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  1. 1. Prof. William H. Byrnes, IV Page 1 of 10 Walter H. & Dorothy B. Diamond International Tax & Financial Services Program 2121 San Diego Ave. San Diego, California 92110 T +1 (619) 297-9700 x6955 F +1 (619) 374-6957 E wbyrnes@tjsl.edu I www.tjsl.edu American Academy of Financial Management & Indian Institute of Financial Management Wealth Management Trend 2010-2014 Positioning For the Next Wave? Prof. William H. Byrnes, IV Associate Dean, Graduate Programs Thomas Jefferson School of Law C +1 (619) 374-6955 Email wbyrnes@tjsl.edu
  2. 2. Prof. William H. Byrnes, IV Page 2 of 10 Walter H. & Dorothy B. Diamond International Tax & Financial Services Program 2121 San Diego Ave. San Diego, California 92110 T +1 (619) 297-9700 x6955 F +1 (619) 374-6957 E wbyrnes@tjsl.edu I www.tjsl.edu American Bar Association accredited institution member of the American Association of Law Schools contemporary and collaborative learning models meeting today’s employment requirements residential and/or online
  3. 3. Prof. William H. Byrnes, IV Page 3 of 10 Walter H. & Dorothy B. Diamond International Tax & Financial Services Program 2121 San Diego Ave. San Diego, California 92110 T +1 (619) 297-9700 x6955 F +1 (619) 374-6957 E wbyrnes@tjsl.edu I www.tjsl.edu 1. Conditioning Factors In my 900-page economic report on the international financial services industry, I examined and calculated the economic size and impact of the sector on local jurisdictions, and in doing so reviewed the global industry as a whole.1 But for the periods of global financial crisis, the sector had experienced double-digit annual global growth from the eighties and contributed robustly to the local economies and society. Since 1998, the international financial services sector client base has expanded nearly 10% on average. Even with the dampening of current global crisis, this industry is projected to grow in the high single digits over the next five years. During this decade period until 2008, the international pool of high-net-worth individuals (HNWIs) potentially served by AAFM® Chartered Wealth Managers® had more than doubled, to just over 10 million, as have their assets, from $17.4 trillion to between $40 and $50 trillion.2 By 2007, the average HNWI, excluding primary residences and collectibles, achieved an average of $4 million of worth! The financial recession of 2008 through the first half of 2009 and the corresponding collapse of U.S. investment banking system temporarily decimated the available high net wealth pool, reducing it to just under nine million holding $33 trillion in assets. Because of their substantial exposure to the U.S. economy and financial markets, the U.S. suffered the greatest impact, a loss of 18.5%, to its pool of high net wealth individuals and their overall wealth.3 Yet the end of 2009 has already seen a rebound for the high net wealth pool as markets have regained back nearly three-quarters of the lost ground of 2008 through March 2009. However over the next five years, for the assets of high net wealth individuals, financial forecasters expect positive growth exceeding 8% annualized. By 2013, the pool of HNWI clients’ assets will grow another 50% and at least exceed $50 trillion.4 70% of this new wealth is self- generated, either through entrepreneurship or via executive level employment, representing a “new” breed of HNWI versus the inherited wealth clients of the past.5 (Though the global re-calibrating of asset values may impact the nominal wealth value for HNWIs in the short term, historically, based upon both the recessions coined after the Asian Financial 1 Report on the Economic, Socio-Economic, and Regulatory Impact of the Tax Savings Directive and EU Code of Conduct for Business Taxation upon Selected Offshore Financial Centers as well as a Competitiveness Report for Selected Offshore Financial Centers (Foreign Commonwealth Office 2004). 2 Cap Gemini Merrill Lynch World Wealth Report 2008 calculates $40.7 trillion. However, see Oliver Wyman’s The Future of Private Banking: A Wealth of Opportunity? (2008) at 9 wherein using its own wealth model and reliance upon data from the OECD, IMF, WFE, UNECE, national banks and stock exchanges calculates $50 trillion. 3 Cap Gemini Merrill Lynch World Wealth Report 2009, p.2. Note the U.S. is still responsible for nearly 29% of global HNWIs at $2.5 million. 4 Though the global re-calibrating of asset values may impact the nominal wealth value for HNWIs in the short term, historically, based upon both the recessions coined after the Asian Financial Crisis and the Tech-Bust, the wealth value will likely return to projected levels with a two-year lag. While equity and real estate markets may have declined by January 2009 by as much as 50% of their highest value in OECD countries, HNWI portfolios are spread among other investments without such a sharp plunge. A reliable decline in value estimate for HNW is 25% based upon the decline experienced in Switzerland, which accounts for 28% of the global asset management market. See the report Wealth Management in Switzerland, Swiss Bankers Association (2009) at 8. 5 The Future of Private Banking: A Wealth of Opportunity?, Oliver Wyman (2008) at 21
