Wealth Managers: Who They Are, What They Do

With more than 20,000 members worldwide, the London-based Society of Trust and Estate Partners (STEP) has been around since 1991. But who are they?  

 

“He is surrounded by a mysterious halo of family confidences, of which he is known to be the silent depository”

~Charles Dickens, ‘Bleak House’

“With these words, Charles Dickens introduces one of his most memorable characters: Mr. Tulkinghorn, the villain of Bleak House. Tulkinghorn is a lawyer specialising in trusts and estates, making him privy to the private lives of Britain’s nobility. A master of legal intricacies, Tulkinghorn’s emotionlessness, unreadable facade gives him a reputation much prized by his clients for protecting their secrets, as well as their fortunes.

Though he is their employee, Tulkinghorn wields a power that quietly controls the lives of his clients...Tulkinghorn’s knowledge of the families’ innermost workings makes him their master. Such “inside outsiders” deserve more scrutiny than they have received, given their role in managing large capital flows at the boundary of private family life and the public worlds of law and the market.”
~Brooke Harrington, ‘Capital Without Borders: Wealth Managers and the One Percent’

So begins the introduction of Brooke Harrington’s ‘Capital Without Borders’. As it turns out, there is very little information out there about the people who manage the trusts, funds and assets of the super-rich. Brooke Harrington spent nearly eight years studying this little-known group, including two years training to be a wealth manager herself.

If you try to find information about these people and their practices online, there are a few very recent studies and not much else. Brook Harrington sets out to remedy this situation.

“I know of no other book even remotely like it.”
~John L. Campbell, Dartmouth College

So why should we care?

Wealth managers work in an international playing field, shopping around for countries with the best tax breaks, the best political and regulatory conditions for their clients needs. They manage funds that are so big, some of them are bigger than the wealth of nations.

We should care because this kind of capital has an immense impact on state structures and the economy.

“The relationship of wealth management to states and their legal systems is surely one of the most distinctive features of the profession…the work of wealth management thrives by exploiting states’ power – sometimes opposing it, sometimes supporting its development in different directions. This does not mean that wealth managers are anti-state or anti law. They have no reason to be: in fact, it would be counter-productive to dismantle state structures, because “creative compliance” is the main source of their power as experts, and the basis for their remuneration.”
~Brooke Harrington, ‘Capital Without Borders: Wealth Managers and the One Percent’

So what does this mean? It means wealth managers get paid on the basis of how well they exploit the system to protect the wealth of the one percent.

They are involved in and influence many areas of life:

“Wealth managers will be the focus of this book because their work constitutes what the French anthropologist Marcel Mauss called un fait total social – that is, “a total social act,” bringing together all the major institutions of a society. Their remit is both technical and social, touching on finance and the family as well as on the role of the state and organisations. It also affects many issues of contemporary debate, such as inequality, taxation, and globalisation. One observer has described it as “the most complex role in any field of financial or political life””
~Brooke Harrington, ‘Capital Without Borders: Wealth Managers and the One Percent’

How Does One Train to Become a Wealth Manager?

There was no degree available in wealth management until very recently. So their number was drawn from a pool of other professions. Layers, accountants, financiers and the like.

A very broad set of skills is required to be a wealth manager, and can be seen as a “professional milieu coming together and in the process of being organised” (Michel Pincon & Monique Pincon-Charlot, ‘Grand Fortunes’). But in 1991, the London-based Society of Trust and Estate Partners (STEP) was formed. It now has over 20,000 members worldwide.

They have an incredible amount of power and influence and go about their business unnoticed. They deserve our attention.

More on wealth management to come. Who they are, what they do, how they do it and what the consequences are for broader society. I’ll be taking notes and posting the information as I go through the book.

Until then, here’s an article to get you started:
https://www.theguardian.com/us-news/2018/oct/19/billionaires-wealth-richest-income-inequality

You can get your hands on 'Capital Without Borders' from Harvard University Press here:

http://www.hup.harvard.edu/catalog.php?isbn=9780674743809

Or Amazon:
https://www.amazon.com/Capital-without-Borders-Managers-Percent/dp/0674743806

Or if you happen to be in Hobart, Tasmania like I am, I recommend Cracked & Spineless New & Used Books. Ask for Richard, he's already ordered it and knows where to get it. ;)