Friday, 30 November 2007

Karen Jones asks: “Which private client accountants do you work with most often?”

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Managing Director, Private Bank, UK responds. "The ones we do most business with and the best relationships we have are the big firms in this order."
2. PWC
3. Ernst & Young
4. Deloittes
"However there are many smaller firms that are excellent in terms of quality. I would say HW Fisher are very good. With the smaller firms we get to deal with the partner directly more often so the quality of work is very high. "

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Citywealth asks Andrew Young, Head of Private Tax and Capital, LG law firm, London: “Which top four entrepreneurs do you most admire?”

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Richard Branson
Great image and ambition which seems to know no bounds. He is witty too.

Stuart Rose, Chief Executive, Marks & Spencer
Because he beat back Sir Philip Green and comprehensively turned around a national institution, when nobody thought he could do either.

Sir Philip Green, billionaire
Despite being beaten by Rose is still the King of Britains high streets. From a relatively humble background to many billions in one working lifetime takes a special talent. He is also the King of the British expat community in Monaco where he throws magnificent parties. He isn’t a shy violet and I like his style.

Guy Hands, Chief Executives, Terra Firma Capital
He was a contemporary at Oxford and a close friend of William Hague’s aswell. He has gone from investment banking success to establishing Terra Firma (they are a neighbour at More London) his own investment company doing multi billion dollar deals. He is now one of the City’s leading financiers. Even at Oxford he was always selling stuff, but who would have thought they would both do quite so well.

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Steering family offices to success

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Caroline Garnham, a partner at Lawrence Graham, has clients in such far flung places as Switzerland, South America and Singapore. She studied psychology at University before deciding to be an opera singer. She later decided to expand her horizons taking a conversion course in the law, uncertain whether a career on the stage would provide a satisfying future. This led her to Allen & Overy where she started life as a tax lawyer “spending five years in corporate tax.”

During her time in the hard nosed corporate world she found herself gravitating more to people than the deals and so eventually decided to switch into private client.
Once firmly established in the private client space she later took the title of head of department at Simmons & Simmons. The promotion though, wasn’t without its problems. The mid nineties saw London law firms reviewing their core work, which left many like Caroline, who ran a relatively small department, pensive about the future. She determined to use every ounce of energy to build her team and put them in a strong financial position to prevent any ‘strategic reviews.’ Fired-up, she set about inventing a whole new marketplace and revenue stream for herself and her team.

Family offices were a growing area of interest for the ultra high net worth client, which became Caroline's chosen target market. Caroline quickly pin pointed problems that still exist today. She discovered that many family offices as well as being tucked away inside a family business, making them difficult to identify, were often riddled with disputes and grievances or dominated by stronger personalities within the family.

The sorts of problems families were having were wide spread. Trustees were being challenged by children on the death of a parent; second or third wives were fighting for prominent places within a business for their children; distanced or estranged children were being written out of wills and parents spent much time worrying that their vast fortunes would be too stressful to pass down to financially unsophisticated children. “Wealth is like fire” interjects Caroline “if properly contained, it provides warmth but uncontained it can burn and destroy absolutely.” She says her research revealed that many family members had no voice within, with the result that conflict was spreading easily.

Armed with this information, she harnessed her corporate background and hit on the idea of applying board room processes to families or offering them “family governance” as a saleable template. The structure she set up emulated a board room approach, with segmented control and accountability for the offices. It ultimately meant fair procedures and a level playing field for all. Caroline comments. “Despite enormous wealth within a family office, personal issues or favouritism could catapult the office out of control, which in worst case scenarios meant millions in litigation fees.” Caroline began lecturing on the benefits of using corporate business processes like AGM’s in family offices to assist transparency and communication and still does so to this day. “Containing wealth is ultimately going to harness wealth and keep it for proper purposes for instance to maintain the business or help in a philanthropic cause. Otherwise it can be used for unpopular business decisions or to support lavish lifestyles for whoever is in charge.”
Established in this field now with a high profile move to flourishing private client firm Lawrence Graham in the past year, her entrepreneurial drive continues and is expanding into new areas. An imminent project will see a private client online offering launch with Caroline and industry heavyweights behind the helm. It's aim is to promote the private client Industry and highlight good practices. The plan is to have a subscription based interactive website for all within the industry to access. Caroline comments. “It’s for those who are frustrated at not being able to get their marketing message across to the right people.”

