Now a second opinion from an expert is just one phone call away – PART I
At a time when obtaining a reasonable rate of return on investments is challenging, it is perhaps understandable that clients with offshore structures may start to focus on the cost of administering the structure. When the annual financial statements of the trust or company are presented to the client, if the income is not what it once was (which is perhaps likely in the current economic climate), the client may become focussed on how to reduce costs. Awkward questions about the quantum of fees being charged to a structure may start to be asked. Can the directors or trustees of a structure justify the fees being charged? Would the client benefit from moving the structure to a new service provider who may be willing to administer the structure for less? Can the possibility of changing administrator be used as a means of negotiating a cheaper annual administration fee?
Many people with offshore structures will have considered these questions and perhaps moved the structure from one service provider to another to reduce costs. Controlling costs is of course important and in a competitive market. There will always be pressure on fees. However, there is a danger that in the interest of driving down costs, the quality of the service suffers.
At a time of increased regulation, complex tax changes, media and political focus on the use of offshore structures, is this really a time to lose sight of the value of using an experienced trust or corporate service provider? Is driving down costs, potentially at the expense of expertise really beneficial in the long term? With automatic exchange of information becoming the international standard, now is the time to focus on something other than reducing costs. For example, focusing on whether the offshore structure has been administered in accordance with the original advice or whether there are any hidden/ unknown issues which may come to light once the tax authorities enquire into the structure.
At Abacus, we pride ourselves on the quality of service we provide to our clients whilst being mindful of costs. If you would like to know more about the services we provide, please visit AbacusIOM.com to find out more.