Women should be at home taking care of their children, some of the executives said they had been told over the years by Jay Welker, president of Wells Fargo’s private bank and head of the wealth-management division since 2003. Qualified women had recently been turned down for several top roles that went to male applicants. When the women raised concerns, they felt ignored.
The meeting represented most of the 12 regional managing directors in wealth management, out of 45, who are women. Above them, all seven senior managing directors overseeing regions are men. The other senior wealth-management roles held by women are positions that, because they don’t run a line of business or oversee profits and losses, lack the same prestige and responsibility that comes with making money for the bank... Some of the executives said part of the investigation focuses on at least one formal human-resources complaint against Mr. Welker over gender bias. Some of the executives said Mr. Welker often called women “girls” or told them to put their “big girl panties on.”.. The “meeting of 12” and the internal investigation show how the #MeToo movement, which has shaken up Hollywood, politics and business, is spilling into a broader discussion about whether women are being fairly promoted into senior roles where they can influence an organization’s culture.The conversation is particularly acute in industries that, like wealth management, have long been dominated by men.. Wells Fargo’s wealth and investment management unit, which includes the wealth-management division, was already in tumult before the gender bias investigation. Whistleblowers have alleged that financial advisers there pushed clients into products or investing platforms intended to generate more revenue for the bank and bigger bonuses for employees rather than the best returns for customers
A sociologist realized that if she were ever going to understand global inequality she would have to become one of the people who helps create it. So she trained to become a wealth manager to the ultra-rich.
.. Few outlets, however, noted the professional interventions that made that happen: Mitt Romney employs at least one wealth manager to create and maintain those offshore shelters.
.. Without breaking any laws (for the most part), they enable their clients to sidestep many laws and policies—especially those designed to prevent the kind of neo-feudal concentrations of wealth emerging now.
.. In designing my own research strategy, I was particularly inspired by the work of John van Maanen—now a professor at MIT’s Sloan School of Management—who famously did his doctoral research on a California police department in the early 1970s, not long after the Watts riots.
.. Like van Maanen, I disclosed my real name, institutional affiliation, and research aims throughout the research process; I did not, that is, go “undercover.” Whether I was attending classes or professional society meetings, I always wore a name tag that included my place of work, so it was clear that I was a scholar linked to a research institution.
.. Finally, people in a technically complex profession—especially one that carries some degree of social stigma—don’t have many opportunities to vent about their work lives with anyone: Their family and friends are unlikely to understand the nature of the work, and with professional peers, there would always be concerns about giving away “trade secrets” or violating client confidentiality.
.. a domain of libertarian fantasy made real, in which professional intervention made it possible for the world’s wealthiest people to be free not only of tax obligations but of any laws they found inconvenient.
.. Looking at a costly divorce? No problem—just hire a wealth manager to put your assets in an offshore trust. Then the assets are no longer in your name, and can’t be attached in a judgment.
.. No litigant on earth has been able to break a Cook Islands trust, including the U.S. government
.. virtually all of them saw themselves as misunderstood good guys.
.. they portrayed themselves as protectors of elderly clients from rapacious heirs, facilitators of development finance to emerging markets, and quasi-family members to wealthy parents seeking advice on how to prevent their children from being destroyed by idleness and easy access to drugs... “The secret point of money and power is neither the things that money can buy nor power for power’s sake…but absolute personal freedom, mobility, privacy.”.. the professionals ensure privacy for their clients. They keep the wealthy out of the newspapers and off the radar of regulatory authorities as much as possible... make it possible for the wealthiest people in the world to gain all the benefits of society, while flouting its laws.
They know more about their clients than the clients’ own wives. They are loyal in the face of appalling behaviour. They are the brains behind the most ingenious tax avoidance schemes. And there are more of them than ever
.. These professionals not only shelter wealth from taxation but, in the words of one academic paper, serve to “obscure concentrations of economic power”, using vehicles that make it difficult, if not impossible, to identify the true owners of wealth.
.. In 2003, the now-retired Democrat senator Carl Levin complained to a US Senate subcommittee about the asset-holding structures created by wealth managers to obscure their clients’ assets: “Most are so complex that they are Megos – ‘My Eyes Glaze Over’ type of schemes. Those who cook up these concoctions count on their complexity to escape scrutiny and public ire.”
.. As world wealth has grown to record levels in recent years – to an estimated $241 trillion – inequality has also grown, with 0.7% of the global population owning 41% of the assets.
.. Doing so involves creating not just asset-holding and tax-avoidance structures but a new body of transnational institutions, which are expanding outside of any democratic process of checks and balances. In this way, the rise of the super-rich and the wealth management industry is creating an elite who are increasingly ungoverned and ungovernable.
.. the Channel Islands tax haven of Jersey had detained, deported, and ultimately banned a reporter from Newsweek magazine for investigating claims of illegal activity there.
.. Remarkably, the local financial authorities were so well connected that they managed to bar the reporter not only from re-entering Jersey but also from entering the United Kingdom, period.
.. The super-rich are often extremely sceptical about the motives of people around them. “People who have a lot of money can become very suspicious and isolated,” Robert, who works in Guernsey, told me. “They become convinced that everyone who meets them is trying to take advantage of them.”
.. A century ago, wealth managers’ clients were known collectively as “the leisure class”, a group that probably numbered in the low four figures, concentrated in North America and Europe. These days they are far more diverse, and distributed all over the world. Today’s client base includes the world’s 167,669 “ultra-high-net-worth individuals” – people who, according to the 2014 World Wealth Report by the management consultancy Cap-Gemini, have at least $30m in investable assets.
.. their role is to be “part lawyer, part tax adviser, part accountant and part investment adviser all rolled into one”. For international transactions, wealth managers also need to assemble and coordinate a team of advisers. In this sense, wealth managers are more like general contractors: responsible for executing the client’s strategic plan, but reliant on a team of subcontractors for highly specialised parts of the job.
.. This trust-corporation configuration allows assets to be transferred back and forth in what Forbes once characterised as a “shell game extraordinaire”. Skilful wealth managers can use tools such as trusts, foundations and corporations to thwart the aims of the state almost indefinitely, without breaking any laws.
.. Bruce, an American working in Geneva, said that his primary source of job satisfaction was the “intellectual challenge of playing cat and mouse with tax authorities around the world”.
.. But a much more common reason that wealth managers give for enjoying their job is that it is not just intellectually challenging, but emotionally fulfilling.
.. On the Arabian Peninsula, they are now routinely asked to mitigate the disadvantages that Islamic law imposes on the inheritance rights of daughters. Since sharia also tightly limits testamentary freedom – the degree to which individuals can choose how their assets are distributed after their death – those who wish their daughters to have an equal share of the family fortune must find offshore alternatives.
.. almost every participant in the study mentioned “helping families” as a major source of satisfaction.
.. Within the world of wealth management, being obliged to honour debts, pay the costs of government, and otherwise obey the laws of the land are often seen as offences to liberty. One training textbook describes the claims of creditors as “risks”, rather than obligations that borrowers take on voluntarily. Other threats include the legal system itself, regulation and, of course, taxation.
.. In Treasure Islands, his study of offshore financial centres, Nicholas Shaxson describes this as a world of “members of ancient continental European aristocracies, fanatical supporters of American libertarian writer Ayn Rand,
.. The economist Gabriel Zucman has argued that the offshore financial system has grown to the point that it calls into question the future of national sovereignty. His argument is based primarily on tax avoidance, which he calls “theft pure and simple”. By allowing taxpayers to steal from their governments to the tune of $200bn in worldwide lost tax revenue each year, he argues, wealth managers dramatically undermine the power of the state.