  4. 4. Prof. William H. Byrnes, IV Page 4 of 10 Walter H. & Dorothy B. Diamond International Tax & Financial Services Program 2121 San Diego Ave. San Diego, California 92110 T +1 (619) 297-9700 x6955 F +1 (619) 374-6957 E wbyrnes@tjsl.edu I www.tjsl.edu Crisis and the Tech-Bust, the wealth value will likely return to projected levels with a two-year lag.) Since 1998, while the OECD continues to steadily generate HNWIs and their wealth, the substantial jumps in wealth generated and new HNWIs is and will continue to occur in Asia (China and India) and to a lesser extent in Latin America (Brazil) and the Middle East (GCC). Based on the shifting geo-wealth creation pool, our new breed HNWI is more likely to be of Asian, Middle Eastern, and Latin American nationality, with a very different frame and perspectives from our OECD HNWI. HNWI’s continue to leverage offshore skill sets, growing their assets from $5.8 trillion from 1998 to an estimated $8 to $11 trillion today.6 That $11 trillion under management represents, at combined fees for all wealth management services of just 1%, approximately $100 billion accrual to wealth management firms and their providers, such as asset management and investment banking business units.7 The wealth management industry remains very fragmented, with likely even greater fragmentation on the horizon. The global top ten wealth management firms manage less than 20% of high net wealth assets.8 50% of HNWIs do not use wealth managers.9 6 Tax Haven Abuses: The Enablers, The Tools and Secrecy” (Sen. Rep., Perm. Sub-Comm. On Investigations, August 1, 2006) and World Wealth Report 2008 estimate $11 trillion. However, the Oliver Wyman Report which surveyed 25 top firms provides a lower estimate of only $8 Trillion offshore at 16% of HNW assets (see page 3) and the Swiss Bankers Association Wealth Management in Switzerland 2009 report (see page 4) supports this lower estimation. A general survey of literature, by example IMF and World Bank reports, contrasted with data available from the Bank of International Settlements, has been inconclusive. 7 Note that the $100 billion estimate based upon the $11 trillion base may be an exaggeration of fees earned from offshore HNWI, the application of the 1% fee base is supported by the Senate Report 2008 at page 86, wherein it states that UBS earned $200 million on its $20 billion under management from its 19,000 non-compliant clients (i.e. 1%). 8 The Wealth Management Report 2009 Meeting the Expectation of UK High Net Worth Clients JP Morgan at 11. 9 The Future of Private Banking: A Wealth of Opportunity?, Oliver Wyman (2008) at 4.
  5. 5. Prof. William H. Byrnes, IV Page 5 of 10 Walter H. & Dorothy B. Diamond International Tax & Financial Services Program 2121 San Diego Ave. San Diego, California 92110 T +1 (619) 297-9700 x6955 F +1 (619) 374-6957 E wbyrnes@tjsl.edu I www.tjsl.edu The international-offshore financial service industry’s wealth management level employment has probably reached and maintaining 100,000.10 CFA® estimates over one-million employment globally for its segmentation of financial analysts (based on its global spread of its 100,000 members).11 The current stability with wealth management employment is in contrast to the instability in investment banking. Investment banking, including securities dealing, employment has fallen from a high of 156,113 in 2006 to a low of 97,500 in 2008, but will stabilize this year to 100,425.12 Financial planning and investment management services are now delivering a larger portion of an institution’s income, up to 12% from 5% in the late 1990s, as investment bank services and trading commissions have correspondingly fallen.13 4. Trends of New-Breed HNWIs From 2006, Cap Gemini’s polling has identified several long term trends that continue to appear to drive a general re-allocation and opportunities for wealth managers to acquire clients.14 By example of asset re-allocation, in 2006 HNWI clients reached 20% alternative investment diversification for their portfolios, up from just 3% in 2000.15 HNWIs, and in particular the new breed HNWIs, are increasingly globally informed about investment opportunities and risks. Thus, HNWIs are undertaking their own research of information and expecting a collaborative process with their advisors. HNWI’s are demanding firm’s investment teams develop and use global strategies and products to hedge local risks16 , by example allocating to the continuing emerging markets of BRIC (though 2009 has seen this become BIC). As to be expected based upon the short term drivers of the recession, recalibration of asset values, failure or quick-sale of numerous global financial institutions, and tremendous investment fraud scandals by prominently respected institutional individuals, 2009 has seen tactical, if not forced, re-allocation. Ellen Kelleher this month reported in the Financial Times that HNWI are commonly dissatisfied with private banks pitching structured products “with high charges and confusing terms”.17 Citi Private Bank’s survey covering its wealth managers for 2,000 HNWI and UHNWI found that this year almost 90% of their clientele have reduced or substantially reduced their exposure to equities and nearly all have shied from hedge funds, citing transparency and stability as the value drivers of their allocation decision.18 The World Economic Forum proposes that future alternative investment classes