Yan’s Notes

Yan from Owner.One

Can we go to any bank in the world and open an account? Today we are not in 2000 or even 2010. The concept of residential banking, initiated by FATF, has become a significant hurdle for most foreign clients. When opening an account, we must show a connection with the country whether through citizenship or a residence permit. Yet, even this is often not enough. Banks also check secondary indicators that determine the substance, such as property ownership, rental agreements, municipal documents, and other proof of a strong local presence. We cannot open an account and not maintain its current status; compliance is an ongoing routine. At any moment, except in cases of single citizenship, banks can determine that a client no longer meets the residency criteria. This reality is grasped by a mere 2.98% of banking clients. While banks can still technically open accounts for non-residents, the extent of their liability often makes such opportunities rare. Regulatory frameworks are tightening rapidly, suggesting that soon, requirements will be as stringent as they now are in the EU.

Yan from Owner.One

When sending a payment today, one cannot be sure it will reach the addressee. The bank's client presses “send” and almost nothing depends on him. The myth of risks being scarce, with the worst being the bank simply returning the money, is in the past. Why might a bank reject a transaction? Someone in the chain of banks finds the transaction (KYT) or the customer’s profile (KYC) questionable. Most international payments follow the “bank - multiple correspondent banks - bank” route. Any bank in the chain has a wide action range: returning the funds and including the client in its stop-list, initiating the client’s dossier deterioration in World Check and analogues, or informing government agencies. If three banks executed a transaction and the last one stopped it, no bank will actively step up for the client. Rather, the client will be subject to an additional verification from his bank. 87.6% of affluent families do not analyze the aforementioned and do not take preventive measures.

Yan from Owner.One

Facing compliance, KYC, KYB, AML and similar procedures for the wealthy and their family members becomes a real stressor. For many it results not only in a bank transaction refusal, but in more distressing consequences like blocking account funds. Why now, after interacting with their banks for years, do experienced customers suddenly face a huge number of problems? For some reason they have missed the part of the progress where FATF started to act so that KYC has a chance to reach everyone. In a couple of years, regulation has become more scrutinized and checks have become more sophisticated, consequently, the amount of “frozen” capital in the world has increased drastically. An increasing number of wealthy families have felt it. The luck of previous years is a big disadvantage for such families. It is not possible to grow in sync with stricter rules. It is necessary to bring matters up to speed with times abnormally fast.

Yan from Owner.One

About a decade ago, I received advice on how to properly structure personal income streams. I had no idea that this would unexpectedly simplify my future banking compliance and KYC processes. The key was to diversify financial streams across various banks. One account received dividends and fees, another managed investment income, and a third handled proceeds from the sale of businesses and real estate. Corresponding expenses were also drawn from these accounts, which made analysis and planning much easier for me. Each bank accumulated a history of my transactions, which were comfortable for them due to their consistency. Supporting documents were archived as well. A few years ago, I discovered that transaction uniformity, the presence of copies of contracts and documents in client files, clear ownership continuity, and justified asset growth are crucial for effective KYC controls. I strive to follow this advice even today. Most compliance requests arose when I did not follow my own rule.

Yan from Owner.One

Families often lose assets and capital (statistics indicate up to 72%) during the transfer from the founder to family members. However, this is not the only challenge. Family members often only discover the liabilities accompanying these assets when creditors start to claim them in the future. Liabilities may exceed the assets, and identifying this in advance is nearly impossible. Only 13.2% of respondents thought about this question. Assets and liabilities are two extremes, but there are also risks - uncertain events that may occur. The founder and his family have different levels of risk tolerance. The head takes risks related to assets (guarantees, ShA, options) and assesses their capacity to manage this risk, often with a backup plan. Family members have neither the skills to navigate these risks nor the necessary tools. Few families have truly effective mechanisms for asset transfer, and information asymmetry regarding liabilities and risks is even more pronounced.

