bank investment products

[aster]

I wouldn't go with any bank "investment" scheme, period.

You can always do your own investments, and if you think bankers actually have a clue then why are they slaving it out in an office instead of sitting on their private yacht in the Bahamas? Plus don't they have monkeys throwing darts at a chart and picking better stocks to invest in than human experts?

[BillyB]

I wouldn't go with any bank "investment" scheme, period.

You can always do your own investments, and if you think bankers actually have a clue then why are they slaving it out in an office instead of sitting on their private yacht in the Bahamas? Plus don't they have monkeys throwing darts at a chart and picking better stocks to invest in than human experts?

Ha ha, interesting analogy!! I'll play devils advocate here - why would a Hedge Fund manager who is worth $50-250 million still work in an office when he has the capability to retire and go and buy and sit on his private yacht at any time? The same goes for private bankers who usually take a % of AUM as an annual management fee and if they have $500 million under management, then you do the maths of their yearly salary. The answer is probably a combination of passion for pushing themselves further and greed!!

I agree with you that some relationship managers at the local and even international banks are quite clueless and unethical and simply push or 'coerce' customers into the banks recommended schemes because they pay a decent commission even if they aren't in the best interests of the customer. But to to counteract this argument, you'll find that some of the collective investment products aren't accessible for individual investors as the costs of entry are too high unless you go through a bank platform.

I laughed at your theory on stockpicking though. Believe it or not, analysis has moved on somewhat from that stage, although the way some of the funds in Asia are looking, they might be better off using that approach!!

[Eau2011]

- Remember there is a ratio between risk and reward. If the suggested reward looks high, you can be sure that the risk is too. Do not be blinded by promises or dreams of easy big returns.

We are aware of this.

But during the financial crisis, we lost much money because of the shares. Now the share prices went up of cause, but still not that good than before the FC, as we all know.

[Eau2011]

They sound like gambling, and they sound very very high risk.

Yeah , I agree with you wholeheartedly. I know DBS will coerce client to joint this instrument. At least she gets a heads up from one of us.
At the end of the day , it is her call

Thanks, noted, no DCD.

[Eau2011]

I wouldn't go with any bank "investment" scheme, period.

You can always do your own investments, and if you think bankers actually have a clue then why are they slaving it out in an office instead of sitting on their private yacht in the Bahamas? Plus don't they have monkeys throwing darts at a chart and picking better stocks to invest in than human experts?

That's acutally my task in future besides being a housewife.

My own investments were only properties, there was a good time to buy properties in China. The price of properties was increased fourfold and more in 10 years time in those big cities (we called the primary cities, e.g. Beijing, Shanghai, Shenzhen etc., that's the case of my flat in Shanghai). And the secondary cities like the capitals of provinces are also experiencing the boom. (I also bought there). But the Chinese government realized this and passed the legislation to slow down the booming and constantly rising real easte prices. Especially for the foreign passport holders there is no chance to buy it anymore.

Besides some employee shares, I have no ideas about these funds, derivatives etc. My husband has his bank in Holland to manage the investment products because he got no time. He's not that risk-taking type. He's quite satisfied with the return.

Well, if I have to do my own investment, I guess I have to read and do the research a lot (I've learned finance during my uni time, but it was just one subject of many, and I did not use it in my life). Anyway, I got your guys to give me tips.

But as I said, if we transfer our money back to Europe, Germany asks us to pay 25% flat rate withholding tax for the return. And in Holland it is even worse, not only return, but also the capital itself every year. And I heard in SG people don't have to pay tax for that. Even though we've got now relatively weak Euros (good exchange rate), comparing with the tax we have to pay, we still choose to keep money here and do some investments.

Another question is, even if we left SG, can we still access to our money here? Also, I got to know that Singapore does not work with Europe in this case, e.g. they will not give any information of our bank accounts to Germany and Holland, not like Switzerland and Liechtenstein now, is that true?

[Eau2011]

I wouldn't go with any bank "investment" scheme, period.

You can always do your own investments, and if you think bankers actually have a clue then why are they slaving it out in an office instead of sitting on their private yacht in the Bahamas? Plus don't they have monkeys throwing darts at a chart and picking better stocks to invest in than human experts?

