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BFI Capital
March 16, 2021

Plan B Strategies in High Demand

At BFI we have seen a pronounced increase in our American clients’ interest for Plan B strategies – i.e., structures and investment strategies that afford an increased level of protection against the potential for turbulence and turmoil in the United States. While we don’t embrace an entirely pessimistic outlook ourselves, we can’t deny there’s a practical truth to the saying “it’s better to be safe than sorry”. Whatever your own expectations might be, this is certainly a good time to review your wealth protection plan.

Clearly, the concerns of wealthy American families and entrepreneurs have risen to a much higher level under the new Biden administration. Fears over government intrusion and overreach, ramped up wealth transfer policies and excessive taxation, and increasingly leftist and socialistic ideas entering the mainstream have all put millions of Americans on high alert.

Much has been said and written about the exodus of wealthy Americans from California or New York, moving to states that offer more business-friendly environments, as well as states with less red tape and taxation. This growing trend has led to a serious drain of capital and talent for several Democrat-governed states.

However, a similar but much less reported exodus is happening at the federal level. Never have more Americans left the country and renounced their US citizenship in order to find safer and greener pastures. This is powerfully reflected in the following chart on the increase in expatriations.

Expatriating HNWI Americans by year of publication in Expat List

Sources: Investment Migration Insider; US Treasury Department

America, built on the shoulders of immigrants from all over the world, has swayed in the direction of a nation that now risks the loss of its entrepreneurial spirit, innovation, and risk capital. The legendary American can-do spirit appears to be flickering, the “rags to riches” inspirational success stories seem to be in decline. There are widely-shared concerns that land of the free – molded by a tradition of self-determination, fortitude, resilience, responsibility, and individual sovereignty – could devolve into the land of blame, victimhood, and cradle-to-grave handouts by an all too powerful and intrusive centralist government.

These are scenarios that many Americans we are hearing from are factoring into their risk management assessments and increasingly actively planning ahead and preparing for it.

Being a Navy SEAL and sniper taught me all about risk management. Take away all the risk variables under your control and reduce it to an acceptable level. The same fundamentals apply in business. ~ Brandon Webb

From our Swiss perspective, we hope and pray that America finds its way back to its constitutionally enshrined values of individual sovereignty, respect for property rights, free markets and limited government. However, looking at some recent events and all the relevant developments of the last year, it is clear that the opposite direction could also easily prevail, at least for the foreseeable future.

Therefore, exploring and looking into a “Plan B” strategy that gives you options to protect your assets in an adverse scenario seems more and more warranted and highly advisable.

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