Yan from Owner.One

Most people know persons with two, three, or five passports. This is not only the freedom of movement but also the freedom of financial planning. Freedom requires greater caution. The grounds for denying a banking transaction and initiating additional scrutiny may be the unwarranted and illogical possession of multiple passports by a UBO. The concept of “residential banking”, enforced by FATF and banks, requires demonstrating a reliable connection with all the countries of citizenship and residency. The others face limitations in their rights.. If one passport is used across all global banks, why hold the others? A simple way to improve your reputation with banks is by providing a Source of Wealth Essay, but 93.9% of individuals lack this document. In cases of doubt bank compliance officers start with the SoWE. A strong explanation of why you hold multiple passports can help stem the issue.

Yan from Owner.One

Some organizations provide asset and capital information storage services. These services are limited to filing, storing, and transferring documents. While the cost of services is relatively low, from $9 000 to $15 000 per month, demand for them is not high. Why? Firstly, these companies only store what the owner provides; the owner is the sole source of data updates. This reduces efficiency and empties the very essence of the idea. By the time documents are transferred, most of them will likely be outdated. Secondly, there are doubts about precise execution. Payments are required continuously, while the documents transfer occurs later and only once. The owner won’t be able to verify the timeliness or completeness of this process, but expenses over ten years can be substantial. As a result, many consider these services to be “money wasted”. However, the need itself persists: 71.41% of surveyed capital owners would be willing to rely on a third party-provided it’s not a person.

Yan from Owner.One

Banks and financial institutions form perceptions about you based on your profile, which depends on provided information. But, many capital owners overlook this opportunity. Incomplete information can lead to service denial or account freezes. The client profile begins with a Source of Wealth Essay (SoWE), which narrates the story of your income. Yet, a staggering 92% of wealth holders ignore this option. The SoWE outlines the origins and timeline of family wealth, highlighting key milestones in capital accumulation. A well-crafted SoWE minimizes future inquiries. 93.10% of wealth holders believe they have a SoWE fail to realize that the few pages they submit in response to bank requests are not enough and can serve as a red flag for them. The SoWE should be prepared in the language of the countries where family assets are held and share it with successors. While children may not have their own capital history, they can benefit from yours.

Yan from Owner.One

Many capital owners keep their money assets that can be easily accessed by their families. One such "convenient" option is bank safe deposit boxes, utilized by up to one-third of surveyed wealth holders. Their accessibility creates the illusion of a quick and simple transfer of assets from the founder to family members. However, only 2.64% of respondents are aware that in several countries, there is a rule: if a safe deposit box is not renewed on time, the bank will open it in the presence of police, and its contents will be placed in a "black bag". Retrieving your money and valuables can only be done in the same manner — under police supervision, which means you will need to explain their origin. A paradox also exists with other popular assets. In an attempt to secure themselves by holding only the most liquid assets, capital owners invest in asset classes that are, in fact, susceptible to capital loss during planned or unplanned transfers to successors.

Yan from Owner.One

Our project focuses 80% on individuals with wealth up to $100 million. Why them specifically? The answer is both deeply philosophical and highly practical. Economists believe that wealth up to $100 million is the most productive. This is the type of capital that is largely tied to creation, growth, and industrial production. Its owners are primarily driven by the desire to do something meaningful. They are not financial rentiers yet, so they actively create added value for any national economy. Any crisis, whether: political, economic, military, or financial, tends to erode this most productive segment of capital first. Crises are factors beyond their control. There is also another side to the problem. People in this category are so absorbed into their current ideas, projects, businesses that no pay attention to preserving their wealth and passing it on within the family. This is an absolutely controllable factor, but they unjustifiably treat it as something beyond their control.

Yan from Owner.One

Capital founders are confident in their financial decisions. Yet significant losses still occur when transferring wealth to their family. The root cause lies in psychology and a lack of information. Family leaders simply set aside the dividends they receive, focusing on their current business. They delay preparations for transferring wealth and assets to their families. They have minimal knowledge about the process. In this field, there are no rough drafts, and actions must be taken with absolute certainty. The family head needs a counterpart for reflection. The family? Too emotional. Friends or business partners? No one is willing to share examples from their own family and wealth. Consultants? The interaction can be exhausting. Being open about these matters is even more challenging than a session with a psychoanalyst. You are forced to talk not only about personal issues but also financial problems. As a result, capital founders feel alone in their thoughts.

