A ONE-STOP SHOP FOR WEALTH MANAGEMENT
Luxembourg’s wealth management industry has developed and matured alongside a diversified ecosystem of financial sector experts and service providers.
Wealth managers use their know-how to design personalised strategies to fit each client’s particular needs. They work with specialists in the banking sector, asset management and fund administration, life insurance and capital markets, providing value propositions to international institutional and private clients.
Historically, the families that we have managed were owners of significant industries who needed a place for the organisation of their private wealth. As the tendency of these ultra high-net-worth clients to have relatively complex and international needs was reinforced, we have had to adapt our activities to their expectations.
LUXEMBOURG LIFE INSURANCE
Luxembourg-based life insurance policies are a key part of many wealth management strategies and an effective tool for wealth planning. Life insurance contracts can be tailored to individual preferences and adapted to specific geographic locations. Policies can be purchased through banking groups, from major international insurance companies, or from specialised boutiques.
Subscribers have access to a range of tailor-made solutions. It is the only investment formula allowing a choice of a beneficiary or several beneficiaries in case of death, the capital transfer taking place outside the usual succession process.
Luxembourg has world-class expertise in cross-border funds catering to every strategy, from standard mass-market products to funds reserved for sophisticated clients. Whether the client wants a simple index tracker fund, or private equity investments in emerging markets mixed with hedging instruments, Luxembourg life insurers have the expertise to develop the right solution.
The success of Luxembourg life insurance in Europe is essentially based on the possibilities that it offers for tailor-made financial management and the legal security that is provided by the country. The Luxembourg life insurance policy offers substantial advantages when planning clients’ personal estate. From managing the succession and wealth planning needs of an internationally mobile family, to navigating the complexities of crossborder regulation, Luxembourg insurers offer tailored, sophisticated solutions to meet clients’ individual needs in accordance with the highest standards of compliance. Luxembourg’s protection regime for insurance policyholders, which is popularly known as the Triangle of Security, provides one of the strongest policy protection regimes in the world and is one of the major assets of a Luxembourg life insurance policy. The mastery of these different parameters is a specificity of Luxembourg insurers, who have been gradually building up their unique expertise in Europe since 1992.
Luxembourg’s long-standing political, economic and social stability makes it one of the safest places in the world in which to base assets. The insurance profession is governed by strict, EU-based regulations, to ensure that investments are safe. With a separate, dedicated regulator, the “Commissariat aux Assurances” (“CAA”), companies benefit from a sound legal and regulatory framework. Insurance companies must have sufficient own funds to cover full liabilities contracted on behalf of insured parties. Underlying assets must be deposited with a regulator-approved custodian bank, and these must be clearly segregated from other assets and held in separate accounts.
This mechanism is known as the ‘Triangle of Security’. Clients’ assets are legally separated from those of shareholders and creditors and the regulator monitor this on a quarterly basis. The ‘Super Privilege’ guarantee ensures that holders of insurance contracts have a preferential claim over all other creditors concerned in case of default by the insurance company.