Caroline believes there are a vast number of families and multi millionaires who have problems with their wealth but have no idea who to approach, which is one of the reasons for starting the new ‘Family Bhive online forum.’ “I don’t think many private clients are using the industry effectively, they need to know who does what in a more relevant and meaningful way.”
Of the big changes she has seen throughout her illustrious career at the very top end of the private client industry, Caroline says old fashioned tax planning has become exasperating with the likes of Gordon Brown and his tax officers issuing anti avoidance legislation almost by the day. She makes a fair point that it makes life difficult if clients with good tax planning find themselves being investigated. “They understandably find it irritating when they’ve paid good money on legal fees. The UK tax service is too aggressive” says Caroline “I noticed this trend some years ago so made sure I diversified so as not to be too involved in private client tax work.”

Of her actual day to day working life she says she spends a lot of time with families and entrepreneurs who are “very bright.” Ongoing administration is usually not needed for families, her work is more focused on one off structures which she then updates periodically.
As to where her clients tend to reside, she says. “They are peppered around the world on every continent.”

Caroline has more billionaire clients than most and although it’s difficult to put a number on how many, she considers thirty to be a good guess.

Of her clients, Caroline says she prefers dealing with entrepreneurs rather than those who’ve inherited because “entrepreneurs grasp difficult concepts easily and make decisions quickly.” She continues on this theme. “The second generation are often in a difficult spot. Normally whatever they do will evoke criticism from someone and it’s harder to follow in the footsteps of their parents with the public and media glare. A challenging life can result in the second generation client becoming a professional complainer.”

Finishing off the interview I see if we can dig up any stories of super rich excesses. Are her clients all whizzing around in helicopters and private jets? She reveals they are but not just because its fun. “If you have a client with a busy life they probably have enough problems without day to day travel irritations. One of my clients was on the road for three months and was tired and fed up with hotel rooms, delays and dry cleaning not coming back. They spend to ease lifestyle problems rather than to show off.” She confirms.©

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Tracy Mattes, world class athlete, NBC presenter and philanthropist and all achieved at thirty six

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Formula 1 racing, the super rich, a history that includes Grace Kelly, later Princess Grace, super yachts, helicopters and sunshine. Monaco residents have a charmed existence. Once known as a sleepy spot, Monaco now attracts finance entrepreneurs, famous sporting stars and is lifting its status onto the world’s financial stage.

With thirty three thousand residents, in a breezy, Riviera space, Monaco is attracting people who are global talents, easily accessible to locals and formed into a unique club of high ranking dignitaries, royalty and famous stars but the playboy image is being put to rest. The ultra high net population is focused on global environmental and philanthropic concerns.

Tracy Mattes, who was raised in the USA, is one of these inspirational residents. After an international career as a high earning athlete, which meant training six to eight hours a day and a second career presenting and producing the evening news at NBC she has been living in Monaco for four years. She came to the area after being invited to the Principality to train for the Modern Pentathlon which ended up turning her life around. Unfortunately a horse riding accident resulted in a fracture in her hand and put her out of action for competition.

Tracy took the unwanted rest initially with difficulty but her determined spirit prevailed and eventually she decided to hone her business skills completing an MBA, where she finished top of her class, earning her the Valedictorian Award, which HSH Prince Albert II and Greek tycoon Stelios Haji-Ioannou, a Monaco resident, presented her with at her graduation ceremony. At the same time she came up with the idea of a business plan for a scientific Olympic Sports Training Centre in the region to help athletes prepare for high level competition. The centre would help coordinate training schedules at the many high level sporting facilities in Monaco, offer services like nutritional advice, health plans and accommodations for athletes in training, something that she had identified as missing throughout her well travelled career which spanned fifty three countries. She sat down and wrote a plan which she submitted to a Business Plan Competition during the 2004 Investors Week in Monte Carlo, where she won her first business award for the project plan, leading it to be snapped up by big name investors. The building blocks are now being put into place to form the first ever world class scientific Olympic Training athletic ‘home’ in Monaco for international athletes. Although athletes like Tracy can earn a million dollars a year on the circuit, she says the life is a hard one and not all celebrity and limousines which is why she wants to get this training centre in place. “There was a lot of hardship in between races, there were times you didn’t know how you were going to get from one to another, but it always turned out to be an adventure. What we are creating here in Monaco, is something us athletes wish we would have had during our careers." She tells a story which highlights tougher times. “During a competition in Cape Town, a friend said she used the phone in the hotel for just a few minutes and it cost over one hundred dollers. "I was in a total panic because I’d been on the phone around the clock. Fortunately the heavens intervened and a lightning storm caused a tree to fall on part of the hotel's main lobby, damaging the building and wiping out technology and phone records. "It was a bit of a relief, as I can imagine what my phone bill would have been.” She says, with a big smile.