Yan from Owner.One

Many who begin preparing their wealth for transfer quickly give up, postponing the task once again. Why? Among families with wealth up to $100 million, the penetration of family offices is only 1.46%. These offices manage non-executive administration for no more than 25% of a client’s assets. In the upper-middle-class segment, the penetration rate is even lower, just 0.73%. Capital founders are overly involved in administering 75%-100% of their assets, while family offices handle only the analytical and background work. The founder is the authorized representative in the external world and is often required to personally perform: visiting bank offices, writing emails to brokers, contacting regulators, and executing other verified actions. The founder faces a dilemma: continue managing the assets independently or delegate executive rights. It’s easier to “think about it tomorrow”, especially since managing wealth transfers is not something family offices typically want to handle.

Yan from Owner.One

Yan from Owner.One

Information asymmetry within wealthy families is a phenomenon that has been known for nearly 100 years. The founder almost never proactively shares or updates family members about assets and capital. But when a negative event occurs, it's often too late. Founders hold an information monopoly, lack reliable channels for passing on this knowledge, and the information itself is not structured for effective transfer. The problem of information asymmetry within families and the associated capital loss has grown exponentially since the 1990s. By 2024, 48.0% of capital owners believed their families would be unable to "take over" the assets due to a lack of complete information. Another 23.7% of owners were even willing to give up as much as 25% of their entire wealth in exchange for a guarantee that the rest would securely pass to their family.

Yan from Owner.One

A client can compromise their own bank or brokerage account simply by accepting a payment from a politically exposed person (PEP), a sanctioned individual, or anyone raising concerns related to AML or CFT. Receiving $10k from a "toxic" source could very likely put the entire account at risk, even if it holds $1 million. The payment might not come directly, but from family members or associates of such individuals. The same issue applies in reverse: if a client sends money to someone flagged as high-risk, they could face consequences. According to statistics, only 21.3% of clients are aware of the risks associated with incoming payments. Even fewer — just 9.4% — consider the risks of outgoing transactions. This discrepancy in risk perception is a misconception. For the bank, there's little difference between incoming and outgoing payments, and the incubation period for detecting such transactions can be as long as 1 to 1.5 years.

Yan from Owner.One

One day, by a unilateral decision of the bank, the client lost access to their capital and assets. Formally, they are still the client’s property, but without the ability to manage them. Presumption of innocence? Forget it — FATF has nullified that. Your capital is not really yours actually. Banks or brokers can impose restrictive measures if they have “reasonable doubts.” Compliance departments don’t answer to bank management but directly to national regulators, and your manager can’t help. The burden of proof isn’t on the bank but on the client, who must prove the legal origin of their assets and maintain ownership continuity. The client will need to gather and submit extensive documentation, yet there’s no guarantee the authorities will be satisfied. And there’s no turning back — you can’t just say, “Give me my money back, I’ll go elsewhere.” Funds could simply be frozen, blocking any transfers, even to your own accounts.

Yan from Owner.One

The vast majority (87.10%) of capital owners do not have precise data and detailed attributes of their assets. They also do not have documents for their assets readily available or direct access to them. They cannot independently transfer data to family members and cannot monitor the actions of trusted persons. What is the alternative to traditional mechanisms attempting to ensure the transfer of capital and assets to their family members? It is necessary to achieve confidential information storage, and most importantly — the transfer of information from the founder to family members precisely on time — not earlier or later, but at the exact moment when something happens. Transfer automatically and without the involvement of third parties. Until 2015, such a result was impossible; now, technology can provide this. The development of technologies and market demand have led to the creation of a tool like the Repository of Data on Assets and Capital. The repository's effectiveness is up to 99.94%.

Yan from Owner.One

For various internal reasons, banks may halt a client's transaction or even block an account. This stems from numerous and often opaque KYC (Know Your Client) requirements, as well as its subtypes like KYT (Know Your Transactions), KYB (Know Your Business), and others. The majority of clients (82%) have encountered issues with banking or brokerage transactions to some extent. Yet only 17% of them associated these problems with their own KYC. Of these 17%, only 29% claimed to have a clear understanding of the preventive actions necessary to minimize risks. Merely 4% grasp the depth of issues arising from KYC. At the first signs of trouble, swift action is essential; otherwise, the situation will worsen, and the bank's demands will escalate. Those who proactively attend to their KYCс— keeping maximum documentation readily available, maintaining an up-to-date Source of Wealth Explanation (SoWE), confirming continuous ownership, and adhering to other formal goodwill parameters — are the ones who come out ahead.

