The so-called Paradise Papers won’t have many direct implications for offshore wealth managers.

The leaks will however stoke more political appetite for increasing regulatory scrutiny of anyone involved with the wealth management industry.

This will likely drive further consolidation in the offshore private wealth space.

The papers are mainly made up of nearly 50 years of business activity by Appleby, a law firm based in Bermuda that specialises in offshore clients.

They document a range of legal structures and strategies used by corporate and individual investors all over the world to minimize tax liabilities.

However, unlike previous leaks few reports on the subject appear to show any intentional criminal tax evasion by those involved.

Mostly the papers highlight how properly structured and packaged offshore assets and income can be held entirely legally and attract little in the way of direct tax liabilities (provided they remain offshore).

Tax efficiency is the second most important reason for offshoring wealth globally among high net worth investors, cited by 18.2 percent of wealth managers, according to a recent GlobalData survey.

Source: GlobalData

In contrast, client anonymity comes in at a distant 2.8 percent.

As such it is unsurprising the leak shows little in the way of wrongdoing, and unlike with previous leaks wealth managers have little to worry about in terms of fines and direct legal action as a result of these revelations.

But in the longer term the papers are likely to contribute to further regulatory scrutiny of the industry and doubtless lead to calls for more legislative action from politicians around the world.

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The net result is likely to be even more burdensome regulation for those operating in the offshore market and yet more compliance issues to deal with.

Marginal players in the offshore wealth market are likely to see this as a key milestone at which to reassess their business.

Those operating below the scale necessary to generate decent margins are likely to jettison their offshore divisions, continuing the trend of consolidation in the offshore market that has already seen many top wealth managers retreat from this previously lucrative line of business.