By GENEVIEVE CUA

ADVISERS to wealthy families are sceptical that client confidentiality will be maintained in the wake of pressure from the G-20 on offshore financial centres to share tax information. A survey by the Society of Trust and Estate Practitioners (Step) of 526 advisers worldwide has found that less than half of respondents disagreed with the statement 'Client confidentiality will be respected in the future.'

Step's director of policy Keith Johnston said: 'There are real concerns among clients that the G-20 attack on secrecy, designed to flush out a minority engaged in evasion, is threatening those who are totally tax compliant. Clients want their personal information to be better protected from corrupt institutions and careless governments. They want compliant confidentiality. The G-20 must answer questions about how personal information is safeguarded when it's exchanged across borders, especially to countries with suspect and leaky institutions.'

Step said that the issue the G-20 has failed to address is the degree to which national banking systems offer privacy to clients' legitimate and wholly compliant affairs.

The survey found that almost 70 per cent agreed with the statement 'Secrecy in offshore banking will die.' Asian respondents, however, were less likely to agree with this statement. The survey also found disagreement with a statement that Swiss private banking will thrive in the future. The majority also agreed that political pressure on offshore financial centres will continue. This was particularly so among respondents based in the Caribbean.

Respondents believed that clients will prefer independent trust advice over advice proffered by a bank-owned entity. 'Given that tax and estate planning professionals are an important conduit of business for offshore trust offices, the implications for the industry are an increasing fragmentation rather than consolidation of the trust administration landscape,' the survey said.

Singapore has just passed an amendment to its Income Tax Act to allow it to implement an internationally agreed standard for the exchange of information on tax matters. The Organisation for Economic Cooperation and Development had put Singapore on a 'grey' list that the group considered lax in sharing tax information with foreign tax jurisdictions.

Singapore has so far signed 11 agreements with foreign jurisdictions to incorporate OECD's exchange of information standards. It has also taken steps to prevent 'fishing expeditions' for information. Requests for information must be specific and detailed and will have to be filed in the High Court.

This article was first published in The Business Times.