A versatile tool for uncertain times

Today’s world is challenging. Asset managers have less time face-to-face with their clients and are servicing them digitally. Regulations require more transparency. And growing geopolitical and macro-economic uncertainty threatens to spark higher market volatility.

In this ‘new normal’, global high-net-worth individuals and their families are seeking tailored solutions that are simple to implement, comprehensive and highly flexible. The desired result? Long-term efficient and diversified investment portfolios with an adequate level of protection, as well as a well-defined long-term vision backed by a clear strategy. 

As asset managers know, there are no silver bullets, yet perhaps it’s time to look beyond the obvious. To consider strategies and wealth solutions that are less traditional but which could deliver tangible long-term benefits.

That could mean taking a closer look at unit-linked life insurance for the following five reasons:

Further diversify client investment portfolios
Unit-linked life insurance enables easier access to a wide range of asset classes, including non-traditional assets such as private equity, private debt or real estate. Integrating these into more traditional investment portfolios provides wider diversification and potentially better long-term performance. 

Increase return on assets
Unit-linked life insurance policies can enable asset managers to attract a greater share of the client’s wallet to be structured within the same solution. Moreover, pure player unit-linked providers focus just on wealth structuring, allowing asset managers to enhance their advisory and discretionary mandates, and other relevant relationships.

Simplify reporting and improve operational efficiency 
Tax reporting of a unit-linked life insurance policy is done by the insurance provider, therefore reducing the operational and regulatory burden of the policyholder. Moreover, the insurance provider’s digital servicing platforms and API integration simplifies new client onboarding and management. 

Facilitate client access, across more markets
While travelling is currently limited, unit-linked life insurance providers use secure and compliant e-signature tools to onboard clients residing in Europe remotely. This can also be offered in other regions.

Deepen client relationship and safeguard revenue streams for the long term
In principle, wealth structuring using unit-linked life insurance secures a long-term relationship between the client, insurer, asset manager and the bank, as the client’s policy is supported by active management and ongoing servicing. Asset managers benefit from the long-term nature of unit-linked life insurance – growing the assets, offering more services and building new relationships with future generations of their clients’ families. Should a client decide to relocate, even to the US, the asset manager can still manage the portfolio within the policy. This is because unit-linked life insurance solutions benefit are highly portable, across many countries.

For further information and practical case studies, please contact:

Dr. Andreas Svoboda, LL.M. FCCA
Managing Director Senior Advisor
Head of Proposition & Provider Management
Wealth Planning

T +41 58 886 2446
andreas.svoboda@juliusbaer.com