Yan from Owner.One

What if a wealthy capital owner suddenly becomes incapacitated? In 90% of cases, they haven’t shared any information about their wealth with family. Assets like accounts, safe deposit boxes, brokers, companies, debts, credits, partners, bonds, real estate, stocks, key contacts, proxies, funds, and investments may be lost or become costly to access. Much of the family’s wealth remains unknown. In families worth up to $100 million, 31% to 73% of assets are lost during the transition — a percentage increasing over the past 30 years. Since the 1990s, information has become more valuable than documents, making information asymmetry and capital loss dramatically worse. Without complete information, accessing assets becomes impossible, even if documents can be reconstructed digitally. By 2024, 48% of capital owners believed their families couldn’t access their assets due to lack of information, and 23.7% were willing to forfeit up to 25% of their wealth to ensure the rest reaches their family.

Yan from Owner.One

Founders of capital almost never share information about their wealth and assets with their family in advance. In the total majority of cases, they have no opportunity to do so after something has happened. According to statistics, 89.13% of wealth creators understand everything but do nothing. Why? Most of the responses boil down to the classic "I'll think about it tomorrow" from Scarlett O'Hara in Gone with the Wind. The transfer of capital happens once in a lifetime. Discovering its outcomes, correcting, and restarting it is almost always impossible. In this field, there are no "drafts". Another stimulus for the development of the Scarlett syndrome is the founders' realization that the effectiveness of traditional tools is already below the minimally acceptable threshold of reliability, yet they require disproportionately high efforts and resource expenditures.

Yan from Owner.One

Once upon a time, you entrusted part of your wealth to a relative, former classmate, or just a trusted person, making them the formal owner to conceal your involvement. Both of you were relatively young, but as the years went by, your wealth grew, along with social obligations. Now, both of you have families, children, perhaps remarriages, and different life changes, like acquiring new citizenship. The asset you entrusted them with is no longer entirely yours. If something happens to them, their family may take priority over you, and you could end up with just half, or even one-eighth, of your factory, which they officially own. And if they’ve acquired problematic citizenship, such as U.S. citizenship, returning the asset to you could trigger significant taxes. Does your proxy have a prenuptial agreement? If it’s in your favor, it might not help much in practice, but if it favors their family, it becomes your problem. Do they have large loans with personal guarantees or risks of subsidiary liability? The list of potential complications goes on. In many cases, such arrangements are perfectly legal. However, legality doesn’t eliminate the issues described above. Talk to your proxy, assess their situation across all risk zones, model potential consequences, and prepare the necessary documents to protect your interests. This note doesn’t cover official managers with formal management agreements. That’s a topic for another note.

Yan from Owner.One

There are many myths and illogical behaviors among wealthy families in our field. Many of these have been analyzed in Penguin Analytics. One prevalent myth is that family money typically transfers vertically (to children). In reality, most transfers are horizontal (to spouses), both planned and unexpected. Analysts (Owner.One, UBS, and local banks) estimate that over the next 10-20 years, $75-95 trillion in capital will be transferred within families. In the next few years alone, $8-10 trillion will be moved horizontally to spouses. This capital will likely stay at the horizontal level for another 10-15 years before moving vertically to children. Key insight: much of the capital loss happens during the transfer itself, not afterward, doubling the actual loss rate. Founders need to pass on not only their wealth but also its detailed and formalized history to meet the increasing KYC (Know Your Customer) demands from financial institutions. Without the founder’s active involvement, it’s almost impossible to reconstruct the capital’s history, leaving family members vulnerable when questions arise about the funds' origins. A surprising 42.86% of capital founders don’t know the details needed for KYC preparation, and an alarming 88.06% of their family members are unaware of these requirements. Only 4.50% of family heads understand that inaction now merely delays the problem, passing it on to their family. Preparing for this is crucial, but that’s a discussion for another time. Recognizing the complexity of capital transfer is the first step.

