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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 “consulting fees” to intermediaries.

The reality these days, however, is that opening true private accounts just by walking in off the street (or off the internet) has become very difficult. Banks are running scared of governments and regulators. It is estimated that opening an offshore bank account requires at least five hours of a senior employee’s time on the bank’s side. Time is money, and when it comes to highly paid bank officers in offshore jurisdictions, all the more so! So banks do take applications more seriously and 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 if 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 Yourself” or CYA for short, and is an important motivation behind KYC or “Know Your Customer” policies.

Of course, professionals don’t work for free – especially knowing that they are taking that kind of risk. That’s why bank introduction services command high fees these days, especially when taken in isolation.

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. You can ask an intermediary theoretical questions that you might well not want to ask an unknown banker directly for fear that the banker might be obliged to file a Suspicious Activity Report. The intermediary is your personal confidant.

There are, of course, good intermediaries and bad ones. An advantage of going through a good, reputable consultant is that they will also have done due diligence on the 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, talked to senior management there, studied their annual report in depth, and 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.

But the bottom line is you do not need an intermediary to open an account. You can make direct contact with certain banks specifying that you wish to set up an account and asking about the correct forms and procedures. Be prepared, however, for some toing and froing. If this is your first time opening an offshore account you might be surprised at some of the documents the bank requests of you!

How An Offshore Banking Expert Can Help You

A good professional intermediary will review your requirements, recommend the most suitable bank to you, help you put together the complete file of documentation required, and then introduce you to the bank. The introduction will consist of either setting up a personal meeting, or arranging the whole account opening process by e-mail and post. All information will be held in the strictest confidence, and will be destroyed once the account is opened. Always ask about the security aspects if you are thinking of making use of such a service.

The bank introduction fees are typically quoted assuming your requirements are normal. Your chosen consultant will however need to pass on to you any out-of-pocket expenses he must incur on your behalf. Typical examples are notary and apostille fees, certified copies, express courier fees and so on. These fees if any should be notified and agreed in advance.

Banks also typically charge fees for their services. Some charge for account opening, some don’t. Some charge for internet banking, some don’t. All banks make charges for issuing plastic cards, for sending documents by registered mail or courier etc, and most also charge a fee for account closure. These costs are of course also responsibility of the client and should either be paid up front or can be deducted from the account once it is opened, depending on the individual bank’s policy.

Author: Peter Macfarlane
Article Source: EzineArticles.com
Provided by: Bumper guardian