offering beta return to HNWI portfolios may include (1) infrastructure finance, (2) intangible assets (such as intellectual property), (3) research and 10 With regard to the offshore employment estimate, see by example my 2004 Report, and the 2009 Swiss Banking Association report at 10. A survey of reports and articles written up until April 10, 2009 finds that the wealth management industry has NOT suffered the significant job losses as a whole as the financial services industry has. By example, see Headhunter Boils Business Down to Wealth Management San Diego Business Journal March, 23, 2009 at 17 wherein a recruiter states “When times are good, services such as money mangers and financial advisers tend to get overlooked, but in tough times, customers are more inclined to professional help.” 11 See AAFM® annual report regarding its estimate. 12 IBISWORLD INDUSTRY REPORT: INVESTMENT BANKING AND SECURITIES DEALING IN THE US (Dec. 8, 2008) at 7. (Updated Jan 5, 2009). 13 IBISWORLD INDUSTRY REPORT: INVESTMENT BANKING AND SECURITIES DEALING IN THE US (Dec. 8, 2008) at 9. (Updated Jan 5, 2009). 14 All the reports cited herein addressing trends amongst HNWIs confirm the original trend recognition by the 2006 Cap Gemini Report. 15 Cap Gemini World Wealth Report 2006. 16 The Wealth Management Report 2009 Meeting the Expectation of UK High Net Worth Clients JP Morgan at 38. 17 The Big Money Prefers Smaller Firms, Ellen Kelleher, Financial Times (April 10, 2009). 18 The KnightFrank (Citi Private Bank) Wealth Report 2009 at 12.
  6. 6. Prof. William H. Byrnes, IV Page 6 of 10 Walter H. & Dorothy B. Diamond International Tax & Financial Services Program 2121 San Diego Ave. San Diego, California 92110 T +1 (619) 297-9700 x6955 F +1 (619) 374-6957 E wbyrnes@tjsl.edu I www.tjsl.edu development exposure, (4) mega-trends, (5) frontier markets, (6) distressed assets, and (7) insurable risk.19 Since 2006, new breed HNWIs in particular have been trending toward a lack of fidelity to their institutions and migrating sizable allocations of their portfolios to boutique (investment) firms and to multi family office operations.20 As of 2008, Cap Gemini noted that HNWIs were migrating toward a holistic service approach to their advisement. Scorpio Partnership’s Transforming the Worth of Wealth report found from its surveying that the general feeling amongst financial advisors is that investors are increasingly looking to transfer to service-based smaller boutiques as the economy weakens. Exemplifying the impact of this trend, Scorpio Partnership reported that the 25 brand name firms surveyed “posted less than 15 per cent growth in clients every three years, on average”. On the other hand, as of the third quarter of 2008, 83 US based multi family office firms managed $334 billion, which at that time represented 19% of total assets under management of the global hedge fund industry.21 Based on the 2009 disengagement from ‘opaque’ hedge funds by HNWIs, ‘transparent’ multi family offices will likely have made substantial strides toward closing the assets under management gap.22 When choosing from among wealth managers, HNWI apparently value branding and reputation, but size has lost its importance.23 5. Three Resulting Winners Amongst Boutiques Because the wealth management sector continues to out or evenly pace other sectors in terms of firms’ and employees’ earnings, certainly in light of the demise of some bonus schemes in the investment management business units, the sector has grown more competitive with new boutique firms entering monthly. Is there room for such increasing competition? According to the Oliver Wyman Report 2008, only 50% of HNWI assets are professionally managed or advised.24 Three types of boutiques have shown significant growth in the past six years. Firstly, investment team boutiques that create and manage internationally oriented transparent investment funds focusing on alternative investments, such as emerging market strategies. These boutiques appeal to both HNWI’s directly, competing with larger institutions, and to the institutions themselves, in collaborative arrangements. Secondly, family office firms employing holistic family business and tax management and lifestyle solutions, sometimes in combination with investment management services. Thirdly, compliance advisory service firms have been established to serve financial service providers. 6. Required AAFM ® s’ Skills Sets for New Breed HNWIs I propose that there is a correlation of well rounded “international” education and service perspective to a firm’s and professional’s economic success, and regulatory survival. Servicing modern HNWIs who now demand international elements for their families and their business 19 The Future of the Global Financial System, World Economic Forum’s World Scenario Series (2009) at 33. 20 Show them the Money, Economist Special Report April 2, 2009. 21 The Future of the Global Financial System, World Economic Forum’s World Scenario Series (2009) at 36. 22 The KnightFrank (Citi Private Bank) Wealth Report 2009 at 12. 23 The Future of Private Banking: A Wealth of Opportunity?, Oliver Wyman (2008) and The Wealth Management Report 2009 Meeting the Expectation of UK High Net Worth Clients JP Morgan. 24 The Future of Private Banking: A Wealth of Opportunity?, Oliver Wyman (2008) at 4.
