Investec Bank has launched a dollar-based, offshore account, which its says provide convenience for financial advisers to manage their clients\u2019 offshore cash investments.<\/p>\n
Investec said that financial services providers are seeing increased demand for an international offering from clients who see themselves as \u201cglobal citizens\u201d.<\/p>\n
Globalisation could also result in increasing offshore obligations \u2013 international education or mortgage repayments on an offshore property are two typical examples. A<\/p>\n
clear driver of these is the imperative among investors to have a globally diversified investment portfolio.<\/p>\n
Tertia Jacobs, economist at Investec, said emerging market currencies such as the rand are exposed to a wide range of dynamics, including international capital flows.<\/p>\n
The ebb and flow of capital can cause considerable volatility in the rand, leading to periods of over- or undervaluation and sudden reversals, as has recently been the case with the rand\/dollar exchange rate.<\/p>\n
According to Rene Grobler, head of Investec Cash Investments at Investec Bank, one option is to facilitate offshore payments or investments to open an offshore bank account to manage and settle clients\u2019 investment and other transactions.<\/p>\n
But this presents its own difficulties and can be an expensive exercise. Banks in other countries will often have onerous requirements for non-residents, with added charges. A foreign institution also brings with it an added level of administration for adviser and client alike,\u201d she said.<\/p>\n
Investec Bank has created the Corporate Cash Manager (CCM) US dollar (USD) Notice Deposit, a 32-day notice deposit account that allows financial advisers to manage their clients\u2019 offshore cash flow requirements in a simple and seamless way.<\/p>\n
\u201cThis is the first time that financial advisers will be able to open, manage and facilitate clients\u2019 offshore funds through a foreign currency account with CCM.<\/p>\n
There is no minimum balance requirement, though no interest is earned on balances below $10 000. Above that amount, a competitive interest rate is earned. There are also no fees attached to the account, apart from transaction and foreign exchange charges, Investec said.<\/p>\n