Fenergo, the leading provider of client onboarding, client due diligence and FATCA compliance solutions for the financial services industry, has been profiled as a case study in Datamonitor’s latest research report on FATCA regulations.
The report entitled, FATCA: Global Wealth Manager Responses, provides comprehensive analyses of wealth managers’ reactions to the Foreign Account Tax Compliance Act and features a case study of Coutts Private Bank and Fenergo’s approach to automating the FATCA compliance challenge.
The report outlines the various approaches being undertaken by leading wealth management firms and highlights the disparities that are taking place in the industry. According to its findings, 63% of wealth managers claim they will continue to onboard US clients in light of FATCA. This sentiment mirrors a similar finding in Fenergo’s latest research, The Road to FATCA, which points to 42% of foreign financial institutions claiming business as usual in terms of continuing to onboard US clients post-FATCA implementation. However, the same Fenergo survey indicates that 36% of FFIs expect to examine each client on a case-by-case basis to determine whether or not to do business with them, while a further 10% plan on terminating some US clients, 4% refusing to onboard any new US clients and 8% admitting they don’t know how FATCA will impact their institution’s onboarding of US clients.
According to Fiona Cummins, Fenergo FATCA Subject Matter Expert, “The financial services industry is facing a dilemma – to onboard or not to onboard US clients, to terminate or retain existing relationships with US clients. The most important take-away from this is to understand that terminating relationships with US persons or entities will not make an institution compliant with FATCA. They will still have to undergo the client identification, classification and, in some cases, self-certification (via W-8 forms) to determine if someone definitely is not a US client. So the obligation is always there – regardless of whether or not your institution does business with US clients.”
The Datamonitor report also points to a burgeoning niche market of wealth managers that are adopting an open arms approach to embracing US clients and FATCA, and points to the availability of self-certification portals for the collection and processing of US tax forms.
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