60-second interview with Philip Marcovici

What does your firm or organisation do?

While I’m retired from practice, my firm consults with governments, financial institutions and global families in relation to tax, wealth management and other matters. I sit on selected boards within the wealth management industry, as well as on family succession and philanthropic boards and committees. I teach in the areas of taxation, wealth management and family governance. I run family retreats, and am involved in sophisticated family business governance and asset protection reviews, including holistic continuity audits.

I am a member of the Advisory Committee of the Hong Kong University of Science and Technology’s Tanoto Center for Asian Family Business and Entrepreneurship Studies and was a Founding Advisor to the 21st Century Family Business programme created by Cambridge Judge Business School Executive Education. I am a consultant to the CFA Institute on private wealth management matters and a co-author of readings on the subject for CFA candidates.

What has STEP done for you, individually, or as a business?

STEP has been a very important professional and personal platform for me, for many years. I have participated in STEP programmes around the world, both as an attendee and a speaker, and sit on its public policy committee. I have many friends and colleagues who are active STEP members, and meetings around the world (webinars these days, sadly) are a great way to catch up. STEP publications are informative and super platforms for communicating some of my ideas.

What is the most important thing STEP does, in your opinion?

For those starting out their careers in the trust and estate planning area, STEP is a massive accelerator. There are unlimited opportunities to develop cross-border skills, understand how the future of our profession is unfolding and, critically, to establish friendships and contacts globally. If I was just starting out, I would see active participation in STEP as a wonderful opportunity, and I think that this is the most important thing that STEP does.

You are on the panel of our Thought Leadership event, Wealth Taxes – the future of taxation in a post-COVID world on 23 October. Would you be able to give us a soundbite on what the main issues will be for the audience to take away?

Don’t miss it.

I believe that our role as advisors to global families requires that we help families navigate a world that is becoming increasingly risky, and that wealth and business owning families have responsibilities not only to themselves, but to all stakeholders, including the communities in which we live. Income and wealth inequality is a reality, and is a reason for the rise of populist governments, and more.

In the post-COVID world, governments will need to pay for the massive costs that have and are continuing to be borne - and there are political and other moves that will be challenging for wealth and business owners. Threats of capital levies, new wealth taxes and more are scaring business and wealth owners, and we will be discussing some of this. But to me, there is an urgent need for dialogue and understanding between wealth and business-owning families and governments – there are fairer ways for taxes to apply. I believe that current tax systems do not work in the context of global families with wealth; I believe that too many wealth owners can too easily navigate residence rules and basically opt in and out of paying tax. I also believe that headline tax rates are way too high, and tax systems often way too complex.

All this said, political risk, not only relating to COVID-19, is real, and global. And being a responsible wealth or business owner does not mean that you should expose yourself to these risks unnecessarily. There are many lessons to be learned from the past, and effective planning means hoping for the best and planning for the worst – and I will be sharing some protective strategies in our talk.

Why would you recommend that practitioners attend this event?

Clearly, any estate and trust practitioner needs to understand political risk and tax risks, and the discussion about wealth taxation is part of this picture. While we will be discussing how defensive planning can help protect wealth owners, I will also be emphasising our role as STEP members and our own responsibilities to society and our world.

Do you think wealth taxes are likely to be introduced in your jurisdiction?

My ‘jurisdiction’ is the world, and yes, there is every likelihood of increasing the focus on forms of wealth taxation in a number of places. And this, in my view will continue into the future, and is not necessarily a bad thing. But there will be cases where such taxes will be confiscatory, and a real political risk issue for business and wealth owners.

What effect would introducing wealth taxes have on people investing?

A capital levy is a form of wealth taxation, and it basically involves an expropriation of part of your assets. Clearly, if you lose some of your assets, you have less to invest.

A more important issue is the effect a wealth tax has on how wealth and business owners structure their holdings, where they live, and the citizenships they hold. The answers will be in our webinar.

• Philip is on the panel of our Thought Leadership web event Wealth Taxes – the future of taxation in a post-COVID world, on 23 October.

Philip Marcovici TEP is a graduate of Harvard Law School and of the law school of the University of Ottawa. He was admitted to practice in New York, England and Wales, Hong Kong and British Columbia, Canada (retired). The Offices of Philip Marcovici Limited is a UK company operating through a branch in Hong Kong.

Philip received the Citywealth Magic Circle Lifetime Achievement Award in 2009 and, jointly with Fritz Kaiser, the Wealth Management Innovator award in 2011 for his work in instigating the Liechtenstein Disclosure Facility. In 2010 Philip received the Russell Baker Award from Baker & McKenzie in appreciation for his exceptional contributions to the firm’s Global Tax Practice. In 2013, Philip received a Lifetime Achievement Award at the STEP Private Client Awards. In 2016, Philip received a Lifetime Achievement Award from WealthBriefing. Philip was selected as Top Adjunct Faculty for the academic year 2018/2019 by the Singapore Management University.

He is the author of The Destructive Power of Family Wealth published by John Wiley & Sons in 2016.