In the meantime she is busy wading through achievements that would take most of us decades. She has started work as a Marketing Director with the express aim of giving something back to the world. Jaguar Sports Corp. is a brand of sportswear in its infancy that intends to rival brands such as Nike who currently can only utilise 38% recycled materials in their lines. Jaguar Sports has put technology in place to make smart, saleable sports wear out of 98% recycled materials like plastic bottles, with eventual plans to locate a factory in Malawi Africa to bring opportunities to the local community. “Our goal is to teach those in poverty a model of sustainability, not just hand out money, which rarely ever reaches those in need,” says Tracy. “Our goal is to be the next big brand.” With her sweep of medals and achievements, I imagine it’s move-over-Nike-time.

Working in conjunction with high ranking sports stars like Seb Coe, Tracy is also involved as a Representative to the United Nations ST-EP (Sustainable Tourism for the Eliminatin of Poverty) Foundation, and works with other high level committees involved with Peace & Sport, sustainable tourism and focusing, like many others, on the 2010 World Cup coming up in South Africa as a platform to highlight philanthropic and sporting initiatives to the thirty million people who will travel to Africa. “Sport transcends everything.” She confirms.

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Res’ non doms’ and UK revenue investigations

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John Carrell, who is head of the Farrer & Co tax practice in London, has been working for wealthy European families who have moved to Britain, for more than thirty years “quite discreetly” he says. John was with Stephenson Harwood for eight years before Farrer & Co and tells me there are several partners at Farrers who specialise in advising the international wealthy including Mark Bridges (Middle Eastern) and Jim Edmondson (international entrepreneurs).

John dedicates his working life to setting up arrangements for clients moving into Britain (the celebrated non-doms) and confirms that most of his work comes from Swiss lawyers, private bankers and trust companies. “Once instructed, I take clients from cradle to grave.” He comments in his assured and measured drawl. “I do their tax planning before they arrive, setting up their remittance arrangements and trusts and structures for home ownership. Then I announce their arrival to the tax office and get the right rulings .” Although John acts somewhat like a family office, he doesn’t undertake basic functions like tax returns but says he will choose and supervise accountants who do this. “I keep a general watch over client affairs to keep things running smoothly.” He adds this with a surety that must engender some confidence and allay any panic clients might have about revenue investigation. John adds a sentiment that many lawyers share. “In recent years the changes to investment products and funds have been immense. So I have to keep on updating the advice I give my clients on what investments they can safely hold from the tax point of view and what monies they can bring in to the UK. ”
I wonder how John approaches a seriously rich client with what some might consider dentist drilling type material when ultra high net worth entrepreneurs are known for sometimes being a law unto themselves. John has streamlined his procedures. “I give them a UK spending guide, a sort of one pager with practical advice detailing which accounts they should pay bills from and which credit cards to use.”

John also deals with foreign domiciliary tax investigations and his change in manner suggests that they can be pretty unpleasant places for clients to wind up. “The Revenue has a special unit that targets the offshore arrangements of the wealthy” he says. “For foreign domiciled clients the rules are generous but you have to play by them: if you get it wrong a large bill is the penalty.” He hastens to add that the investigations he handles are not generally into his own clients but those referred to him by other advisers. John has been involved with the high profile Gaines-Cooper case acting for one of the parties targeted by the Revenue. “The enquiry has been going on for five years and still continues.” Before adding with some feeling: “investigations can last for years and be very stressful.”

