Can you give me a variation on the size of these contracts between countries?
Luc: The average for Luxembourg and Belgium – two historical markets – is around €1m. Italy is a bit higher, at €1.2m, while France is getting bigger tickets of between €3m and €5m. The largest tickets we have within the company are international, UK and Swiss-oriented customers – not Swiss residents but clients who have their bank in Switzerland.
In the six countries you target, is it correct to say that potential clients are internationally mobile?
Mike: They do not actually have to be internationally mobile. We are not going to turn away a UK client with £5m to invest, but I would say that once you get to a certain level of wealth – certainly when you get into ultra-high net-worth, which is generally $20m and above – realistically, you are dealing with people with cross-border interests.
Whether it be properties in other countries or businesses that are in different territories, chances are that some of their wealth will end up being used in a different jurisdiction, under a different tax regime, which could be better or worse than the original tax regime.
The fact that we have got a library of knowledge is crucial because it means that if we work with someone in the UK today, that’s the most relevant fact today, but in three, five, even 10 years’ time, some or all of that money may be sitting somewhere else, and it is that knowledge which is important.
You are having to deal with a live scenario of tax-avoidance crackdowns and regulatory change of non-dom status.
What does the future hold for IWI?
Luc: We have focused on the development of our core markets and we have also built some specific segments, for instance, Israeli and Mexican residents, where we have fully compliant solutions.
Something that will be beneficial for the UK market is that we accept some types of private equity as an underlying asset in our insurance contracts, unlike most other Luxembourg companies.
These are all initiatives we have developed in 2015, but we have to capitalise on it.
Mike: The private equity has to be through a discretionary fund manager, so it can be part of somebody’s agreed strategy and mandate.
Luc: These are all initiatives we have developed in 2015 but we have to capitalise on it.
There is also another development that is important for the future of IWI. Over the past month, we did a reflection with our shareholder with regards to the future of the company, so all the strategic options have been looked at.
The decision is that Belfius itself is not the best shareholder to support IWI in its further development. This is an exercise that has been done, so we are open to welcoming or tempting new shareholders.
