Editor’s Note - Wealth Management Supplement November 2009
The financial crisis has impacted all, including the rich and super-rich. It has turned some billionaires into millionaires, and making some millionaires join the ranks of mere mortals who have to queue up in a high-street bank instead of enjoying the privileges that come with wealth management services.
Private wealth holders worldwide ‘suffered a terrible loss of trust’, lamented one of the practitioners talking to IBS. ‘The very institutions they thought were designed to protect them let them down.’ The result is that the service providers now have to fall over backwards to attract and retain the ever less-loyal clients. IBS looks at how technology can help in these endeavours, with practical cases of three financial institutions in different geographies.
So what can and should be done to safeguard the sector from such disasters in the future? Better risk management, better analysis and more scrutiny of operations, more control over the decisions the financial planners and investment managers make. But these are all things anyone with common sense would have expected to have been applied in the first place. The software to underpin these processes has been in place for some time. What’s been missing, some experts claim, are the global (no less!) standards and principles of conducting wealth management operations.
The emphasis is on ‘global’ due the nature of the business. There are hardly any geographical restrictions on investing capital, and if the revenue can come from virtually any part of the world, so can the problems. The knock-on effect is global, too. Another prominent industry expert compared the financial fraud and confusion to the swine flu, which ‘gets on the plane in Mexico City and gets off in Geneva’. Likewise, ‘Madoff “got a plane” in New York and got off in Geneva, Hong Kong, Sydney’.
How realistic is worldwide adoption of the proposed standards? More pertinently, what should these standards incorporate? The debate is ongoing, as is the development of the technology to support the wealth managers.
Enjoy the supplement!
Tanya Andreasyan,
Supplement Editor
