So is globalization coming to your corner of the world? Rich Brueckner, the chairman and CEO of Pershing LLC, notes that investors "want to take advantage in two ways of the globalization of the investment process. One is by investing in emerging markets, and investing directly in stocks overseas that they might not easily have access to in the United States. Second, they want to diversify across currencies." Many of Pershing's clients, says Frank La Salla, managing director in charge of Pershing's Global Securities Services, are "looking for alpha in a pretty tough market, and they're looking for risk diversification. That's what international can do for you."
It's more than just investing, however. Brueckner suggests that while there will be country-to-country variance, "it's likely that the financial services distribution marketplace will evolve like it has in the United States." That means "more sophisticated and educated" clients will want a "more holistic view of their net worth and how it connects to their lifestyle."
La Salla recalls how he and Pershing Advisor Solutions CEO Mark TIbergien were in Prague on April 28 for a convention of independent financial advisors, mostly from Europe, and "you could see the trend growing." Even American's tendency to be insular may be threatened. Brueckner says that it was an "eye-opener" to many people in the American investment world when capital raising in other markets exceeded that of the United States a few years back. "When John Thain, CEO of the NYSE, made that a major platform for the exchange's activity," recalls Brueckner, it "caught on in the SEC as well." Americans in the investment world are waking up, says Brueckner, "to the fact that there are certainly opportunities overseas and we have to adapt; otherwise we'll lose the position that we have as the center of the capital markets."
Other countries around the world, says Brueckner, may be "playing catchup a little bit in creating a capital markets infrastructure that we have mastered pretty well here, but we're going to be playing catchup in being part of the world economic and political system in which those countries are more facile."