November 30, 2012 6:51 pm

Wealth firms scramble to lure foreign clients

Wealth managers are rushing to set up tailored services for increasing numbers of foreign millionaires applying for investor visas to stay in the UK, with wealthy Russians leading the surge.

Collins Stewart Wealth Management is the latest company to offer the service, which it says can simplify the process, while ensuring that individuals remain compliant with the rules.

HSBC Global Asset Management, Barclays Wealth and a number of leading law firms in the UK also offer investor visa services to clients.

“More UK banks are switching on to the fact that they can attract new clients if they offer services designed to help wealthy individuals apply for these visas,” said James Badcock, head of the Geneva office at law firm Collyer Bristow. “These companies are putting together investment portfolios that satisfy the visa requirements.”

Symon Hawken, head of private clients at Collins Stewart, said: “There are some very specific constraints surrounding the criteria of investments that are eligible for this visa. A core part of our service is our relationship with law firms and willingness to interact with third parties on behalf of our clients.”

Investor visas were introduced in 2008 to encourage wealthy foreigners, with at least £1m to invest, to remain in the UK on a long-term basis. The tier one investor visa is granted on a points-based system designed by the UK Border Agency for individuals who want to make a substantial financial investment.

Take-up of the permits has rocketed since April 2011 when the rules were changed to encourage more applicants. Investors – and their immediate family members – can now get indefinite leave to remain in the UK more quickly.

To comply with the investor category of the visa requirements, applicants must invest £1m in the UK, or have personal assets worth £2m and take out a loan from a UK bank of £1m. The types of investment required are flexible, however, say experts.

Of the £1m minimum investment, £250,000 can be invested in property with the remaining £750,000 invested in a portfolio of shares, government bonds or gilts as well as holding some in cash.

For investors who don’t know where to put their money, investor visa services will recommend a range of investments to suit an individual’s risk profile. HSBC says that a typical portfolio would invest in some of the UK’s top 350 companies as well as holding corporate bonds including fixed, floating rate or index linked bonds.

However, not all companies on the FTSE are eligible investments under the scheme, as the company must be UK registered. Open-ended investment companies, investment trust companies or pooled investment vehicles are not allowed. Other investments not permitted include companies engaged in property investment, property management or property development.

Collins Stewart points out, however, that while investors are required to hold a minimum investment at all times, they are not required to maintain the same investment – and can choose to trade in the market.

For information on the UK Border Agency tier one investor points-based system, potential investors are told to examine the policy guidance at www.ukba. homeoffice.gov.uk.

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