Do you need an intermediary or eligible bank introducer to open an Offshore Account?

If you search on Google, “bank introductions” have become quite an industry these days. Dr W.G. Hill, a famous offshore guru back in the 1980s, once wrote sarcastically about this that he “would be happy to sell introductions to Sears and Roebuck.” For our British readers, that might be more like offering to sell introductions to Marks and Sparks.

The point, of course, is that in theory – to this day – you can just walk in to a bank, or even contact them over the internet, and open your account directly. No need to pay any “offshore consulting fees” to intermediaries and professional offshore incorporation specialists.

The reality these days, however, is that opening true private offshore bank accounts just by walking in off the street (or off the internet) has become very difficult. Banks are running scared of governments and regulators. They feel more comfortable with an introduction from a professional who is known to them, such as a lawyer, accountant or company formation agent.

The banks particularly like these introductions because then if anything goes wrong – for example, the client turns out to be a criminal – the bank can pass the buck to the professional who made the introduction. It’s called “Cover Your Ass” or CYA for short, and is an important motivation behind KYC or “Know Your Customer”.

Of course, professionals don’t work for free – especially knowing that they are taking that kind of risk.

Probably the biggest advantage of going through a good financial intermediary is the time-saving aspect. Time is money. The professionals are already familiar with how the banks work – not just the written rules, but the unwritten ones too which are equally important. You can ask an intermediary theoretical questions that you might well not want to ask an unknown banker directly for fear that the banker would feel obliged to file a Suspicious Activity Report. The intermediary is your personal confidant.

There are, of course, good offshore banking intermediaries and bad ones. An advantage of going through a good, reputable offshore consultant is that they will also have done due diligence on the offshore banks first. To give you an example, I never ever recommend a bank to a client if I have not sat in the bank’s offices, opened an account for myself, talked to senior management there, studied their annual report in depth, and last but not least used my gut feeling to test them out. Fortunately after so many years flying around the world visiting banks, my gut feeling is quite well honed.

The bottom line is you do not need an intermediary to open an account . You can make direct contact with the banks listed in Q Wealth Report Member’s Area, or other banks, specifying that you are a Q Wealth Report member, and that already serves as some form of introduction. Be prepared, however, for some toing and froing. If this is your first time opening an offshore bank account you might be surprised at some of the documents the bank requests of you.

There is a third option, however: as a Q Wealth client, you are entitled to use a free bank introduction service… this offers you the best of both worlds. Google “Q Wealth Report” to Read Practical Offshore Banking Guide 2011 and forthcoming years guides.