News 6 May 2017

Wealth Preservation Is The Key To Continued Wealth Creation

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The Age Of The Great Handover Has Arrived


  • This is the most gilded age since the Gilded Age, with 5 percent of American households controlling 63 percent of the country’s wealth. Decades of stagnant income growth for the middle class contrasts with family dynasties such as the Waltons of Wal-Mart, wealthier than the poorest 40 percent of households combined. Some $59 trillion—the largest intergenerational transfer of wealth in U.S. history—will flow down from estates through 2061, according to Boston College’s Center on Wealth and Philanthropy


  • “By far the biggest handover ever to the next generation is about to happen,” PWC and UBS noted in a 2016 report on billionaires. “Without careful planning, many of today’s fortunes will suffer substantial erosion.”


  • UBS: Europe Leads In Protecting Wealth: Europe stands out as the home of multigenerational billionaires. While it may not be the best at creating great wealth, Europe has proved the best at keeping it. The region’s billionaire wealth remained broadly the same (with a small fall of 3%), at USD 1.3trn. Europe has the greatest number of multigenerational billionaires, and ranks a close second to the US for total multigenerational billionaire wealth


  • UBS: Asia’s One Billionaire Every Three Days: Led by China, Asia is creating one billionaire every three days. One hundred and thirteen Asian entrepreneurs attained billionaire status during the year, accounting for more than half (54%) of 2015’s global total. Young business- people are making money fast in technology, consumer & retail and real estate. The region’s billionaire wealth stood at USD 1.5trn, a slight fall on the previous year due largely to currency depreciation


  • UBS: Most of the world’s billionaires have made their money in the last 20 years, and now they are aging. In this time, billionaire wealth has grown by approximately seven times. So by far the biggest handover ever to the next generation is about to happen. We estimate that 460 of the billionaires in the markets we cover will pass USD 2.1trn, the same as India’s entire GDP in 2015, to the next generation over the coming 20 years


  • UBS: Billionaires Are Averaging 70 Years Old: Even billionaires grow old. One-third of billionaires in our data- base are more than 70 years old, while they hold 40% of the group’s total wealth. It is therefore reasonable to assume that they are in what we call the corridor of wealth transfer


  • UBS: The Great Critical Handover Has Begun: We expect this critical handover to have signicant implications. As great wealth trickles down the generations, its goals will change. We are already seeing the early stages of what we expect to be an upsurge in philanthropy. It is also likely that many heirs will be prepared for ownership rather than management – especially in emerging markets where entrepreneurs have often built complex conglomerates. One emerging markets billionaire told us that market dynamics and regulatory and political changes mean there is no guarantee his business will exist in 15 years’ time. Accordingly, he has no plans to burden his children with a duty to continue their father’s business, given its uncertain future


  • Blue Phoenix Financials: We Aim To “Break” The “Great Wealth Only Lasts For Three Generations” Curse: UBS: Billionaire wealth lasts less time than thought. While it is commonly held that the rst-generation wealthy make it and the third-generation break it, our research shows billionaire status to be short-lived. Self-made billionaires almost never have grandchildren who are also billionaires


What Do Interest Rate Increases In The US Mean For The World?


  • Interest rate increases by the U.S. Federal Reserve will cause the U.S. Dollar to climb further against Developed as well as Asian currencies, thus causing an erosion in the value of assets that are priced in these currencies


How Can Investors Prevent Their Wealth From Being Eroded?


  • Investors should start investing in instruments denominated in US Dollars in order to prevent their wealth from erosion as the US Dollar strengthens further


Which Instruments Can Investors Buy To Preserve Their Wealth For Future Generations?


  • The Universal Legacy Policy Is A Unique Concept Designed For High Networth Individuals As Well As Family Offices For Wealth Preservation In US Dollars While Earning A Yearly Guaranteed Yield (2.5%)


  • NOTE: This concept is NOT available from regular Insurance companies


What makes the Universal Legacy Policy Different From What Is Currently Available In The Market?


  • For High Networth Individuals Only: The Universal Legacy Policy Is Aimed At High Networth Individuals As Well As Corporates And Family Offices (Min Cover: US$3 million to US$5 million)


  • The Only Policy That Is Collateralized: Private Bank Gives 70% Loan To Buy The Policy


  • The Only Policy That Is Able To Fund By Itself: Through The Premium Financing + Portfolio Management Method, Policy Pays For Itself Throughout Your Lifetime And You Get A 100 Percent Loan To Buy The Policy (Min: US$5 million)


  • The Only Policy That Is Valid Till The Day You Pass On: Policy is Valid Throughout Your Lifetime Till The Day You Pass On


  • The Only Policy Where You Only Service Interest Till You Pass On: Only Interest On Loan Needs To Be Serviced, Not The Principal Amount


  • Guaranteed Yield In US Dollars: Policy Has An In-Built Guaranteed Yield Of 2.5% And Has Been Paying 4% Per Annum


  • 1:3 Payout Ratio: The Payout Ratio Is 1:3 and Principal Loan Amount Is Deducted Only When You Pass On


  • Policy Can Be Surrendered Anytime: The UL Policy can be surrendered anytime (Breakeven Rate: 9th Year) except that giving up the policy before the breakeven rate entails a surrender penalty (2%-3%)


  • Choice Of Top International Insurers: AIA, Manulife, SunTrust, Transamerica


  • Purchase Before The Next Fed Rate Hike To Lock In 2% Loan Interest: We urge Investors to Buy the UL Policy and lock in a loan interest rate of 2% for 12 months BEFORE the US Fed raises rates for the second time


  • Regulated By Monetary Policy of Singapore/Securities & Futures Commission of Hong Kong