Of the rise of the non-dom’, John says the increase has been particularly sharp in the last five years and the march continues with the arrival of the Russians buying London properties purchasing at the top end of the market. “The UK really is a tax and fiscal friendly environment for foreigners, compared to France, Germany or the USA. So with criticism mounting daily in the national press against resident non domiciles who don’t pay tax on foreign assets, I look for the counter argument from John. Should we change the law to potentially put off this type of incoming individual or leave it as it is and benefit from knock on wealth distribution because the individuals spend time and money in the UK? He obliges with his view. “I don’t see any problems with this law and the government is constantly saying they are going to revoke it but haven’t done so, thus far. It is a satisfactory state of affairs. The incoming wealthy bring in a lot of revenue and they do pay VAT and in most cases stamp duty land tax. A large number come to work for banks and their salaries and huge bonuses are taxed at 41% with employers national insurance at 12.8% on top of that. If we brought in tougher tax rules, the exchequer would potentially lose all this income. They would move elsewhere: to Dubai, now a major financial centre with no taxes – or Singapore or Switzerland where taxes are low. This market is very mobile and the London regime suits them. If it didn’t they can move anywhere else with communications improving and lifestyle changes in other countries.” John highlights the statistics. “There are supposed to be 30-40,000 French men living here and I guess half a million resident non domiciles (res non dom). One of the reasons they come, is that they are prepared to pay tax, but they don’t want the hassle of disclosing overseas income. It involves complicated computations to offset tax in other countries. At the end of the day it’s a bit of a nightmare and they may well just turn around and go somewhere else. The result is that Britain loses out on taxable income and wealthy people supporting our general economy.”
MI’s: Mobile individuals.

We all have a plethora of mobile devices and regularly read about mobile working and virtual offices but mobile-individuals are another trend John can see on the rise. “A lot of people are working in the consultancy field, are highly paid and aren’t finding it necessary to have proper offices or secretaries. They can work from a phone, handheld device or Blackberry and do so just as easily on a plane as on the ground which gives them an opportunity to do away with a presence in any particular country. If they don’t have a tax presence here it’s difficult for the tax authorities to latch on to them and make a tax claim stick. They can organise themselves so that they are not resident anywhere, spending broadly less than three or four months in any particular country.

Tax office gets slicker

Surprisingly John says dealing with tax investigations is always fun and seems to suggest it is fun with a capital F. As this seems contrary to normal logic, I probe further. “It’s because there is quite a lot of technical argument. The revenue are very good on the law of tax and on statutes and important cases. So you deploy plenty of legal argument as a first stage. The second and final stage is about bargaining and ‘horse trading.’ , John is rather respectful and supportive of their approach. “They are commercial and will come to some pragmatic deal. They are very professional the says although there was certainly a time when some of the tax people who dealt with wealthy foreigners, used to literally kick their doors down and demand tax. They operated like a cowboy outfit and a law unto themselves. Those people have gone but this makes them tougher to deal with.”

John’s skills aren’t limited to private taxation because he believes like many counterparts that it’s important to have a breadth of skills. “I do quite a lot of business and corporate tax because client affairs frequently involve companies and sometimes VAT issues.” He continues with a view on the industry segmentation. “I think people are too specialised and those who advise wealthy non doms, will increasingly need to bring in corporate tax knowledge.”

Of Switzerland, John rates the law firm of Lenz & Staehelin very highly but says Homburger in Zurich is one of the “best and strongest commercial firms.” Although he concedes Homburger is more a corporate orientated law firm. “They have a lot of wealthy business clients and important individual clients. He confirms his point about needing corporate skills. “The European lawyers don’t make distinctions between private and corporate work. They get surprised when one week they send a personal client to us and the next week it’s corporate and people say they can’t deal with it. I had a client who was buying a flat here for £28million which was owned by a company and so normally it would be a straightforward transaction. He would buy the company and that would be it. Unfortunately for the client there was something wrong with the company he was buying. It meant the deal had to be reengineered which threw up complex tax, stamp duty and land issues. Accountants couldn’t advise on that sort of problem and many private client lawyers would have thrown up their hands in despair. Our general knowledge of business tax meant we could deal with it. We undoubtedly saved the client about a million pounds in tax on that deal which had gone seriously wrong.”

Philanthropy is the word of the year so I ask John about a comment I heard from another charity expert who mentioned that worthy causes have become a quick route into local acceptance at a high level for incoming super rich. John agrees but says that one of the things which has caused him most professional satisfaction in his career was when a client, ploughed back tax savings into charitable projects in India and used his management skills to ensure that it was spent with much better effect than had the money gone to HM government.
John offers a set of pointers that ultra wealthy clients should think about before entering Britain. “Firstly I think it’s very important that they get everything set up before they come here. They have to plan from the outset. Secondly, they should never have any meetings with the tax authorities themselves without their advisers. The tax office will try and have meetings but it is fine to say no.” He tells a rather alarming story. “There is an expensive street in Holland Park that was targeted by tax officials who knocked on every house. They would talk to unsuspecting gardeners and house keepers and ask about the owners and how many times they visited and if they were running businesses. They were systematic and went to every house. A client called me and said ‘they are banging on my door and want to interview me’. I said the tax people have no right to have a meeting with a tax payer unless the tax payer allows it, so send them away.”

