“When the facts change, I change my mind. What do you do, sir?”  Keynes’ comments are very relevant to the fast changing world of banking where we do business today. Investors more than ever have to keep on their toes, keep themselves informed, and not be complacent.

Which are the world’s safest or best offshore banks? Where is the best country to open a bank account? Which is the best offshore tax haven? Is it still a good idea to open a bank account in Switzerland?

These are the type of questions I get on a daily basis as an offshore wealth management editor and consultant. For example, in recent months I have seen a lot of the fallout of the UBS scandal in the United States. Swiss banking giant UBS has closed thousands of  bank accounts based in their Swiss branches where American residents or citizens were involved as signatories – even accounts that had been open for decades. Many investors believe that Credit Suisse could be next on the hitlist and are beginning to think that ‘small is beautiful’ when it comes to private banking.

The answer, as I always have to explain, is that there is no ‘best offshore bank’ nor even ‘best offshore banking country.’ A whole range of individual circumstances come in to play. Investors have many different motivations when looking for a new bank. Often these days, the level of service, privacy, and asset protection are far more important than the tax implications of a secret offshore bank account.

For example, your citizenship is very important. If you are a US citizen your options are more limited, as many offshore banks no longer accept US citizens as clients. Canadians or Australians for example will have fewer problems in this regard. But the traditional wisdom is that for the best level of privacy, choose a bank that does not have offices or branches in your home country.

If you are a citizen of a European Union country (including the United Kingdom of course) then the European Union Savings Tax Directive comes into play, and you might prefer to hold your offshore bank account in one of the tax-haven type banking countries that is not a signatory to this treaty. That rules out Switzerland, Andorra and the Cayman Islands for example – and brings into play other prominent financial capitals a little further afield, like Panama or Singapore.

But there are also other nuances to look out for besides citizenship and residency. What kind of services are you looking for? Do you want one with the best online trading technology or the one with the highest level of personal service? Generally, those two are polar opposites.  Traditional private banking is expensive. Whereas for online trading in the financial markets, maybe you don’t even need a bank account these days.

Most offshore banks offer debit and/or credit cards, and internet banking – two essentials for the modern expat bank account. But again from here, services vary widely. Will it be a Maestro ATM card or a an American Express Platinum? If you are mainly interested in cash withdrawals using an offshore card, then Maestro might be better. But other clients want the prestige and service level afforded to those Gold and Platinum level clients – not to mention perks like airline miles offered on HSBC’s Panama Platinum Mastercards (that can be very valuable if you are conducting serious business through your offshore company.)

Ultimately, then, there is no correct answer – the best offshore bank account for one person is completely different from the best account for somebody down the road. If you would like to read more about this, you will find 40 or so pages of easy to read advice in my Practical Offshore Banking Guide 2009. This report is available instantly for download in pdf format, and also includes contact details of ten offshore banks we can particularly recommend that are suitable for most of our readers.

The guide is FREE OF CHARGE if you are already a member of The Q Wealth Report. If you are not yet a member, you can sign up online right now for the price of a good lunch ($87 to be precise) and get instant access to this information, together with our no-quibble money back guarantee of satisfaction. Or, if you are not ready just yet but would like to stay in touch, sign up for our Q Bytes online newsletter and get a free five part course on offshore banking and asset protection.

by Peter Macfarlane for The Q Wealth Report

In this article: which Swiss banks still offer privacy, and which do not (like Credit Suisse). And where to find better wealth management services that are not subject to the same political pressure… in other words, private banking that really is private…

We’ve all heard a lot recently about the supposed downfall of banking privacy in Switzerland. I’ve personally been contacted by many clients of UBS who have been notified that their Swiss bank accounts are being closed because of the recent scandals in the US.  Many clients undoubtedly chose UBS thinking it was “too big to fail,” or maybe just because they had hundreds of sales reps in the USA, not realizing that UBS was also “too big and too exposed.”

UBS actually describes itself on its website as “one of the world’s leading financial firms”…  and therein lies the problem! It’s not really a Swiss bank at all… it’s a global bank just like JPMorgan or Citigroup.

I’m on record elsewhere as saying that Credit Suisse will have similar problems soon too. If your money is in Credit Suisse, you have been warned! It’s too easy for foreign governments to put pressure on big international banks to give up their secrets.

So what are you to do if you want to bank in Switzerland? For starters, you could go for either one of those ultra-discreet private banks. They are so discreet they don’t have websites, they don’t even have their names outside their offices. But they are certainly a dying breed. Besides, they are overrated in my view – charging enormous fees for service that as a sophisticated investor you probably don’t need or want. In the last few years many have been taken over by bigger banks like UBS and the large Swiss Private Bank Julius Baer.

A better option in my view would be one of the Swiss Cantonal banks. These are banks owned by Swiss local governments (cantons) which means they are both very strong, and very focused on their local markets. They are good for three reasons:

1. They don’t have too many overseas clients – that makes them less of a target in the first place for foreign governments.
2. They often don’t have any offices outside Switzerland – which makes it much harder to apply pressure on them
3. Being associated with the government gives them additional political clout.

Many little cantons have their own banks and the best way to open accounts with them is to get on a plane. If you feel like paying a sizeable fee for a referral, a company called Micheloud & Cie has made quite a business out of bank introductions and is currently busy promoting Cantonal Bank accounts. But remember membership of Q Wealth costs just $87 and our members do get FREE bank referrals – full details in our Practical Offshore Banking Guide 2009.

One of the bigger Cantonal banks, for example,  is Zuercher Kantonalbank, from Zurich. Here’s a link to ZKB’s Private Banking division, but the site is only in German. I’m sure they speak impeccable Englis – but not having English language publicity on the internet is undoubtedly  a calculated decision about the clientele they are seeking. You probably need a good local referral and a sizeable deposit to get in the door, but this is the kind of Swiss bank you should be looking for if your aims are privacy, class and good service at a fair price.

Many Swiss banks, of course, will no longer accept accounts from US or EU citizens at all. Who can blame them, given the recent pressures. In this case it may be necessary (and a darn site better privacy wise) to look for alternatives outside Switzerland. Neighboring Liechtenstein is no longer desirable, given that it is signing agreements with the US treasury and is working on a ‘swift agreement’ with UK tax authorities amongst others.

Austria is known as “where the Swiss go for private banking” and indeed Austrian banks have world class wealth management services. However, their membership of the European Union could be a problem. Austria is also a great place to buy gold bullion offshore.

Indeed I think to find real banking privacy today it is necessary to go further afield. Not so much to specific countries, but to banks that realise that jurisdictional arbitrage is one way to enhance their clients’ privacy. The modern boutique private bank will have highly qualified private bankers who are able to open accounts at subsdiary banks in several different jurisdictions. As an additional layer of both privacy and asset protection, offshore corporations and foundations are always a useful way of handling offshore accounts too.

I don’t have space to get further into ‘how to achieve real banking privacy’ here, but it’s the kind of thing we cover in our quarterly issues of The Q Wealth Report and at our events. You’ll also find the publications in our members’ section represent an excellent start, and I am happy to answer questions by e-mail on this topic from paid subscribers (sorry, but I just don’t have time to answer queries from people who have not signed up) Our next event is scheduled for Bantry, Ireland, so maybe you can make it? If you would like to be kept informed on such matters please take a moment to sign up to our free e-mail newsletter Q Bytes