Donde Esta La Biblioteca? Where Did All the International Friendly Firms Go…Into the Archives?
Large global banks used to view international wealth management as a key growth driver, however, over the last decade it has become a business division that is merely tolerated. Why the change in strategy? Over the past ten years, adhering to rule 405 “Know your Customer”, the heightened scrutiny of the Patriot Act and the Bank Secrecy Act clearly started eroding the appetite for onboarding International Clients.
There has been a whole host of contributing factors which all revolve around risk that was demonstrated and played out in the financial crisis of 2008. The fact that most of the wire houses were bought by banks after the meltdown and the increased restrictions on banks brought on through the 2010 Dodd-Frank laws was the biggest. This law severely restricted the bank’s ability to take on risk and created harsh penalties for not implementing and properly policing anti – money laundering policies. As a result many firms cut back on the ability for advisors to do International Business. They raised asset levels required of International Clients to mitigate the increased cost of risk. Some firms forced advisors to become designated International Advisors through increased training and understanding of all the rules and regulations. Those advisors who did not qualify were forced to turn over their international clients to other advisors with the designation. Several took the draconian step and shut down International Business altogether.
The solicitation policies of individual countries have also had a dramatic impact on advisors in the US trying to service foreign clients as well. Each country has its own set of rules on acquiring and servicing clients which means Advisors must adhere to them or their firm will pay the penalty and several of the big firms paid large ones. Therefore, the firms need a much higher level of comfort that their advisors know the rules and will stick to them. The penalties and pressure of risk to the other business lines in these banks for violating the solicitation outweighed the revenue. The herd mentality, a staple of Wall Street for decades, kicked in and just about every firm reigned in or completely exited the International Business.
In the midst of all this one firm stands out, Laidlaw and Company, we have planted that International Flag in the ground stating that we not only welcome International Business, but want to grow it aggressively. What do we know that all the others don’t? Laidlaw & Co (UK), through its affiliate Laidlaw International, is registered with the FCA in the United Kingdom. This gives us access and abilities that other firms do not have. The FCA license means our advisors can solicit and serve clients abroad unencumbered. In fact, Laidlaw has the ability to service clients in most countries and in multiple different currencies. Laidlaw and Company is a 175 year old firm founded as one of America’s first Investment Banks and we have been involved in the International Business for decades. Offshore clients have access to Laidlaw’s U.S. based Corporate banking deals via private placements, IPO’s and secondary offerings. Additionally, Offshore clients have access to Proprietary Private Equity Offerings.
Laidlaw is an Independent – Employee Owned Firm, not a bank, therefore we are not subjected to the extra restrictions that banks are.
In Laidlaw’s case La Bibloteca esta en NYC, San Francisco, Boca Raton, & London!