordinances: meetings with FFD 2. Definition/Draft the regulation (standards) : meetings with FINMA • Authorization’s request: • Procedure • Task’s allocation FINMA / AO • Documentation for the request • Pre-assessment by the AO • System of « Rating » • Risks classification • Risks analysis (activities, organization, FINIG, AML, FINIG) • Concepts of supervision and audit 15

Last developments FINIG - FIDLEG Representation of interests by the SAAM 3. Other actions: Discussions/Negotiations with politics, SWA, other AO’s applicants, applicants to the Ombudsman (mediation), insurances, etc. • Coordination, harmonization, standards, partnerships, etc. ▪ Creation and implementation of an AO ▪ Easy transfer from SRO to AO ▪ Solution for the Ombudsman (mediation) 16

Last developments FINIG - FIDLEG Actions from SAAM ▪ Legal support • Guidelines/notices FIDELG/FINIG, check-list for authorization • Documents (templates, directives, organizational regulations, etc.) • Workshops, trainings • News, updates, answers to your questions ▪ Training • Solutions for requirements of continuing training ▪ Since 2020, the SAAM, the unique professional and branch association, will continue to represent, advise, support, train and inform its members ▪ The OA will not have the right to advise, support nor train the IWM 17

Last developments FINIG - FIDLEG Legal calendar and transition rules ▪ The IWM and Trustees have until June 30, 2020 to announce themselves (sich melden) to FINMA and 6 months to register to an Ombudsman ▪ The rules of FIDLEG are applicable since January 1, 2020 but FIDLEG set out transition rules (generally 1 year) for the implementation of certain obligations ▪ The existing IWM have until December 31, 2022 to: • adapt their organization to the new FINIG requirements • affiliate with an AO • file the request to FINMA ▪ For the new IWM, since 2020: • affiliate to an AO and an Ombudsman • file the request to FINMA • start the activities after having received the FINMA’s authorization 18

Authorization request to FINMA Material conditions FINIG - FINIV Two « Qualifizierte Geschäftsführer » / one-man company Art. 20 FINIG and art. 18 FINIV ▪ Principle : 2 qualifizierte Geschäftsführer at least ▪ Also accepted : 1 qualifizierte Geschäftsführer if Business Management Continuity is guaranteed ▪ Requirements : • Professional experience : 5 years in wealth management • Training: equivalent to required experience needed to perform an audit of IWM. ▪ SAAM opinion : 2 nd condition is a nonsense, strong opposition and proposition of new drafting Employees : qualifications and experience in their field 19

Authorization request to FINMA Material conditions FINIG - FINIV Independence ▪ Board of Directors (art. 15 al. 5 FINIV): if annual gross income > 5 M, and if required by scope and type of activities. • SAAM opinion : no legal basis, article to be removed ▪ Internal audit (art. 19 al. 3 FINIV): if annual gross income > 10 M, and scope and type of activities • SAAM opinion: no legal basis, article to be removed ▪ Risk management and Compliance Independent (art. 19 al. 2 FINIV): if > 5 people or annual gross income > 1.5 M, and business model with a high risk rating. • SAAM opinion: exception, solely a minority of IWM may be affected (calculation of the thresholds to be specified) 20

Authorization request to FINMA Material conditions FINIG - FINIV Risk management and Compliance Art. 21 FINIG and art. 19 FINIV ▪ Scope: risk management shall cover any activity and major risks shall be detected, assessed, updated and supervised ▪ Independence: reminder no requirement for an independent Risk Management / Compliance, under 2 conditions : not > 5 persons or not > 1.5 M annual gross income, and rating of business model as «no risk». ▪ Should the condition of independence be fulfilled, => Outsourcing is an option 21

Authorization request to FINMA Material conditions FINIG - FINIV Financial requirements ▪ Social capital minimum, art. 20 FINIV (art. 22 al. 1 FINIG) • Minimum Capital of CHF 100’000. - in cash (postposed debt obligation, taken into consideration) • Guarantees or professional liability insurance ▪ Equity capital, art. 21 to 23 FINIV (art. 23 FINIG) • at min. 25% of fixed costs, at maximum 10 M Are fixed costs under art. 23 al. 2 FINIG: • payroll (excl. bonus) and operating charges; amortizations; charges due to corrections of value, provisions and loss ▪ Guarantees, art. 24 FINIV (art. 22 al. 2 et 23 FINIG) • No additional guarantees needed if EC requirements fulfilled Taken into consideration in the calculation of Equity Capital : 50% of • the professional liability insurance cover 22

Authorization request to FINMA Material conditions FINIG - FINIV Type of activities - IWM vs Trustee / Family office ▪ General rule, applicable for all (IWM and trustees) : Minimum thresholds per civil year (i.e. professional activity) : > 50K gross income, or > 20 clients, or > 5M AuM, or > 2M of transactions (copy of the thresholds already existing in art. 7 al. 1 AMLO) ▪ Exception : Activities performed exclusively for close people (i.e. economic or family ties) = single family office → out of FINIG/FINIV scope. ▪ By contrast : multi-family office or services rendered in favour to both close and non-close people → in FINIG/FINIV scope. ▪ Additional authorization needed (rethink the business model, secondary activities to pure WM) 23

SAAM stands by you 2. Lobby & Legal Support Independent and neutral advice for Independent Wealth Managers 24

SAAM stands by you 2020 and beyond ▪ Legal Support • Guidelines/notices FINIG/FINLEG, check-list FINMA authorization • Documents (templates, directives, organization regulations, etc.) • Workshops, trainings • AEOI • FATCA • Data protection ▪ News, updates, answers to your questions ▪ Since 2020, the SAAM, the unique professional and branch association, will continue to represent, advise, support, train and inform its members ▪ The OA will not have the right to advise, support nor train the wealth managers 25

SAAM stands by you Support from SAAM for you and in your day-to-day ▪ Representation of interests • workshops Brexit • view exchanges with economiesuisse, SGV-USAM, SVFB-USPL • discussions with politics and media ▪ Ombudsman • Included into the SAAM’s membership fee ▪ Relationships with depositary banks and business partners • documents (templates of agreements, forms) • manuals • harmonization 26