This is a review of Southpac Trust Group, a New Zealand based trust company. On their website they say they offer accounting services, compliance services, banking services, investments and corporate services. In addition they provide estate and succession planning and wealth structuring.
Our company has known Southpac since 1994. We have met with and corresponded with their personnel over the years. The people come across to us as quite professional and courteous and the firm has a favorable reputation in our view. They are most known for setting up trusts in the Cook Islands and more recently, Nevis trusts.
The Downsides of Southpac Trust
The downside with Southpac Trust is that their due diligence (know your client) process is among the most stringent in the industry. Most people who set up offshore trusts do so when in the midst of legal battles. Others set up asset protection structures when they know a legal fight is on the way. In our decades of experience, people already in or about to be in lawsuits account for 86% of those seeking asset protection.
The problem is, in our experience, that Southpac trust reviews applications and then is known for rejecting people who need their services the most. Many other trust companies will accept people who are in legal battles. Southpac is known for rejecting them in most cases.
In addition, in our experience, if someone inadvertently fails to mention a prior foible — a lawsuit, judgment past, present or pending — they will automatically consider it an intentional sin of omission. “You did not ‘reveal'” (as they say) “that you were in a lawsuit in 1972, therefore you were trying to deceive us. So, our compliance department has decided we cannot do business with you, your children, your children’s children, anyone you refer to us or anyone living within a 25 mile radius of you.” Of course, we are being facetious here, but we have personally witnessed Southpac exhibit the direct converse of “benefit of the doubt” and the twin brother of “guilt by association” on numerous occasions.
Here is an example. Southpac is very familiar with their extensive application. You and I are likely not. If someone fails to mention something on an application, in our opinion, they should explain it to you, not decapitate you. Even one of our own staff members, intimately aware of due diligence procedures, tried to set up a structure with Southpac. He, no longer in a lawsuit, did not read one of the multitude of questions thoroughly enough. He did not mention a past civil lawsuit. Incidentally, in this case, the plaintiff’s attorney manufactured vile stories, the plaintiff bore false witness and the judge took the bait, hook line and sinker. In the next case against our associate regarding the exact same matter, our associate won hands-down, before the same judge.
The question (one of many in Southpac’s extensive due diligence packet) was one of the most confusing questions he had ever read, with multiple questions within questions. Southpac review personnel automatically assumed it was intentional. (It most definitely was not.) They assumed the incredulous stories the opposing litigant concocted were true. (They most definitely where not.) Southpac amazingly dismissed the fact that our associate won the next case on the same issue (with the same judge, by the way). Moreover, he won so strongly the judge ordered his opponent to pay his legal fees. Then, to our shock and amazement, Southpac rejected his application and anyone he refers to them. We have seen this automatic assumption of culpability behavior with multiple providers who have referred business to this organization.
Southpac Probably Means Well
We are sure Southpac probably means well by their strict aversion to shades not lily-white. But asset protection is a messy business. Thus, sometimes in this business of protecting those who need it we want to give people a bit of grace. We need to explain what was missing from the application and not automatically assume our clients were playing fast and loose with the facts. The clients may have omitted certain information simply because may have honestly overlooked or misunderstood the question. The client has never seen the application before. The provider has. The provider needs to realize this and offer a hand, not a hammer.
In addition to the above, Southpac is also more expensive, in our experience, than other trust companies. In addition, we have seen them resign as trustee when trouble arises. That said, one thing is crystal clear. We want to stay 100 miles away from people engaged in illicit activities. On that particular we or Southpac will not and should not budge.
If you or your client are not facing a legal battle, Southpac may be right for you. Expect to pay more. The service they provide is acceptable and their personnel are friendly and helpful. However if you think you might have a lawsuit on the way, or already do, think twice. You would likely trudge through time-consuming due diligence and documentation procedures. Then, in the end, they will tell you, “unfortunately, our compliance department…” and decline doing business with you.
Nothing said here is meant to say anything “bad” about the organization in this Southpac review. After all, it is a review. Unbiased reviews discuss positives and negatives from the reviewer’s vantage point. So, it is just our experience with the firm from our perspective. They are, in our view, a fine organization. It is just that there are many other trust companies to work with that may better serve your needs or those of your client. If you need asset protection, call us. We and our in-house attorneys can help you find the proper solution.