Depositors searching for security as well as services find dollars stay

ONE mantra investors always hear from their financial advisers is 'diversify your portfolio' - and the same applies to banking.

While Hong Kong itself is considered an offshore financial centre in that gains on deposits are not taxed, there are plenty of reasons it makes sense to park at least some of your money elsewhere, say bankers and advisers.

'A lot of people in Hong Kong have offshore accounts. They feel that is safer,' said Linda Wong Siu-ling, group deputy director at independent financial adviser Allen Perkins.

Despite the successful handover, some investors harbour lingering worries about sudden intervention by Beijing in Hong Kong's financial affairs.

As Anthony Haynes of the offshore bank Cater Allen wrote in Allen Perkins' magazine Calibre: 'Customers around the world want to ensure that their money is secure in a stable jurisdiction - to put it simply, they want to sleep peacefully at night knowing their wealth, which they have struggled to save, is not subject to the whims of various governments or individuals.

'In effect, placing money in an offshore account is an insurance policy against any future imposition of exchange controls or changes of regulation such as those recently seen in Malaysia.' Such fears about Hong Kong were slowly subsiding, said Michael Look, manager of Bank of East Asia's overseas branch operations.

'But people like to diversify. That's the long and short of it,' he said.