Ha ha, interesting analogy!! I'll play devils advocate here - why would a Hedge Fund manager who is worth $50-250 million still work in an office when he has the capability to retire and go and buy and sit on his private yacht at any time? The same goes for private bankers who usually take a % of AUM as an annual management fee and if they have $500 million under management, then you do the maths of their yearly salary. The answer is probably a combination of passion for pushing themselves further and greed!!
I do agree.

I agree with you that some relationship managers at the local and even international banks are quite clueless and unethical and simply push or 'coerce' customers into the banks recommended schemes because they pay a decent commission even if they aren't in the best interests of the customer. But to to counteract this argument, you'll find that some of the collective investment products aren't accessible for individual investors as the costs of entry are too high unless you go through a bank platform.

I laughed at your theory on stockpicking though. Believe it or not, analysis has moved on somewhat from that stage, although the way some of the funds in Asia are looking, they might be better off using that approach!!
I'd like to do it myself, I mean throwing the darts at a chart.

[JR8]

Another question is, even if we left SG, can we still access to our money here? Also, I got to know that Singapore does not work with Europe in this case, e.g. they will not give any information of our bank accounts to Germany and Holland, not like Switzerland and Liechtenstein now, is that true?

It is a good point about banking secrecy. I believe that SG is a 'non-disclosure' country, but that might have changed recently. Try googling on 'Singapore banking secrecy'.

In this respect the 'Switzerland of Asia' is on a par with Panama rather than Switzerland

I operate a SG bank a/c from Europe online. To access it that SMS me a passcode. It allowed me to change my address to Europe and my new mobile # so I imagine that if you do can everything you want online there should not be a problem.

I was looking at HSBC because of the global coverage that they have, and their competitive fees (and also because way back when I was involved in specifying their prototype online trading platform! Long story, I didn't even work for them). I don't need to be paying 'private bankers' when I know precisely what I want to do, and can do it myself online. I intend to invest in mostly low-fee stock index trackers (UK based investment funds) covering various geographic regions, as I reckon stock-picking is for experts or fools (little middle ground!). Then I am going to allocate another slice for high-yielding blue-chips with growth potential (yes, ok I admit this is stock-picking ). But companies like Vodafone yield (when I last checked) 5.6%. My UK bank account pays me 0.5% on deposits, inflation is 5.1%, that means the value of my bank cash deposits are shrinking at 4.6% per year!

I looked at Jersey as it is a tax-haven. I know there was pressure from the EU to get it and the Isle of Man and other havens to disclose data. I think I should check again that the UK (Jersey is UK overseas territory or something) did not buckle at the knee, and Jersey would report holdings to Germany and the rest of the EU. If it does it'll be an HSBC a/c in SG for me I expect!

[beppi]

I would never put money into something I don't truly and fully understand.
If I have the impression that even the advisor who tries to sell me such doesn't understand how it works, I change bank.
Unfortunately, Singaporean banks excel at convoluted and cross-linked investment vehicles - I suspect the only purpose of this is to hide potential risks from customers (they also don't tell you).

But as I said, if we transfer our money back to Europe, Germany asks us to pay 25% flat rate withholding tax for the return.

This is only for residents. If you live abroad, just send the documentation to your bank (German "Abmeldung", Singapore residence permit). They'll change your status to "Devisenauslaender" and that stops the 25% deduction.

[Eau2011]

I would never put money into something I don't truly and fully understand.
If I have the impression that even the advisor who tries to sell me such doesn't understand how it works, I change bank.
Unfortunately, Singaporean banks excel at convoluted and cross-linked investment vehicles - I suspect the only purpose of this is to hide potential risks from customers (they also don't tell you).

But as I said, if we transfer our money back to Europe, Germany asks us to pay 25% flat rate withholding tax for the return.

This is only for residents. If you live abroad, just send the documentation to your bank (German "Abmeldung", Singapore residence permit). They'll change your status to "Devisenauslaender" and that stops the 25% deduction.

Thank you beppi!