John concedes that Farrer's weren’t seen as an international firm a decade ago. “They were very much UK families and landed estates. He started up the international private client side and it has really mushroomed.

And a final word? “In some parts of the private wealth market there is a move towards a broad brush approach in running the affairs of wealthy international people, but many overlook precise technical detail of our tax rules. It is vital to give proper tax advice to the resident non dom. Some think “if we can get it more or less right, the revenue won’t attack the arrangements.” It is the wrong way to go about it. You must get it correct down to the finest detail. The clients can then sleep well at night.” ©

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The biggest Chicago divorce settlement ever (June 07) - over $180mn

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Michael Polsky an energy tycoon from Chicago, USA but originally born in the Ukraine has been asked to pay over $180 mn to his now estranged wife Maya, who filed for divorce in 2002 after a thirty year marriage. Howard Rosenfeld, her attorney was named by Chicago Magazine as one of the Toughest Family Law Attorneys in Chicago. The pair arrived in the US with only $500 in their pockets in 1976.

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The Merrill Lynch Cap Gemini World Wealth report summary

The ranks of wealthy private investors are growing. Not only that, they better understand world markets and are more active in managing their portfolios, according to the latest World Wealth Report from Merrill Lynch and Capgemini.

The sector is growing faster than in recent years. The number of European individuals joining the ranks of wealthy investors rose substantially in 2006, but not as fast as those investors from emerging market countries, who are becoming more prominent.

At the same time, the report details ever clearer patterns of how the wealthy are becoming more ambitious with their investment choices and more sophisticated in their understanding of the markets.

This means that for firms serving private clients, like Merrill Lynch, simply keeping up with the changes in tastes is no longer good enough. We also have to anticipate the individual needs of this ever more important group.

World wealth accelerates 2006 marked a return to growth in private wealth. Worldwide, the number of people with more than US$1 million in net investable assets grew by 8.3% to 9.5 million. Assets held by these high net worth individuals (HNWIs) grew by 11.4% year-on-year to US$37.4 trillion. These strong gains followed a slowdown in growth in 2005.

Wealth continues to consolidate with the assets of the ultra high net worth individuals (those with net investable assets of more than US$30 million) outpacing the wider HNWI population.
Fuelling this strong performance was the powerful combination of robust GDP growth and gains in world stock markets, as market capitalisations accelerated in most regions of the world.

Mature European economies including Germany, France and the United Kingdom saw significant uplifts in real GDP growth. Key emerging market economies, notably China and India, managed to improve on already fast-paced economic growth.

The Dow Jones World Stock Index grew by 16.4% in 2006 compared with 9.5% in 2005. HNWIs took advantage of booming stock markets in Europe, Asia Pacific and Latin America. For example in Asia, the Shanghai/Shenzhen market capitalisation grew by 220.6% - largely due to new companies floating.

European wealth hits US$10 trillion Europe enjoyed its strongest year of wealth growth since 2000 with total high net wealth reaching the benchmark level of US$10 trillion, thanks in part to greater business confidence.

Numbers of HNWIs in the region grew by 7.8%, easily surpassing growth in the previous 12 months of 4.9%. Among the EU 27 nations the high net wealth population grew by 6.4% - comfortably ahead of gains in 2004-2005 of 4.6%.

GDP growth levels in the EU, while not spectacular, were a significant improvement on 2005. Italy, for example, moved from stagnation (0.1% growth in 2005) to growth of 1.7% in 2006. More tellingly, economic sentiment in November 2006 reached its highest level since January 2001. For example, Germany’s IFO Business Climate Index in December 2006 hit its highest level since it was rebased in 2000.

Business confidence was a key factor in France and the UK where the high net worth population grew at faster rates in spite of slower stock market growth than 2005. France had 6% more HNWIs by the end of 2006 and the UK 2.7%.

Emerging markets gather pace HNWIs in emerging markets are growing at a pace that reflects the speed of wider development in these dynamic economies. Asia’s star performers were Singapore and India – whose high net worth populations each grew by in excess of 20%. India registered its 100,000th US dollar millionaire.

