1. If you want to keep money abroad, without the government knowing about it, you can put it in a Swiss bank account.

For over a century, bank secrecy was anchored in Swiss legislation protecting the identities of customers who deposited funds into their accounts that were undeclared in their home countries (a.k.a. shvartz gelt). About three years ago, following pressure from the US government (and later, from the governments of other powerful economies, such as Germany and France as well as other countries that joined the bandwagon, including Israel), banks in Switzerland disclosed to those countries the names of nationals who held accounts with them. Many countries offered tax amnesty programs, which gave account holders a deadline by which to declare their assets and pay taxes on them without penalties or having to provide information about the source of the wealth.

2. High net worth individuals can suffice with allowing their bank to manage their assets.

Not quite. Banks have their own profit centers, so when they consider investment requirements, they find themselves having to balance the client’s needs with their own. Their investment advice and management can be influenced by various factors including internal bank politics, a desire to generate commissions or fees, and limitations in access to various financial products.
A family office is an institution employed in past generations by the nobility to preserve wealth so that it could be passed down from generation to generation. I founded the Toledo Capital AG multifamily office to provide external, third-party advisory services for asset management to help clients achieve their targets.

3. The new transparency laws around the world signal the end of the era of Switzerland serving as a global banking center.

After going through a tax amnesty process in their home countries, the majority of account holders have, in fact, left their money in their Swiss accounts. Moreover, they’ve continued depositing funds there, with new customers coming from across the globe, proving that Switzerland continues to play a starring role on the world stage of finance. Certainly, Switzerland’s political and economical stability are major reasons, as is the fact that Swiss banks are among the most secure in the world. No less potent a motivator, however, is the human factor: the unparalleled customer service and efficiency.

4. As long as you are organized like the Swiss, you can handle all your banking paperwork alone.

Banking correspondence is extremely complicated and difficult to decipher, even for the finance savvy. Our family office handles all banking correspondence related to the client’s portfolio, checking for mistaken bank fees, which, even in the Swiss precision banking culture, still occur with annoying frequency. Thus, every document is screened to ensure full transparency and to reduce unnecessary costs.

5. A family office is only for the very wealthy who can afford this luxury service.

A family office also works with middle-range investors, saving them the management and advisory fees charged by the bank, so that they pay only custodian and transaction fees. That means that for the same money (or less), the client receives the services of an independent financial advisor, for enhanced profitability due to access to products that the banks choose not to offer. Another major advantage we offer is consolidation; thus we labor with the knowledge of what has been invested where, for full and efficient diversification to achieve the desired target.

Originally featured in Mishpacha, Issue 756. Uri Krausz founded Toledo Capital AG in January 2011. A religious Swiss Jew who lived in Israel for long enough to master the language, he has worked in the Swiss banking system for over 20 years, including in managerial positions in the famed Credit Suisse and UBS banks. Toledo is regulated by FINMA, the Swiss financial market supervisory authority, and Krausz himself is a board member with Zwei Wealth Experts, independent consultants who provide an assessment and regulatory framework for asset managers.