New York Could Lose Spot as World Financial Capital

In the next decade, New York may lose its position as financial capital of the world to a city such as London, Dubai, Hong Kong, or Tokyo, which all have a more market-friendly regulatory environment, a new study asserts.

A report from consulting firm McKinsey & Company and commissioned by New York City Mayor Michael Bloomberg and Senator Charles Schumer suggests that for New York to keep its position, the U.S. must reform its regulatory environment and immigration rules. The study asserts that the keys to competitiveness in the world market are: the availability of skilled people and a more balanced and fair legal and regulatory environment and that, in each of those areas, “the U.S. is moving in the wrong direction,’ making it less attractive to foreign investors. Specifically, the corporate governance rule Sarbanes-Oxley (SOX), is too complicated and expensive, it is difficult to attract qualified American and foreign workers, and the legal environment does not discourage frivolous securities litigation.

The study, “Sustaining New York’s and the US’ Global Financial Services Leadership,” suggests that ways to stem the possible tide away from Wall Street are to revise SOX, making it less costly for small firms to implement; reform securities litigation laws to make the environment more predictable; and ease barriers to skilled foreigners working in the U.S.

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If the current environment continues, McKinsey predicts that Wall Street could lose between 4% and 7% of market share in the global financial market, a cost of $15 billion to $30 billion in revenue to the financial services industry, over the next five years. According to the report, London is New York’s largest threat for market share.

In compiling the report, McKinsey interviewed more than 50 financial services CEOs and business leaders and also surveyed over 300 other senior executives.

Pershing Teams with PriceMetrix, Inc

Pershing LLC has formed an alliance with PriceMetrix Inc. that will help Pershing’s introducing broker-dealer customers better evaluate their businesses and identify growth opportunities.
The alliance will help introducing broker-dealers help their representatives maximize productivity because they will get access to PriceMetrix’s specialized reports. These reports help such firms: analyze sales and market intelligence data, develop tailored marketing campaigns, receive consultative advice surrounding commission structures, discount sharing programs and compensation plans, and use a variety of value-added productivity tools such as online calculators and best practice case studies, the company said.

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Pershing, a provider of clearing and financial services outsourcing solutions to institutional and retail financial organizations and independent investment advisors, is a subsidiary of the Bank of New York Company, Inc.

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