  7. 7. Prof. William H. Byrnes, IV Page 7 of 10 Walter H. & Dorothy B. Diamond International Tax & Financial Services Program 2121 San Diego Ave. San Diego, California 92110 T +1 (619) 297-9700 x6955 F +1 (619) 374-6957 E wbyrnes@tjsl.edu I www.tjsl.edu interests requires a dynamic ability to obtain economic and regulatory information, understand the clients’ and the markets’ issues and inefficiencies, and create solutions. Steady HNWI high growth continues within the OECD members, but rapid growth in HNWI numbers will continue in the BIC countries of Brazil, India and China, and probably again after the valuation adjustment in Russia/Eastern Europe. The BIC countries, in particular Brazil because of its vast natural commodities base and recent discovery of what is probably the world’s largest offshore oil field, will continue to lead the world in both economic and HNWI growth. Thus, AAFM® members seeking to attract these HNWI, be in their home country, or in the USA, will evolve to provide services reflective of the needs of these BIC clients, as well as speak their local languages. The HNWI is seeking the one-stop shop model.25 The relationship manager must be able to source information and services leveraging a team approach, assimilate the pieces, and communicate it in a collaborative, transparent manner with the HNWI .26 AAFM® s must be able to employ a holistic and collaborative team approach for a HNWI including (1) business, (2) tax, (3) estate, (4) legal, (5) accounting, (6) intra-family governance, (7) philanthropy (8) compliance and (9) lifestyle issues, and communicate operations and solutions to the HNWI and family members.27 New breed HNWIs want communication by email weekly from their wealth manager. Sophisticated advisors will leverage secure, though inexpensive, video conferences to establish more efficient and effective face time. By example of collaboration and communication skills, the trusted advisor may need to source compliance and due diligence skill sets from risk management, compliance, legal, and audit team members in order to analyze a multinational business that a HNWI is targeting, synthesize the different jurisdictional regulatory requirements, and communicate effectively the team’s findings to the client via a video conference. Thus, education in these aforementioned skill sets, leading to a potential employee’s retooling, is a key to competing in today’s wealth management industry and job market. Moreover, ‘soft skills’ such as client communication, and even more relevant in this economic downturn, the ability to counsel through economic and personal stress, will decide for HNWIs who is to become trusted advisors, and who are simply hawking services. 28 At this point I now turn to address the specific soft-skills that are viewed critical by HNWIs and by US private clients in choosing their trusted advisors. As promised in the introduction, I will give away an out-of-the box soft-skill training secret that I will only mention to this AAFM® audience: MindFrame Persuasion – and how it will empower you to connect as the trusted advisor. 25 The Wealth Management Report 2009 Meeting the Expectation of UK High Net Worth Clients JP Morgan at 5. 26 The Future of Private Banking: A Wealth of Opportunity?, Oliver Wyman (2008) at 43. 27 In an interview with Dr. George Mentz, Chairman of the American Academy of Financial Management, who is consulted by the Department of Labor’s Bureau of Statistics for Financial Services employment information, he stated that the US wealth management market has seen a commoditization of financial product offering to private clients, thus requiring advisors to distinguish themselves upon other services. Asset protection, estate planning, business issues, Dr. Mentz said, are areas that advisors are now focusing on to attract clients. The Chronicle of Philanthropy reported that 2008 charitable giving did not substantially suffer, and in some cases increased amongst certain groups (112% amongst the 50 most generous US philanthropists). 28 See The Wealth Management Report 2009 Meeting the Expectation of UK High Net Worth Clients, JP Morgan at 11 and the section “Perspective” page 25.
