By Stuart Parkinson, chief executive of Lombard International Group
We live in a globally connected world, studying, living, working and investing across different countries and continents. We are on a constant journey, and so is our wealth, which can often circumnavigate major financial hubs through the most appropriate international wealth corridors.
Whilst the concept of wealth corridors may seem new, they have actually been utilised for centuries. The concept has now been vastly modernised – utilised by wealthy individuals and their families who are becoming increasingly more global and diversified in their lifestyles and investment choices.
High net worth individuals (HNWI) have de facto international lives, often with hyper-flexible family units that disperse globally. Recent research shows that the global number of migrating HNWIs has risen 14 percent in recent years, a trend that is only set to continue, not least spurred on by the pandemic and geopolitical volatility. It is also not uncommon for HNWIs to diversify their financial interests across multiple geographical regions of the world, or for their children to study in several different countries to their familial home.
Many may then choose to become resident in a third country as a result of marriage or work. In addition, it is not unusual for people to marry more than once, which could again mean settling elsewhere with a second family, adding potential complexities to manage. Such scenarios require a suitably multi-jurisdictional and flexible approach to financial and wealth planning.
An essential enabler of global wealth connectivity
Structural trends affect HNWIs long-term investment decisions as well as shaping their global asset allocation strategy. Over decades, such requirements have helped establish preferred financial corridors that enable the management of their wealth efficiently and compliantly, while providing security and accessibility to their assets.
These ‘wealth corridors’ facilitate lifestyles and investments across individual’s preferred geographies, jurisdictions and investment preferences. They directly correlate to the robust legal and regulatory frameworks that follow global trends and facilitate HNWIs’ global movements. These individuals require robust, long-term planning solutions that help grow and protect their wealth for future generations with succession and inheritance as their top priorities . As they look to succeed in meeting these needs, they shape their families’ lifestyle and wealth allocation strategies across the globe, using their preferred country of residence and related corridors.
The EU is a good example of this as many of its members facilitate residence or citizenship by inves...