Yan from Owner.One

I have nothing against crypto. Quite the opposite. But everything must be done carefully. What’s the main issue with large-scale crypto transactions? In 91% of cases, converting from fiat to crypto and back breaks the chain of ownership, limiting capital mobility. Why? Imagine you have $1M in business dividends. You have all the necessary documentation, making you a respectable capital owner to banks. Now, you decide to purchase cryptocurrency, like Bitcoin or USDT. This is a standalone transaction. Later, when you exchange the crypto back into fiat (whether tomorrow or in a year), that becomes a separate, independent transaction. These two operations are not formally linked. As a result, you’ve traded clean capital for crypto, but when exiting, you no longer have the supporting documentation. The chain of continuous ownership is broken. For small sums, this isn't a big issue, but for large amounts, it becomes a red flag for banks. The receiving bank will demand a clear ownership history, and without it, your funds raise suspicion. Banks today require detailed transparency at every stage of capital accumulation—they want to trace every dollar. When you break the ownership chain with crypto, it becomes difficult, if not impossible, to justify the source of your funds. While this problem can be avoided, statistics show that only 9% of people worry about it in advance.

Yan from Owner.One

Few people closely track their international payments via SWIFT trackers, though it’s worth doing as it can reveal potential problems. When you send a USD payment, it typically passes through 3-5 banks. If the payment gets delayed, it's likely that one of these banks has compliance or KYC-related questions for the sender. The bank will request the sender’s client profile from the previous bank in the chain. After reviewing the sender’s identity and finances, the bank either processes the payment, returns it, or freezes it. All banks in the chain can be held responsible if a gray-area or illegal payment is flagged, so they carefully check every transaction to avoid liability. If a bank requests more information about a payment, all other banks in the chain will be aware. Your sending bank will likely notice and may monitor your future transactions more closely or review your profile. Tracking payments helps you understand where and why delays occur, even if the payment eventually clears. You can delegate this task to an assistant, as some SWIFT trackers allow tracking by payment number without revealing sensitive details. It’s also essential to maintain a well-prepared client file with your banks—an important topic for another discussion.

Yan from Owner.One

In today’s world, our lives are diversified not only by types of assets, but also by the jurisdictions where these assets are located. Does ownership of an asset give you your own rights and how can we transfer this capital to heirs without causing them headaches? What rules will govern the inheritance of these assets? The simplest solution might be to draft a will for each individual foreign asset located in its respective country. To create this document, you usually don’t need to travel; in most cases, it can be done at a consulate without the other party’s presence. The key is to plan how to transfer this information to your family in the event of an emergency. Keep in mind that inheritance can be a lengthy and costly process, and until it is finalized, your heirs will have limited access to the assets. This poses a risk of improper management, potentially leading to asset loss. Additionally, inheritance may be subject to high taxes in the relevant country, adding to the financial burden.

Yan from Owner.One

You’ve sent a payment to another country, and it’s taking a long time to reach its destination — this is a common scenario. People check the status of the payment with the sending bank, not realizing that there can be at least four intermediaries involved in the payment chain. If any bank in this chain holds the payment longer than usual, it’s highly likely that you’ll be required to provide more detailed KYC (Know Your Customer) data next time, even if the payment goes through this time. To be prepared and to track your transactions, you can use services to monitor SWIFT payments. These services track the status of your cross-border transactions in real time and notify you of any delays. You can subscribe to paid versions or use free alternatives available online or through Telegram bots. If you don’t want to spend time on this, you can delegate the task to assistant, who can also monitor the transactions. However, keep in mind the risk of disclosing confidential information, as the data will show either the amount or the purpose of the transaction. Additionally, a major drawback of these services is that they provide data only in real time and do not maintain statistics for individuals.

Yan from Owner.One

A black slope can be easier with good snow than a blue slope with bad snow. Often, the reasons behind account freezes or bank-canceled transactions are not immediately clear. Regulatory criteria for deeming client transactions suspicious are vague. Sometimes, this judgment is made because a client has a large number of diverse transactions. This can lead to a transaction freeze and a request for additional documentation. To avoid this, separate your bank accounts by transaction types, and ideally, conduct different types of transactions through different banks. This reduces the frequency of regular and unexpected requests and helps you manage and respond to bank inquiries. For example, use separate accounts for dividends, current expenses, bonuses, and investment income. This approach saves time, is convenient, and reduces compliance risks. Of course, dividing assets among multiple accounts and banks may increase the complexity of financial planning. Additionally, if you mistakenly mix up the accounts and conduct an atypical transaction, the regulator will likely send you a request.

