Barack Obama may be looking to boost marginal tax rates for the wealthiest 5 percent of Americans, but that doesn’t mean the wealthy are shunning the candidate, said Richard Feurtado, BlackRock’s head of wealth management in the account management group.
In fact, about 50 percent of BlackRock’s ultra-high net worth clients are Obama supporters, Feurtado said at the 2008 Reuters Wealth Management Summit in Boston.
“People do things for all sorts of reasons, and maybe one of them is financial, but there are many other reasons for people voting in certain ways,” Feurtado said.

The credit crisis may be hitting the man on the street hard, but spending by the “other half” on the latest super yacht or Damien Hirst work of art looks set to carry on relatively unaffected.

Super-wealthy individuals in commodity-rich areas such as Russia and the Middle East are reaping the benefits of a five-year boom in oil and other commodity prices.

Even though oil and commodity prices are now coming off sharply, the boom is still feeding through into their spending power, provided they haven’t done anything too risky with their cash in the meantime.

And it’s happening just when everyone else is cutting back on non-essentials.

“It’s like philosophy,” explains ING’s Deputy CEO of Private Banking Bernard Coucke.

“Philosophy always comes after a century of economic prosperity, never before. Spending always comes after prosperity, never before.”

Where is a good place to put your money in these volatile times?

Jennifer Tay, Managing Director and Head of Portfolio Counselling Investments for Asia-Pacific for Citigroup says she likes healthcare, infrastructure and utilities.

Click here to listen.

Raj Sriram, global head of the South Asia private banking arm of the Royal Bank of Scotland says to de-leverage and de-risk.

“Once there is some semblance of sanity to the marketplace, be in a position to look at what are fundamentally good opportunities from in a long term perspective. But for the short term be as static as possible, virtually do nothing apart from  de-leveraging and de-risking”.

The business of managing money for the rich has become “insanely competitive” and lost its rationality, a Philadelphia-based wealth manager warned. Some very large companies who have been hiring aggressively will find that they either don’t make money or they make less than they could if they invested in other areas, said Al Piscopo, chairman of Glenmede Trust Co. Speaking at this week’s Reuters Wealth Management Summit in Boston, he said that talk about the industry consolidating “is a myth” and that a takeover is often followed a while later by further fragmentation as wealth managers set up their own new businesses. Piscopo also questioned whether some of the big banks were getting too “gimmicky” and becoming more like “life-stage or lifestyle advisers” than wealth advisers.

We may be more than a year away from the U.S. presidential election but the nation’s rich are already getting prepared for a higher tax era by shifting their money into different assets, according to some wealth managers. There is already a lot of concern about the implications of the election and a change in the political and budgetary climate, says Gail Cohen, head of global wealth management at Fiduciary Trust Co. International.

In are: tax-exempt bonds, high-growth stocks, hedge funds, real estate investment trusts and ways of engineering tax-free gifts for offspring.

Out are: high dividend stocks, while investments already well in the money are more likely to be sold to avoid any additional capital gains hit. 

Bob Greifeld, Chief Executive of Nasdaq Stock Market Inc, does not seem like the sort to party hearty, but in 2004 he did. He organized a week-long trip to Ireland for more than 20 family members, which included custom-written songs, re-creations of a medieval village, and a gourmet menu designed to exclude cream and butter. There were 55 staffers to care for the guests.

Sound elaborate? Just ask the party planner who put it together. 

“That was over-the-top on steroids,” Gregory Patrick told the Reuters Wealth Management Summit.

Just finding a lead chef took 75 hours, Patrick said.

The event cost about $611,000, Patrick said.

More details on the event can be found in this Times of London story. The party is long over, but arguments about how much Greifeld has to pay continue. Patrick argued he was owed cost plus a gross profit margin of 38 percent, which amounts to cost plus 62 percent. Greifeld argued that he thought he owed cost plus 38 percent, and that Patrick refused to give him the DVDs documenting the event until Greifeld paid what Patrick said was owed. A New Jersey state judge ruled that Greifeld did not have to pay more money and Patrick had to turn over the DVDs, but Patrick is appealing that ruling.

Steven Cohen, a lawyer for Greifeld at Wachtel & Masyr in New York, said the written contract did not corroborate Patrick’s claims.

Wealth management firms, facing a shortage of talented advisers, are recruiting from industries like pharmaceuticals and software, where sales staff have mastered technical issues and used to selling to intelligent people, said Bruce Holley, a partner at Boston Consulting Group.

“You need intellectual capability to handle the discussion and understand the products. But you also need selling skills to interact with the clients and provide the client experience,” Holley said.

People in the pharmaceutical industry may not be experienced with wealth management, Holley said. But, “they have proven selling skills,” he added.  

Competition to provide wealth management services is intensifying, and the battle for top talent is leading to increased poaching and a rise in bonuses and other incentives as banks and other wealth managers try to prevent their best performers from defecting. “Somebody who is good in this space is highly sought after,” John Stadtler, a partner at Pricewaterhouse Coopers, told the Reuters Wealth Management Summit in Boston. Indeed, wealth managers are currently much more likely to poach relationship managers from rivals than train them themselves — part of the problem being that it can take a long time to develop the skills needed to deal with the highly demanding moneyed class. And they need to be served now!!!

The rich aren’t just interested in being nice to the environment, they’re investing and spending money to get their green credentials. From investing in sustainable and clean energy enterprises, to carbon offsets, some think this is just typical first-adopter behavior by the rich – much like how they started using mobile phones (or cars, air flight, electricity) before they became cheap enough for the masses.

    The head of the Japanese private banking arm of France’s
Societe Generale said on Wednesday he was considering forming alliances with some regional banks to help it expand outside Tokyo and the Kansai region, which includes Osaka.

“We already see an interest on the part of these banks to get
more involved in private banking. They do of course have
important clients which they need to serve in the best possible
way,” Alain Simon, president and chief executive of SG Private
Banking Japan, said at the Reuters Wealth Management Summit