I googled it and found the definition of Divisenauslaender. But the problem is that we will go back to Europe one day, and we will be liable for taxation. The capital yield on our bank is still taxable, so it's better not to transfer money back to Europe at all.

To register as Divisenauslaender is surely great for those who emigrated to another country for rest of their lives.

[beppi]

I googled it and found the definition of Divisenauslaender. But the problem is that we will go back to Europe one day, and we will be liable for taxation. The capital yield on our bank is still taxable, so it's better not to transfer money back to Europe at all.

To register as Divisenauslaender is surely great for those who emigrated to another country for rest of their lives.

Your post is not correct:
There is no withholding tax in Germany on interest and capital gains accrued while you are Devisenauslaender.
When you return, you inform the bank and they will start deducting the 25% again from the day you are back, but there will be no tax on what you earned before, because that is taxable in Singapore (check with IRAS or read the taxation agreement).
In general (with many complicated exceptions) you pay tax where you live, regardless of where the money is paid.

[JR8]

All you seem to need Eau (and me too) is an offshore a/c (with trading capability attached) with banking secrecy.

[aster]

In the digital age, banking secrecy matters less and less as there is no communications secrecy. Even in the EU each country has to store all URLs accessed by every single user for a period of 6-24 mths. I think it would be fairly easy to see who's been logging into a foreign bank account, and I'm sure the German (or most other) authorities would have flagged all domains from offshore banks years ago...

IMO banking secrecy only makes sense if you never communicate with your bank from a distance but only deal in person, on the spot.

Personally I have nothing to hide as I live in Singapore, where there is no capital gains tax on individuals, and I can be open about everything. In your case I believe you can do the same if you are no longer resident in Germany (I'm not German so I'm not that familiar with the laws over there).

[Eau2011]

I googled it and found the definition of Divisenauslaender. But the problem is that we will go back to Europe one day, and we will be liable for taxation. The capital yield on our bank is still taxable, so it's better not to transfer money back to Europe at all.

To register as Divisenauslaender is surely great for those who emigrated to another country for rest of their lives.

Your post is not correct:
There is no withholding tax in Germany on interest and capital gains accrued while you are Devisenauslaender.
When you return, you inform the bank and they will start deducting the 25% again from the day you are back, but there will be no tax on what you earned before, because that is taxable in Singapore (check with IRAS or read the taxation agreement).
In general (with many complicated exceptions) you pay tax where you live, regardless of where the money is paid.

So you did not really understand me. I'm not talking about the past, but exactly from the day back to Europe.

I mean I don't even want to pay that 25% tax from the day back to D or NL. No high tax rate in Europe for me at all!

Capital gains are not taxable in SG, that's what I heard. Only for income you have to pay tax.

[Eau2011]

In the digital age, banking secrecy matters less and less as there is no communications secrecy. Even in the EU each country has to store all URLs accessed by every single user for a period of 6-24 mths. I think it would be fairly easy to see who's been logging into a foreign bank account, and I'm sure the German (or most other) authorities would have flagged all domains from offshore banks years ago...

IMO banking secrecy only makes sense if you never communicate with your bank from a distance but only deal in person, on the spot.

Personally I have nothing to hide as I live in Singapore, where there is no capital gains tax on individuals, and I can be open about everything. In your case I believe you can do the same if you are no longer resident in Germany (I'm not German so I'm not that familiar with the laws over there).

Difference is: One day we'll be back to Europe. We don't want to take the capital and gains back to Europe. Then we are liable for tax in D or NL, I don't want them to know our bank account and capital in SG.

You know, when it's about money, they are very creative.

[beppi]

So you did not really understand me. I'm not talking about the past, but exactly from the day back to Europe.

I mean I don't even want to pay that 25% tax from the day back to D or NL. No high tax rate in Europe for me at all!

Capital gains are not taxable in SG, that's what I heard. Only for income you have to pay tax.

From the day you're back, you have to declare and pay tax on capital gains and interest earned worldwide (read the tax laws and taxation agreements).
Not telling is illegal (and called "Steuerhinterziehung"). That others have done and gotten away with it does not guarantee you will, too.
But if I were you, I won't boast about such intentions on a public forum like this!