The Financial services industry has become a huge selling machine instead of being at the service of customers. From inside I have seen this evolution accelerating towards the end of the 1990s.
I began to suspect that the independence of bankers was under threat amid mounting pressure to sell commission-based financial products.
I am not alone. Stephen Diggle, co-founder of the multi-billion dollar hedge fund Vulpes Investment management, famously set up a family office to manage his share of the $2.7 billion that he earned for investors between 2007 and 2008, rather than entrust his wealth to private bankers. Justifying the move, he complained that there was a “significant problem of alignment of interests” between private banks and their clients, adding that private bankers had ceased to be custodians and had instead evolved into product salesmen.
The structural shift in the way wealth is being created presents opportunities for many. However the industry is still...