  8. 8. Prof. William H. Byrnes, IV Page 8 of 10 Walter H. & Dorothy B. Diamond International Tax & Financial Services Program 2121 San Diego Ave. San Diego, California 92110 T +1 (619) 297-9700 x6955 F +1 (619) 374-6957 E wbyrnes@tjsl.edu I www.tjsl.edu Regarding an example of a neuro-linguistic persuasion course being leveraged by one major institution see MindFrame Persuasion http://www.mindframepersuasion.com/launch/ 7. Winning Strategy of the Holistic Service Model My forecast for an expanding and robust sector the past years has not been drawn from the conclusion of “what doesn’t kill you makes you stronger”, though I often lecture that “the survivors shall inherit the spoils”. Rather, I have examined the upward trend in expenditures by firms, and the sector as a whole, that allows them to the flexibility to adapt to changing climates and to evolve distinguishing services, such as the “well rounded, trusted advisors” trend required by new-breed HNWIs. By example, for ten years I have measured that growing firms increase investment in education and information, and an increase in these two areas support that firm’s growth. On the other hand, firms' declining revenues, by example through loss of clients and key staff, correlate to a reduction in education and information spending. In the 2008 poll by Robert Half's Accountemps of 1,000 top companies, 94% offered tuition benefits to their key employees. Naturally, this correlation begs the causation question of whether the decline in spending caused decline of revenues, the other way around, or some other factor caused both. In support of the winners investing in education that supports a holistic service model approach, this past year Cap Gemeni reported that “While most HNWIs and UHNWIs have relationships with multiple wealth management firms,many clients seek long-term “trusted advisors” who can help them navigate complex topics and strategies.” The trusted advisor must understand the HNWI “in the context of a larger relationship that encompasses personal and family finances as well as business partnerships or estate planning.” Most importantly for the employing firms of wealth managers, the Oliver Wyman study reinforced what is already generally known in the wealth management / private banking industry: the lifetime contribution value of an average private client under the European onshore model (the Advisory model) is three to four times than that earned from the US Broker/ Dealer model, while the European offshore client model - five times!29 The new breed HNWI will pay an asset under management (AUM) based fee for the trusted advisors holistic service, but prefers that the wealth manager employ this model dually with performance based fees – lowering the AUM fee but allowing a high blue sky for meeting and exceeding performance objectives. 8. Winner AAFM® s This AAFM® audience will not find the “trusted advisor” concept unique, and neither the family office that has gained so much attention amongst training companies the last seven years, as the “new” path forward. This is the way that the most successful AAFM® members’ firms have always provided service to their clients. Competency to offer these services has been assessed via the AAFM® examination. Also, and more dear to many of the AAFM® audience, Cap Gemeni reported that employing qualified talent will sharply increase because of the retirement of the baby boomer wealth manager generation. “Bidding wars among firms for top advisors are not uncommon” and that packages will include “bonuses equaling two or three times the payouts from just a few years ago.” As noted earlier, the industry career newsletter, Jobs in the Money, reports that credentialed professionals with certifications earn over 30% more than their colleagues. Also 29 The Future of Private Banking: A Wealth of Opportunity?, Oliver Wyman (2008) at 18.
