Blevins Franks achieves 85% of target in six months

Blevins Franks, the wealth management group headquartered in Malta since 1998, is witnessing its best year in operation after achieving 85 per cent of its annual new target within six months, founding director David Franks told The Sunday Times.

With over €1 billion in assets under investment management, Blevins Franks is the largest trust company regulated in Malta.

The group has specialised in managing the wealth of British expatriates around the world, but is now looking to expand into the local market. This is to be spearheaded by four locally qualified Maltese private client managers, all of whom have been employed with Blevins Franks for over eight years after joining directly from the University of Malta.

"Our activity level is really high," Mr Franks said. "We have lots of business in the pipeline. This is going to be our biggest year yet. We did not anticipate it, and we are easily growing much faster than the market overall. Our growth derives from recommendations from existing clients, and from clients placing even more emphasis on careful tax planning - which is one of our strengths. They, in turn, are giving us more of their funds to manage."

He added that there has been a squeeze on smaller financial advisers in the market place, and at the same time a move away from larger impersonal institutions where the systems and staff keep changing. Clients were demanding more stability and continuity from their advisers and a high level of service and expert tax advice. "Our marketing has been stronger and our professional and qualified advisers deliver the goods," he said.

Blevins Franks has invested in training at every level. As Mr Franks put it, the firm was as good as the knowledge and competence of its staff: "Our best assets go home every night".

Blevins Franks was originally established in Sliema with a staff of 13 Maltese. It has just relocated its 85-strong team to state-of-the-art office space in Mrieħel.

With offices throughout the UK and Europe, the group provides tax advisory, investment, trust and corporate services to clients resident in France, Spain, Portugal, Cyprus, Hong Kong, Canada and Singapore, among others.

Besides its extensive marketing campaigns, Blevins Franks has published several books on the financial implications of living overseas, some in their seventh edition. It also holds over 70 seminars a year overseas and in the UK. The firm is planning seminars in Malta.

Blevins Franks has an international reputation for high quality advice, drawing together tax and succession issues, income requirements and investment management, including cross-border assets. Last year the group was appointed manager of the Wealth Expatriate Advisory Service on behalf of The Daily Telegraph.

Blevins Franks' mission is to help British residents fulfil their ambitions to move abroad; Mr Franks pointed out that 55 per cent of Britons have expressed a wish to live overseas. Moving to a new jurisdiction needs careful planning to avoid the various tax pitfalls, plan a sensible investment structure, and minimise tax liabilities legally. "There is no point in living in a tax haven unhappily," he explained.

Mr Franks conceded that tax rates were higher than they have ever been in most countries, and wealth was being eroded. If this age of austerity leads to massive inflation, it will hit savers and investments hard, he said. That is an issue for the next 10 years.

The crackdown on offshore bank accounts had also been beneficial to his business. Moves on Swiss and Liechtenstein bank accounts had led expatriates to turn to professional firms to bring their tax status in line.

Blevins Franks' clients are largely retired, but the company has seen the average age of its clients reduce as they retire earlier or relocate to work remotely thanks to cheaper travel and the use of e-mail, mobile phones, and VOIP. With improved education and health care standards abroad, British professionals are keen to move young families to milder climates. Many are even choosing to semi-retire overseas.

Britain's rising taxes have encouraged the move from the UK. Mr Franks believes the new coalition government has now set itself a hard task confronting issues long "ignored" by the previous Labour government, and he is impressed by the level of consensus between the Conservatives and the Liberal Democrats. One issue that had been set aside so far by the coalition was the Tory pledge to reduce inheritance tax.

He is not impressed, however, with the situation in the eurozone: he had predicted when the euro was launched that the new currency would struggle unless Europe largely had a political union. Mr Franks believes the eurozone in its current form may not survive, though this does not mean the end of the euro but rather the spinning out of weaker economies back to their own currency.

"I have always thought the euro would struggle," he insisted. "Europeans may never have a full political union. The major powers will continue to bail out the weaker countries in the short term but it will not do so forever. You cannot persuade German voters who save prudently, then to have to subsidise the early retirement of Greek public sector employees, for example, or to have to bail out Spanish banks that have made irrecoverable loans to their home-grown property bubble."

He said a number of countries have weak tax collection systems, leaving tax evasion and corruption rife. There may come a point, he predicted, when the weaker economies may decide that the pain of remaining within the euro is less than the problem of reverting to a new currency enabling them to devalue into their new currency: the classic economic solution to this type of problem.

One question facing British expatriates living in the eurozone is which currency should they hold their investments in? Hedging - holding assets and investments in the same currency as your spend - has been the traditional way to protect one's wealth from currency gyrations, but it might not protect from inflation.

As sterling fell against the euro in 2009 in particular, British expatriates on a fixed sterling income struggled to maintain their living standards, resulting in a large number selling up and returning to live in the UK. Wealthier expatriates were less affected, especially as they usually have a well diversified investment and currency portfolio.

As Blevins Franks' clients were investors rather than borrowers, the current low real interest rates have been unwelcome to the saver, as inflation can outstrip bank interest returns, but is a boon for the borrower. One of Mr Franks' concerns is the possibility that weaker economies might choose to inflate their way out of their deficits and usher in interest rate hikes, while devaluing their currencies where they can.

The uncertainty has led clients to need more advice and guidance to protect their wealth. But it does not stop at money matters: clients also have other things on their minds - wills, succession issues, protection of heirs, complications arising over second marriages, grandchildren's education, business and asset disposal planning, among others.

Ultimately, Mr Franks pointed out, the group's clients are looking for peace of mind knowing they have secured their future and done their best to provide for their children and grandchildren.