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  1. Wealth
September 8, 2010


By Spear's

Breaking out of Fortress Wealth Management can be hard to do. You rarely leave in triumph, more often in a (career) body-bag.

Breaking out of Fortress Wealth Management can be hard to do. You rarely leave in triumph, more often in a (career) body-bag. But you can smuggle out some secrets from time to time, and tell some harsh truths. Which is why I’ve started to blog…


BP will set aside USD20 billion to cover reparations for the slick spreading across the Gulf of Mexico as a result of Deepwater Horizon’s haemorrhage. On the positive side, the oil giant has capped the leak, at least for now. The event is pretty disastrous if you’re a (now) outgoing BP CEO, live on the Gulf or a concerned environmentalist, but it looks like the tide is turning. Still, the political howitzers are only just starting to line themselves up to blitz BP.

The situation got me thinking about parallels in the wealth management industry. It didn’t take long to find one.

The last few years have seen a wide range of spills, mostly client names and account data, across the major offshore centres – with UBS’s US client-book being the equivalent of Deepwater Horizon. Actually, the parallel is stunning. Both BP and UBS lost CEOs, had a crash in confidence, lost revenue and clients, took a political pounding, etc.

But the list goes beyond UBS. Indeed, it is long and includes the distinguished. Julius Baer, HSBC Private Bank, LGT, Deutsche PWM… The list probably goes on well outside the public and my own inside-knowledge of the global wealth sector.

So, what next? Well, I am pretty confident that there will be more leaks (in oil and wealth). After all, there is now a trading environment between states and disgruntled ex-bankers for client data and if you take the time to do some digging the return on investment for the state can be impressive, VERY impressive.

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Now, I know the offshore-oriented banks are livid about this new reality (and can understand why). After all banking is a complex business. But the other side of the reality is a USB stick is pretty small and can take a LOT of data…

The days of nice, simple, heavy (immovable) ledgers are as long-gone. The reality is that nothing is 100% safe, as long as there is a big enough rupture in the pipeline, despite what the marketing may say or buyers want to believe.

So, I think what I am trying to say to both clients and the industry is if you want to deal with black-stuff, be prepared for a spill.

And of course, I’ll be spilling the beans on this blog every week.

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