The Banking For Impact (BFI) consortium will measure the environmental impact of their activities in a bid to increase impact management and reduce deficiencies of their current assessments of the sector’s non-financial performance.
On Wednesday, the BFI released its four-step agreement. The agreement seeks to quantify, value, attribute, and aggregate to encompass the full extent of environmental and social impact along each financial institutions’ value chain. Members of the BFI include Swiss investment bank UBS, Danish Bank Danske Bank, Dutch bank ABN AMRO, the Harvard Business School, and the Impact Institute.
The group has said that financial firms need to first quantify impacts in order to measure, manage, and report different impacts in a consistent way. It has stressed that some impacts are easy to measure, such as the amount of CO2 emissions produced, whilst others are much more difficult. Following such calculations, impacts then need to be translated into monetary values, allowing them to be evaluated in relative terms. Valuation will show whether the pros outweigh the cons.
The BFI has also stated that there should be a clear attribution approach for deciding exactly how much impact ought to be attributed to each financial company. For many financial institutions, the majority of their impact is indirect, but the BFI has insisted that firms still hold part of the responsibility for indirect impact. All relevant and helpful information will be combined and used for comparison and decision-making.
BFI’s long-term goal is to push sustainability forward in the financial sector. It hopes to have an open-source, standardised impact measurement and valuation method that is widely utilised across different financial companies. BFI is set to release a procedure for banks later this year.
Henny Woon Loong is the Chief Trust Officer for Wealth Planning in DBS Private Banking. He has oversight of all existing trust client relationships, as well as trust policies, documentation, pricing, product development and business acceptance. Henny heads the Wealth Planning team in Singapore, which provides personal trust, estate planning and liquidity planning services to clients of DBS Private Banking and DBS Treasures Private Bank. Here he tells Finance Monthly more about it.
What more can you tell us about DSB Private Banking – what are the company’s history, mission and values?
DBS Private Bank is a unit of DBS Bank, a leading financial services group in Asia, headquartered and listed in Singapore. The bank's capital position, as well as "AA-" and "Aa1" credit ratings, are among the highest in Asia-Pacific. We’ve been named the Safest Bank in Asia for seven consecutive years by Global Finance.
Our deep knowledge of the region, complemented by an extensive Asian network across 18 markets, and an open architecture platform, allow us to offer innovative Asia-centric solutions and services to meet the needs of our clients, both at a personal and corporate level. Our recent acquisition of Société Générale’s and ANZ’s private banking businesses in Asia, has significantly increased the scale of our wealth management business globally and expanded our suite of products and services to better serve our clients’ needs.
In DBS, we take a holistic approach to private banking. Growing our clients’ wealth is important. But so is protecting that wealth when our clients transfer their wealth to the next generation. This is what we call Wealth Planning.
What are the different types of Trusts in Singapore, and how can they be beneficial? What are the best options for protecting assets and wealth from political, social, economic or personal uncertainty? How can tax liabilities in Singapore be planned for and dealt with efficiently to mitigate their impact?
Singapore is a reputable international trust centre. Trust companies here are licensed and supervised by the Monetary Authority of Singapore (“MAS”). The judiciary in Singapore is highly respected and the industry is supported by legal, tax, and financial services firms, both home-grown and international. Our trust law, built on well-established English legal principles, was modernised in 2004. In Singapore, discretionary trusts with investment powers reserved to settlors are very common. These trusts may be revocable or irrevocable, depending on the clients’ objectives.
To provide a conducive environment to foster the growth of wealth management, qualifying trusts administered in Singapore are able to utilise a number of tax incentive schemes. Before these schemes sunset on 31st March 2019, MAS will conduct a review to assess their usefulness and relevance.
What are the typical challenges that clients approach you with in relation to the management of their finance and trust planning? What challenges are often faced where trusts are concerned?
Trusts are a core element of many wealth plans. Families have used trusts for centuries to preserve their wealth and make long-term financial provisions for their heirs. This basic need for succession planning has not gone away, and indeed may be even more critical in today’s dynamic environment.
5 or 10 years ago, perhaps the single biggest concern for many clients about using trusts was the loss of control. What has changed since is a heightened awareness of tax amongst our clients. As you know, the financial world is today characterised by increasing transparency, encapsulated in the now-familiar alphabet soup of FATCA, CRS and AEOI.
What makes DBS Private Banking’s Wealth Planning departments unique?
Wealth planning is more than simply a conversation about trusts. Indeed in some cases, a trust is not necessary or even advisable. It all depends on each client’s circumstances and objectives. To take an example, trusts may not work for some European clients and alternative structures such as insurance may be more appropriate. In DBS, the wealth planners are not the sales force for our trust company; our job is not to sell trusts. We are very clear that our role is to make sure that our clients get the right advice.
So our wealth planners engage our clients on wider issues that may affect intergenerational transfers of wealth. We are working with many clients to set up single family offices, primarily to ensure there is continuing professional management of their investments after their lifetime. We also find an increasing number of clients who want to make charitable and philanthropic objectives as a key family value, maybe even the key family value, that they want to instil in their descendants. Our clients are also keen to address foreign taxes that apply to their overseas investments, as well as family members who move outside their home country. At the end of the day, every client has different needs and objectives.
Website: https://www.dbs.com
Email: hennyliow@dbs.com
