The People Have Spoken
Thank you to all who attended our virtual 2020 annual conference. Our speakers were simply phenomenal and received the highest marks from our attendees. Feel free to review the talks on our website.
Election officials, workers, and voters heroically showed the civic backbone at the heart of our democracy. Our country, all of us, should be very proud of this tremendous achievement.
The Elections of 2020 appear to have come off without any significant hitches, and in good order. In a year in which a global pandemic forced county officials and state legislatures nationwide to provide voters with multiple ways to vote, election officials, workers, and voters heroically showed the civic backbone at the heart of our democracy by casting votes in record numbers both in person and by mail, and both before and on Election Day. Our country, all of us, should be very proud of this tremendous achievement.
Stock markets reacted extremely positively to the successful elections during election week:
With votes still to be counted, President Donald Trump and the Republican Party generally, to the great surprise of many given pre-election polls, significantly outperformed expectations. Republicans gained ground in the House of Representatives (the most representative of our government bodies), and appear to have, at least for now, held onto the Senate. In January, the extraordinary spectacle of two Georgia Senatorial elections, one a special election and the other a runoff, will take place for control of the US Senate and therefore of the entire US federal government. Nevertheless, the President has lost re-election, and the Trump presidency will therefore come to an end on January 20. Joseph Biden will be the next President, and the United States will have its first woman, Kamala Harris, as Vice-President.
What outgoing President Donald Trump will say and do between now and then is not known (he himself may not know). But on November 5, the sitting American President shockingly cast aspersions on the nation’s election officials and workers and on all American voters by declaring publicly on camera - and without a shred of evidence - that we are stealing the election from him. In so doing, he implied that the sacred act of honestly casting our votes, and the sacred oaths of those sworn to honestly count those honest votes, are nothing more than crimes against him. As the New York Times reports, the President continues to be convincing with some, perhaps many, of his supporters:
As the parents of two teenagers, Hannah and I have worked assiduously, along with wonderful teachers and coaches, to teach our children to be civil competitors and to accept both victory and defeat in a fair and umpired game with equanimity. My hope is that those close to the President will similarly and quickly coach and teach him. They should advise him to be gracious, to facilitate a transition to his successor, and to attend Joe Biden’s inauguration with decorum and civility.
And then they should advise him (as I would if were his advisor) to retire quietly to the golf course. Everyone in this nation needs to begin to heal their many accumulated wounds, so that, among many other rights and freedoms, all Americans may cast their votes without fear of being labeled as “criminals” by their President or by their fellow Americans.
Over the past four years, a number of clients - of various political persuasions I might add - have met with me and conveyed their private fears that the state of the United States is so concerning that they are exploring alternative careers and places to live both within and outside the United States, or are simply unnerved and concerned about the future.
Many will now be tempted to interpret a Biden victory as meaning the coast is clear, many others that the situation is now exacerbated. Regardless, all can agree that extraordinary challenges remain. If the current political situation in the United States teaches anything, it is that even this country is not immune from corrosive political dynamics leading to national instability. Accordingly, New Capital is in the early stages of exploring optional Swiss custody for our clients.
Switzerland has a long, famous, and highly accomplished professional banking history, dedicated to protecting the privacy and ownership of its account holders, and dating back to the early 1700’s. Switzerland itself sits in the heart of Europe and has for centuries represented a bastion of independent political and economic stability, including during World War II. New Capital is currently in talks with a mid-size Swiss banking institution with a sterling reputation and a new program to expand its business to clients of American registered investment advisors like New Capital.
This offering may (but also may not) be attractive to New Capital clients because:
We could trade and hold the same assets and portfolios for you as we currently do at Fidelity and other US custodians, so you would experience no disruption of our services. New Capital would continue to manage your portfolio and be your primary point of contact for all of your needs, including assets held in Switzerland.
We could maintain your existing Fidelity (or other US custodian) accounts, giving you the choice of how much to keep in either country. For example, if things got “ugly” (however you personally define that) in the US you could direct us to simply move some assets to your Swiss accounts. Conversely, if things got “calm” (again, however you personally define that) you could direct us to move assets back. Asset transfers will be a trivial administrative matter that we will handle for our clients with your signed directives.
Your Swiss accounts would provide full 1099 reporting for US tax purposes, and you would be completely compliant with all US tax laws. Just as you receive an annual 1099 from Fidelity, you would receive an additional one from our Swiss bank. Note: Several years ago, some Swiss banks (most notably UBS) experienced some tarnish on their reputations as US and other nationals took advantage of Swiss privacy laws to hide their wealth there from tax authorities. With disclosure reforms, those issues have all been completely resolved, and Swiss banks now report to US tax authorities just as US banks do.
Your Swiss accounts would provide you with additional elements of asset protection from US creditors, plaintiffs, or others who might seek to lay claim to your assets.
Your Swiss accounts may afford you additional banking access in other international locations (for example, Latin America, Asia, etc.).
I do not want to waste anyone’s time - either mine or our Swiss bank’s - if our clients do not have interest, and to be clear I do not expect this offering to be either of interest or necessary for most clients. Therefore, if you do have interest, it would help me enormously if you would complete this short form:
Four years ago, I had never felt any need to explore extra-national custody of US client assets. But my view has now changed, and as your fiduciary advisor, I have an obligation to ensure that your assets are not only diversified by investment, but that, if you want, you also have a choice of jurisdictional diversification.
As the final election votes are tallied and the results become known, and as the Senate elections in Georgia take focus, may all of us commit ourselves to decorous competition and gracious acceptance of the results. Then, perhaps, there would be no need or desire for Swiss custody.
Leonard Golub, CFA
Fiduciary Financial Advisor
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