In an uncertain economic climate, Jean-Baptiste Bois, Equatus, shares his thoughts on the challenges of wealth management. He discusses the essential strategies for protecting and optimizing clients' wealth, particularly through asset diversification and tax optimization.
Faced with current economic uncertainties, how do you adapt your advice to ensure the protection of your clients' wealth?
Faced with the current economic uncertainties, asset protection is becoming a crucial issue. This calls for prudence and adaptability. Sound wealth advice must be proactive, ensuring that customers' assets are diversified, protected and aligned with their long-term objectives. Diversification therefore remains a fundamental pillar of risk mitigation. This means balancing the portfolio between different asset classes: equities, bonds, real estate, gold and other tangible assets. In times of uncertainty, a more cautious allocation may include defensive assets such as government bonds.
It's also crucial to encourage customers to retain a sufficient share of liquid or easily mobilized assets, so as to be able to meet urgent financial needs and/or take advantage of market opportunities. In times of uncertainty, it's also a good idea to encourage customers to put in place clear estate planning, to protect future generations. Tools such as gifts and life insurance can be used to pass on assets in a tax-efficient way, but above all to protect family wealth in the event of disputes or inheritance.
Have you seen a noticeable increase in capital moving out of France recently?
In fact, since last spring, we've been approached by customers wishing to move capital out of France and find them investment solutions to protect their family wealth.
What are their main motivations and objectives?
While there may be multiple reasons and personal motivations for moving capital out of France, at present, this is due to two main reasons:
- High taxation and tax uncertainties
- Economic and political anxieties
Overall, as far as we are concerned and according to our interviews with our customers, the main motivations are to seek to move their capital in order to optimize their wealth. In the current context, their motivations are centered on reducing the tax burden, diversifying risk geographically, protecting against economic instability and preserving wealth for future generations. Their objectives are therefore at once fiscal, economic and personal, with a strong desire to secure, grow and pass on their wealth efficiently.
What specific advice do you give your customers for navigating this landscape?
In a context of capital shifts and economic uncertainties, it's essential to adopt thoughtful wealth strategies tailored to each client's specific situation.
For customers who wish to remain in France but optimize their tax situation, life insurance is one of the most flexible tools in terms of wealth management. Depending on your investment capacity, you can opt for:
- Multi-support life insurance policies under French law, but under Luxembourg supervision, for the flexibility of French policies while benefiting from Luxembourg asset protection.
Or / and
- Dedicated management life insurance policies such as FID (Fonds Interne Dédié) or FAS (Fonds d'Assurance Spécialisé) for those with greater investment capacity. This provides the benefit of discretionary management by a dedicated, approved manager, offering access to a diversification of financial products (access to foreign markets, live securities, private equity, structured products, etc.).
As part of wealth optimization, it is also possible to turn to gifts as well as ownership dismemberments: passing on assets gradually using gift-sharing or ownership dismemberment mechanisms (usufruct/ bare ownership) to reduce future inheritance taxation. In all cases, and whatever solutions customers seek, their short- and long-term objectives should be taken into account.
More concretely, for investors with assets in excess of 250,000 euros, how do you organize wealth management services?
For investors with assets in excess of 250,000 euros, dedicated wealth management services need to be customized and structured to meet their specific needs. This requires assessing their risk tolerance, investment horizon and priorities (capital growth, preservation, stable return), in order to organize the construction of a diversified portfolio across different asset classes while respecting the client's risk profile.
Diversification is the key to good management to ward off market risks and can therefore include:
- Equities with geographic and sector diversification.
- Bonds: government bonds, strong corporate bonds and, for added yield, emerging market bonds.
- Alternative funds: hedge funds, private equity, commodities or gold to diversify risk.
- Suggest sustainable investments by offering responsible investment options (SRI, ESG) to meet the ethical or ecological aspirations of certain investors.
- Access to specialized funds, usually offered to qualified investors (private equity, venture capital funds, hedge funds), often inaccessible to less affluent individuals.
In conclusion, the wealth management service dedicated to customers with movable assets in excess of 250,000 euros stands out for its personalized approach. The aim is to provide a comprehensive service that meets the customer's requirements, while ensuring rigorous protection of their assets and supporting them in their personal and financial projects.
Wealth Management.
This post was translated from the original French.