  9. 9. Prof. William H. Byrnes, IV Page 9 of 10 Walter H. & Dorothy B. Diamond International Tax & Financial Services Program 2121 San Diego Ave. San Diego, California 92110 T +1 (619) 297-9700 x6955 F +1 (619) 374-6957 E wbyrnes@tjsl.edu I www.tjsl.edu referring to recent reports from recruiters, financial planner salaries are holding a steady range of $150,000 - $400,000.30 9. Threats to Profitability or an Opportunity to Restore Confidence? Financial service providers are required by the provisions of the USA Patriot Act to make substantial investments in technology (though many in the industry have questioned the effectiveness of these investments in preventing the funding of terrorist groups or other nefarious activities).31 Senior banking management perceives rising and unpredictable compliance costs that undermine global competitiveness as the most significant threats to the future growth of banking.32 Based on the survey of Miami banks significantly engaged in international banking, staffing costs rose to 271 full-time employees of anti-terrorism/anti-money laundering compliance for approximately $25 million in 2005. The average survey respondents indicated that it devoted 2.9 FTE employment positions to BSA/AML compliance in 2002 versus 6.8 FTE positions in 2005. The number of full-time employees devoted to compliance represented 9% of the workforce in 2005. Staff resources devoted to compliance increased by 160% between 2002 and 2005. The results have been that Miami’s banking industry has been characterized by contraction. The number of foreign bank agencies operating in Florida fell from 38 in 2000 to 31 in 2005, of which 7 did not book any deposits. There were 10 Edge Act banks operating in Florida in 2000, but only 7 in 2005. The number of international banking employees (in foreign agencies, Edge Acts and the international divisions of domestic banks chartered in Florida) declined from 4,660 in 2000 to 3,027 in 2005. While the cost of AML compliance increased around 71% in North America between 2004 and 2007, it rose 58% globally. 33 By example, in 2003, the UK’s FSA’s Anti-Money Laundering Current Customer Review Cost Benefit Analysis estimated the implementation costs of the AML regime to firms at 152 million pounds sterling, substantial by European standards though paltry by America’s. In a 2006 Economist Intelligence Unit survey, international senior bank executives were asked about the costs of compliance of government regulation. When asked what changes they expected in the regulatory environment over the coming three to five year, over 91% stated that they expected regulations affecting their institution to grow in complexity and breadth, 88% stated that compliance with industry regulations will become more onerous, and 81% reported that they expect penalties for non-compliance to increase in severity. On the other hand, perhaps more (or more effective implementation of current) compliance and its resulting governance would have protected against or softened the blow of the systemic iceberg as well as protected against or softened the blow of the most recent investment fraud scandals. And UBS’ level of compliance expenditure neither deterred its activity regarding 19,000 USA non-complaint persons, nor its substantial investments in US mortgages leading to write- downs requiring a Swiss government substantial investment to shore up its capital. Certainly, based on the G7 and G20 meetings, as well as the discussions at the World Economic Forum, 30 Headhunter Boils Business Down to Wealth Management San Diego Business Journal March, 23, 2009 at 17. 31 STANDARD AND POOR'S INDUSTRY SURVEYS: BANKING (Dec. 6, 2007). 32 The Washington Economics Group, THE ECONOMIC IMPACTS OF INTERNATIONAL BANKING IN FLORIDA AND INDUSTRY SURVEY: 2005. 33 KPMG'S GLOBAL ANTI-MONEY LAUNDERING SURVEY 2007.
  10. 10. Prof. William H. Byrnes, IV Page 10 of 10 Walter H. & Dorothy B. Diamond International Tax & Financial Services Program 2121 San Diego Ave. San Diego, California 92110 T +1 (619) 297-9700 x6955 F +1 (619) 374-6957 E wbyrnes@tjsl.edu I www.tjsl.edu levels of compliance expenditure, compliance education, and governance will be required to be increased in order to restore institutional confidence.34 Based upon HNWI clients seeking transparency, there may be an opportunity for AAFM® members / firms to market to stung HNWIs not just as well rounded advisors, but as trustable compliance and governance oriented advisors, collaborating transparently regarding developing the HNWIs portfolio of opportunities. 10. Information Tools Besides the army of lawyers advising regulated firms and the chartered accountants undertaking compliance, anti-fraud, AML, terrorist activity, and qualified intermediary (QI) audits, near and dear to myself, the publications market employment is continuing to grow. Because compliance regulations, costs, and penalties are growing more onerous, all regulated financial service providers and their advisors must purchase some information resource to address the variety of compliance issues encountered regularly. Moreover, to undertake the role of the ‘trusted advisor’, a sophisticated wealth manager must have a bundle of reliable resources enabling the holistic, international, business partner approach that modern HNWIs and UHNWIs now demand. Indication of this trend is that the legal, tax and regulatory publishing market has been and is growing consistently. Legal publishing is the largest segment in professional publishing, accounting for approximately 36% of the total market. In 2007, legal publishing revenue was about $10 billion, up 7.5% from $9.3 billion in 2006 and 14.9% from $8.7 billion in 2005. 35 Legal publishers are sparking growth by developing digital tools and software out of their reference book and journal content designed to make it easier for legal professionals to find information and automate mundane tasks. New online publishing will use mind-mapping technology to educate users about holistic connections amongst ideas, issues, and strategies. Growth in publishing for an industry tends to indicate growth in that industry. 34 See The Future Of Global Financial System, World Economic Forum World Scenario Series (2009) at 22. 35 Simba Information, GLOBAL LEGAL & BUSINESS PUBLISHING 2007-2008 (2007).

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