Yan from Owner.One

In the subway, on trains, and at workplaces, there is always a red button for emergencies. In human life, the variations of unexpected events are much greater. Nevertheless, statistics show that 99.2% of wealthy families do not have a precise action plan for emergencies. Have you thought about what you will do and what plan your family will follow if such an event occurs? To avoid being part of this majority statistic, prepare in advance by developing several future scenarios. Even a simple list of basic actions and assets will prepare you and your family for the most unexpected events. Remember to update the plan every six months. In the event of your sudden absence, the survival of your entire family and the preservation of assets will entirely depend on having clearly formulated and planned actions.

Yan from Owner.One

Recently, banking compliance procedures have become increasingly stringent, and it is likely that they will only get worse in the future. Primarily, they request documents proving the continuity of ownership. (Continuity of ownership refers to the history of the origin of your wealth). The timeframe for these requests has also changed: initially, regulators were interested in information from the past 6 months, then from the past year, and then from the past 3 years. These days, you may be required to provide data from the past 10 years. If you have not yet recovered your data, each day you wait only worsens your situation, as your data becomes outdated while the depth of bank inquiries increases. If you do not start addressing this now, eventually these two trends will intersect, and you will find yourself in an untenable situation. Start by recovering copies of documents from the past three years and then delve deeper. Recovering some documents may be difficult or impossible, but by starting this process now, you will already be ahead of many. *Continuity of ownership - the history of all your assets

Yan from Owner.One

A rhinoceros runs fast and sees poorly, but its weight makes it a problem for anything in its path. Banks and partners don’t listen to you; they evaluate a person based on their digital profile. Services such as World-Check or Lexis Nexis are the sources of this data. These platforms were created to check counterparties for involvement in illegal financial activities. However, in reality, they contain information on millions of people. These services are often associated with scandals and data leaks, unjust categorization of individuals as suspicious, and the inclusion of data from irrelevant sources, yet they continue to be widely used. Do not leave this issue unattended. Request information about yourself regularly, at least every six months. You don't need to have done something wrong; it's enough for the World-Check algorithm to flag you as suspicious, or for someone in your contacts to be linked to questionable transactions. There's also the risk of database errors or incorrect interpretations. World-Check is a black box that significantly impacts your capital and assets, potentially leading to loan refusals, blocked transactions, denied bank accounts, and even revocation of residence permits or citizenship. Bank compliance departments work solely with documents and digital traces, so if you face unexplained refusals or biased treatment, World-Check could be the reason.

Yan from Owner.One

Don’t get complacent, if you pass bank compliance when opening an account. Banks regularly conduct reviews of their clients and send requests for additional documentation. They may ask for statements or recommendation letters. Get ready for it in advance; otherwise, you may not have sufficient time to gather the necessary documents, leading to the refusal of transactions. To stay ahead, request recommendation letters, annual, and semi-annual statements from all banks where you hold accounts every six months. Typically, bank inquiries cover the current and previous year, and recommendation letters are valid for six to twelve months. To save time, create a template that can be sent to all relevant banks. Most banks accept free-form requests, but some may require you to use their specific templates. In such cases, you’ll need to send separate requests.

Yan from Owner.One

In the event of an emergency, conveying all necessary details to family members can be challenging or impossible. Many believe that existing methods are either unreliable or cumbersome. However, the solution can be simple: grab a sheet of paper and a black marker. Write down a list of your assets, capital, and their locations. Make several copies of this document. Use a black marker to obscure different parts of the information on each copy (this can also be done digitally in MS Word). To ensure the information cannot be read through the redactions, photocopy these documents again. Distribute the lists to different family members. Now, your family has crucial information that they can use in a critical moment, but they will need to come together to combine the pieces of the puzzle. Risks: this method is not perfect, but is certainly better than having no plan at all. It works best if the family members are in reasonably good relationships with each other.