Like it or loathe it, the global wealth management sector is really feeling the heat these days as it deals with a low interest rate environment, new business models, the rise of fintech, and masses of regulation to comply with.
This comes a time when a baking heat wave has been scorching Europe and much of the world.
A question that might get some people hot under the collar – but that needs to be asked – is what the global private banking and wealth management sector is doing to root out corruption, money laundering and tax evasion?
Is the sector doing enough? How angry are you with financial institutions and wealth managers when they are alleged to have ‘misappropriated client funds’?
You might ask why I am posing these questions when your wealth management business fully adheres to all international compliance guidelines, and offers complete transparency and professionalism to clients.
But there appears to be a minority of financial institutions and wealth managers that are following their own rules – either through greed or ignorance.
Why do I say this? And on what basis?
Well, hardly a week goes by without some major wealth manager or financial institution in the world being implicated in a corruption scandal.
Of course, everyone is innocent until proven guilty. But in the real world, many consumers will think there is no smoke without fire.
Allegations and actions of wrongdoing by a ‘rogue minority’ tarnish the years of good work, professionalism and great service offered by the majority of financial institutions and wealth managers.
Such allegations, and those that are proven, bring shame to the private banking and wealth management sector and financial services in general.
Regulators worldwide are certainly cracking down hard on those alleged to have violated banking rules – and the million-dollar fines being meted out would sink any other business.
PBI praises regulators for this tough approach, because the allegations often suggest an appalling abuse of client trust.
The role of private banking is not to enable clients to evade tax. Its purpose is to help clients protect and grow wealth for the next generation.
You may have heard the joke: ‘Some bankers are generous to a vault’. Let’s ensure this joke is not perceived by investors as having a grain of truth.
The sector must remain fully compliant with all rules – and root out any rogue players so the industry is viewed as a beacon of transparency.and professionalism.