SAN DIEGO — How many more colors can Zoe Saldana be on the big screen?
“Well, the rainbow has a lot of colors,” Saldana said in an interview at Comic-Con, laughing. “I dig it. I like being in space. I get to play less girlfriends, more female parts, more women. So I find it meaty.”
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* Wealth managers’ profit growth suffers as costs soar
* As much as 100 hours of due diligence commonplace
* Number of client rejections on the rise
By Sinead Cruise and Chris Vellacott
LONDON, July 22 (Reuters) – Private banks managing the financial affairs of the world’s wealthy face spending millions of dollars every year on vetting new clients, as regulators get tough on banks that harbour tax cheats and money launderers.
While the world’s rich are getting wealthier and putting more money into private banks, a growing proportion of the cash is from geo-political troublespots in the Middle East and Asia.
That is leading the banks, mostly based in Europe and the United States, to spend hundreds of hours on costly checks aimed at meeting regulators’ demands to root out bad clients, eating into their profit margins.
Paul Kearney, head of Kleinwort Benson’s private investment office, said his team incurs between 5,000 and 25,000 pounds ($7,600-$37,800) of costs in vetting each new client, depending on the background intelligence required and the jurisdiction in which the research is undertaken.
“Currently the international client base is the faster growing so we would expect our costs to increase in the next 12-24 months,” he said, adding costs could equate to up to 10 percent of the first year’s earnings from that account.
Some in the industry question whether all the effort will make much difference.
One London-based lawyer specialising in super rich clients, whose firm rejected one customer who turned out to be selling restored Soviet military hardware in the Middle East, said sophisticated criminals would always be hard to identify.
“If someone wants to get through the process and they are an inappropriate person, they will almost certainly have the necessary documentation and a front to get themselves through,” he said, speaking on condition of anonymity.
But with regulators cracking down on banks, and plans to prosecute individuals as well as their employers currently being discussed in some countries, more money managers feel they have to invest some of their profits in trying to reduce their risks.
“It is expensive, that is true, but you cannot think of it as it once was, because you cannot go back in time,” said George King, head of portfolio strategy at Royal Bank of Canada’s private banking arm, of the tougher vetting process.
“The burden for not doing it well or incorrectly, in terms of reputational risk or fines is both enormous and growing.”
Top banks, including HSBC, have paid huge fines to U.S. lawmakers to make amends for unwittingly laundering Mexican drug money, while Britain’s Financial Conduct Authority has fined three banks, including RBS’s Coutts, for lax money laundering controls since its crackdown gathered pace in 2012.
FINANCIAL STRAIN
Increased vetting costs come on top of rising administrative and regulatory expenses that have already made the competitive business of wealth management much less lucrative for banks.
Data from the 2013 World Wealth Report compiled by RBC Wealth Management and Capgemini shows the investable wealth of the world’s so-called “high net worth” individuals rose by 10 percent to a record $46.2 trillion in 2012, after dropping 1.7 percent in 2011.
The flow of money into the $18.5 trillion global wealth management sector increased 23.7 percent in 2012, reversing a 27.9 percent outflow in 2011. However, average pretax profit growth was 5.3 percent in 2012, down from 12.3 percent in 2011, with high costs blamed for the dip, consultancy Scorpio Partnership said.
The cost of complying with regulation will continue to rise, according to PwC’s annual Global Private Banking and Wealth Management Survey, published last month.
Respondents said they expected risk and regulatory compliance expenses to account for seven percent of annual revenue in two years, up from five percent today. Participants from the Americas are bracing for even higher costs – roughly equivalent to nine percent of revenues in the next two years.
“The ability to understand and manage the avalanche of regulatory and risk issues … will likely require private banks to continue investing heavily,” said Justin Ong, Asia Pacific leader in PwC’s global private banking arm.
Some banks have even resorted to rejecting accounts that are too small, risky or labour-intensive to turn a profit from.
“It is worth noting that the costs of the enhanced due diligence process may be incurred with the end result being a decision not to engage with the prospective client,” Kleinwort Benson’s Kearney said.
For some in the industry, though, the battle against criminals comes down to a mix of experience and instinct.
“You have to be very confident of the origins of the funds you are dealing with. If not, it’s very simple, you have to walk away,” said Rupert Robinson, CEO of Signia Private Wealth.
“You can do due diligence on a prospect to the ‘n’th degree and you might be able to find evidence of some bad behaviour but it is almost impossible to uncover things like fraud. If you have any doubt, you just have to say no.”
Apple is reportedly testing out bigger iPhone and iPad screen designs, according to a new Wall Street Journal report. The Mac maker has been asking its supplier partners for prototype screens in sizes in excess of four inches, and also just shy of 12-inches, which would make the resulting devices both larger than the current 4-inch display-toting iPhone 5, or the 9.7-inch full-sized iPad.
While looking into big displays for a possible phablet iPhone or massive iPad, the company is also set to begin production on a new iPad later this month, according to the WSJ’s sources. This new version of the iPad would have a lighter and thinner display, but primarily resemble the current, fourth generation iPad in terms of size and appearance. In addition to new iPad production, suppliers are also at work on new iPhone components, which entered mass production last month, per the report.
Apple’s tests with larger displays are not entirely new; reports from Reuters back in June suggested that Apple was looking at phones in 4.7- and 5.7-inch flavors. This is a sensible course given that many of Apple’s competitors use their larger displays on flagship devices as a way to purport to hold an advantage over the iPhone. The large screened iPad is a bit more unusual, but it could be the perfect way to address business and education users. Apple has already introduced a pricy, 128GB version of its larger iPad which fits that niche but few others, so another speciality device could be on the way.
Apple seeking test prototypes from suppliers for these larger sizes also doesn’t mean anything will make it to market; what Apple tests internally definitely doesn’t equal what it eventually ships, and plenty of products kick around the R&D center and never see the light of day. But it seems to have given a lot more thought to a larger iPhone device, at least per these recent leaks. Rival Samsung has played the big screen phone game to its benefit with the Galaxy line of devices, and that can’t have escaped Apple’s attention.
Both the next iPad and the next iPhone will keep their current screen sizes, according to the WSJ and other rumor sources, so don’t expect these immediately. But the fact that Apple is playing with its options at least brings up the possibility that we could see big changes around the corner.
As camera rumors go, this one’s pretty insane: Photography Bay is claiming that a reliable source has told it that Canon is testing "a pro-sized body like the 1D X" which packs a sensor with over 75 megapixels. Which: wow.
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If the name “Himax” prompted you to shrug, then you’re not alone, but it’s the latest company to receive a cash injection from Eric Schmidt’s checking account. The Taiwanese semiconductor firm is selling Google a 6.3 percent stake in Himax Display Technologies, a subsidiary that’s most famous for making the liquid-crystal on silicon chips used to drive Google Glass‘ head-mounted display. The cash will be used to expand capacity at the manufacturer, which already counts Intel as an investor — and if Google likes what it sees, the search giant has an option to buy a further 8.5 percent worth of stock within the next calendar year. It’s probably too early to hope that the project will help bring the price of future Glass headsets down, but we’re going to, so there.
Filed under: Wearables, Google
Via: Reuters
This amazing image isn’t a black hole sucking up the contents of the Universe, or an aerial shot of some dark mysterious lake. In fact, it’s the eye of a Basiliscus lizard, photographed by Suren Manvelyan.
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