Russia’s wealthy population grew by 15.5% to reach 119,000. The United Arab Emirates saw its high net wealth population grow by 15.4%. Both countries benefited from the high price of fossil fuels. Russia was also boosted by the rapid development of its stock market. Many large state-owned companies had their initial public offerings and shares of several Russian banks more than doubled in value.

Africa, meanwhile, befitted from high commodity prices which boosted foreign direct investment in mining and exploration. The continent’s high net worth population increased 12.5% and wealth grew by 14%.

Alive to market trends HNWIs demonstrated in 2006 just how nimble they have become, shifting portfolios to adapt to prevailing market. After the rush towards alternative assets, such as hedge funds, in the earlier years of this decade, wealthy investors took a sizable step back in 2006 responding to relatively poor performances by such assets as hedge funds. They liquidated large quantities of these investments and increased allocations to the real estate market, taking advantage of a surge towards record prices in the sector.

Allocations to alternative assets halved – from 20% of HNWIs’ financial assets in 2005 to just 10% last year.

Though superficially significant, Merrill Lynch believes that this was a tactical move by HNWIs, rather than a long term movement from assets such as hedge funds, commodities, foreign exchange and structured products. Merrill Lynch projects allocations to alternative investments to climb back to 13% in 2008.

Just as they spotted the dip in alternative assets HNWIs around the world identified the opportunities for higher returns in real estate, shifting allocations to 24% of portfolios, up from 16% in 2005.

They did so as commercial real estate prices shattered records in 2006, largely due to a wave of consolidation among US real estate companies. Furthermore pension funds, foreign investors, real estate investment trusts (REITs) and private equity funds drove prices skywards as they competed for the same real estate properties.

Returns on REITs, funds that buy and manage income-earning property, outperformed equities for the seventh year in a row. The US Real Estate Index made gains of 34.4%, up from 8.3% in 2005. HNWIs are more resilient than others to dips in residential property prices. They typically hold half of their real estate assets in second homes without mortgages – leaving them far less exposed to higher borrowing rates.

As well as showing adaptability, HNWIs are acquiring a greater taste for less familiar markets. North American investors in particular are becoming more global, driven by greater awareness of international developments, better portfolio performance and risk management. Wealthy North Americans increased allocations to Europe, Asia-Pacific and Latin America. They now invest 27% of assets outside domestic markets compared with 22% in 2005.

Taste for SRI

A third important trend among wealthy investors is their increasing consciousness of social and environmental concerns. More HNWIs want to invest in companies and financial products that share and reflect their concerns.

Globally, socially responsible investments form 8% of the HNWI asset pool. Investors in Asia-Pacific lead the way with a 14% allocation to SRI. North American and Middle Eastern investors allocate 8% while Europeans allocate a below average 6%.

More than 160 investors, investment managers and corporations representing US$5 trillion in assets, had by the end of 2006, signed up to the “Principles for Responsible Investment” – a project co-ordinated by the United Nations that seeks to raise environmental, social and governmental issues among investors.

Increasingly, it is becoming easier to find opportunities to invest in and support green technologies. Large institutions, such as corporations and venture capital firms are backing development of new fuels such as ethanol and fuel cells. Globally, more than US$70 billion was invested in green technologies in 2006, up 43% on the previous year.

Lessons for the industry

What is crystal clear from the report is just how important it is to listen to investors. Financial firms serving this dynamic community have to pay acute attention to the ever more specialised needs of their clients.

From the lower wealth bands to the richest, clients across the board agree that good service quality more than any other factor keep them loyal to a wealth management firm. Furthermore clients rely heavily on advice and recommendations from friends and family in choosing a wealth manager.

Listening to and taking the effort to learn more about their clients is putting wealth managers in a better position to the identify new and more adventurous investment opportunities that investors appear increasingly to want.

Successful, dynamic approaches to wealth management include segmenting clients in a more sophisticated way than simply by assets under management. Interests, cultural background and financial behavioral attributes are important factors in aligning clients with the right products.

Secondly, firms must constantly assess whether their product range and approach is good enough to keep their clients happy over the long term. Their strategy must keep up with the market.

Thirdly, as technology evolves rapidly firms must take care to ensure they are delivering services through the channels that clients want. Some might want a single advisor, others prefer teams. Some like online private banking while others prefer to speak to someone on the phone. These preferences do not tend to correlate with specific levels of wealth.

By following these ideas, financial services firms can aspire to strengthen client relationships, increase investment activity and, ultimately, build a richer bond with their wealthy clients. ©

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