|The Bahamas Investor Magazine
September 1, 2019
September 1, 2019
The Bahamas Investor staff
For decades, Bahamian professionals served the wealthy and their wealth managers, laying the reputational foundation and building blocks of The Bahamas as one of the world’s leading financial services jurisdictions.
Yet even as they helped create asset management plans, worked in trading rooms and designed institutional, as well as individual, trusts they had limited opportunities for investment themselves outside The Bahamas.
All that changed with one dramatic move in 2018 when The Central Bank of The Bahamas, the monetary governing body, further relaxed foreign exchange regulations, which had been gradually easing Bahamians’ ability to transfer limited funds for several years. The latest step was a long forward leap in liberalization and as of the second quarter of 2018, Bahamians could not only take up to $10,000 in cash for personal reasons when travelling abroad, but they could now invest in global markets, taking the same risks, enjoying the same opportunities as those they had helped for half a century or more.
“It was a milestone in the life of Bahamian financial culture, democratizing the economy in a historic way,” says Christine Russell, chief executive officer, Cornèr Bank (Overseas) Ltd. “It opened the doors for Bahamians to enjoy greater opportunities for investment than ever before. For the first time, people of ordinary means would have the right to participate in world markets. No longer are we just consumers, we can be owners.”
Ready for change
If suddenly Bahamians were being allowed to seek a piece of the global economic pie without paying prohibitively high repatriation fees, entities had to be ready to serve that public, and it was little surprise that Cornèr Bank was prepared. With a more than 23-year presence in The Bahamas and two locations to serve east and west clients in New Providence, along with its parent bank’s reputation in Switzerland for financial soundness, Cornèr spent two years prepping for the day when Bahamians, many of whom worked in their offices, would enjoy the privileges that their offshore clients and other residents did.
The bank launched its Cornèrtrader platform in September 2018, inviting 100+ guests to a cocktail reception at the Baha Mar Convention Center where there was a live demonstration of trading with the Cornèrtrader online trading platform.
“There was a sense of excitement as Bahamians who understood the power of global markets got the opportunity to experience it in real time,” says Russell.
The introduction of global trading for Bahamians was fortuitous in several respects. Firstly, it coincided with an overall improvement in the economy. Housing sales were up, property values were rebounding following the slow recovery from a global recession a decade earlier and employment rates except among young males was trending upward. In Grand Bahama also, there were signs of economic revival.
Secondly, a growing younger population meant more potential clients possessed the confidence independent trading takes, though Cornèr would later introduce an advisory product as a bridge to assist with the confidence gap.
All said, the economic climate was right for a new trading platform. “We are passionate about what Cornèrtrader can offer; its ability to provide access to a wide variety of trading products, real-time news/analysis, watch list capabilities and, most of all, its portability,” Cornèr Bank chairman Luca Salzborn said at the launch. “Cornèrtrader is a flexible portfolio management tool, allowing the user to trade at home or on the beach, while providing the opportunity to prudently build a diversified, multi-asset portfolio. We are committed to offering to all our existing and prospective clients’ continuous education with seminars or one-to-one meetings about markets and the use of our platform as we believe that a key element for successful investing lies in mastering, the technical and financial aspects that go with it.”
Local access to international markets was not completely foreign to Bahamians. Local brokerage houses continue to offer mutual funds that include some percentage of international investments. The difference is that the investor does not have the opportunity to make his or her choice as to what to invest in.
The introduction of the new platform changed this, allowing the investor to pick and choose and trade as often as they like, 24/7 and fully independently once they open an account with the bank.
Although clients have the freedom to invest through any of the major world stock exchanges, most have stuck close to home, favouring the New York Stock Exchange, at least in the eight months since the launch, according to Cornèr Bank.
Reception to the opportunity “exceeded all expectation,” says Russell. “We knew there would be a lot of interest because people had been asking for the right to invest in global markets for a long time.
But old habits are hard to break and going independent, deciding on your own where to place your money and your trust, was not something that Bahamians had experienced before. We thought the initial activity would involve a lot of queries and account openings would slowly follow. We believe the success with which this has been met is an indication of the sophistication of the Bahamian population and the desire to be part of a wider world of investment.”
But not everyone was confident enough to tackle investing on their own despite the wealth of educational material and up to the minute data on companies available. That hesitation on the part of would-be investors motivated Cornèr to create investment advisory accounts. Those clients receive investment proposals and advice from their account officer based on their personal risk profile, their long- and short-term goals and their requests. The hand-holding has helped ease fears about diving into investment.
Cornèr also launched what it terms Discretionary Investment Management Accounts in which the bank manages the account on a discretionary basis based on its best judgment and experience for client risk profile.
Most recently, Cornèr Bank Bahamas launched its My Cornèr app which provides clients access to their respective Cornèrtrader or private banking investment account from their mobile device. “We aim to provide our clients access to the latest technological advances where possible to make access to trading and investment easier,” says Russell.
Cornèr executives know they may have a niche in the market now, but competition is likely to follow. “It gives us even greater satisfaction to know that Bahamians have the right and privilege to invest in global markets,” says Russell. “The right to invest is a right to participate, a coming of age, representing in our personal finances what the right to vote did in our political and social lives.”