Investment banking and wealth management are seen as distinct businesses within financial services, but there is more crossover than you might think. Simon Smiles, managing director and chief investment office for ultra-high net worth at UBS Wealth Management, says having investment banking skills makes for a better wealth manager. Smiles, who started at UBS in the research department of the investment bank, writes on efinancialcareers that there is a great overlap between wealth management and investment banking clients, especially when dealing with the ultra-high net worth, who have analysts working for their businesses (investment banking) and advisors investing their money as part of a family office (wealth management). He writes that the research, writing and marketing skills he gained in investment banking come into play regularly as CIO. “Of course, differences still exist between wealth management and investment banking,” he writes. “Even if they have family offices to guide them, wealth management clients are typically experts on the fields and countries in which they and their families have made their fortunes—not necessarily on global investment. And although many of them do make shorter-term trades, they tend to invest over longer time frames and scrutinize daily developments less intensively than investment bank clients.”
Retirement plan participants are increasingly worried about their financial situation. According to Bank of America Merrill Lynch’s 2016 Workplace Benefits Report, which surveyed 1,200 employees with 401(k) plans, six in 10 reported feeling stressed about their finances, up from half in 2013. Three-quarters said they don’t feel financially secure and more than half said they need help understanding how financial benefits work for them. Meanwhile, 83 percent say the workplace’s benefit plans are critical to financial security. The study also found that most workers are underestimating how much they need to save for retirement, and that health care costs tend to be the greatest barrier.
Betterment announced Tuesday that John Clendening, the former executive vice president and co-head of Charles Schwab’s investor services division, will join its board of directors. At Schwab, Clendening was responsible for growing the retail business, something that is more important for Betterment than ever after a recent round of funding valued the robo advisor at $700 million. Clendening is also the president and CEO of Blucora, a provider of tax preparation and wealth management technology.
One of the more baffling items to emerge from the Panama Papers scandal is what appears to be the widespread involvement of the International Committee of the Red Cross. The organization is named as a beneficiary of a number of the faux foundations set up by Mossack Fonseca to shield clients’ finances from scrutiny. It turns out this action was taken deliberately and without the group’s knowledge. (Panamanian law doesn’t require beneficiaries to be notified of their status.) As international transparency laws have strengthened, banks and other financial institutions are increasingly requesting information about account beneficiaries. So, instead of naming the actual beneficiary, Mossack used the ICRC (as well as the World Wildlife Fund) because it’s well known and information about it is readily available.