How the 1% escape the taxman

Book review: Capital Without Borders: Wealth Managers and the One PercentBrooke Harrington impressive book explores the wealth-management industry through the eyes of the managers themselves.

Dr Matthew Partridge
By
published
in Features

Capital Without Borders: Wealth Managers and the One Percent

by Brooke HarringtonPublished by Harvard University Press (£22.95)(Buy at Amazon)

Earlier this year, a massive document leak from law firm Mossack Fonseca, dubbed the "Panama Papers", revealed the extent to which celebrities, businessmen and some world leaders will go to avoid paying taxes. While their behaviour is clearly immoral, they wouldn't be able to do this without an army of legal and financial professionals. Capital Without Borders: Wealth Managers and the One Percent, by Brooke Harrington, looks at the wealth-management industry through the eyes of the managers themselves.

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This is "one of those rare books where you just have to stand back in awe and wonder at the author's achievement", says Richard Murphy in Times Higher Education. The most impressive thing is how the author "secured access to those she wished to interview by choosing to become a member of the wealth-management profession herself", resulting in a "profound insight into the world of the professional people who dedicate their lives to meeting the perceived needs of the world's ultra-wealthy".

While Harrington found that most wealth-management practitioners "avoid criminal acts at all cost", says the IMF's Finance & Development Journal, they do "adopt strategies that, albeit legal, are socially destructive". Capital Without Borders makes a strong case for shifting "attention from the wealthy who want to hide their assets to the professionals who make it happen".

Still, it's worth remembering that "the vast majority of those who use the services of wealth managers are not crooks, nor even by the standards of the global elite, at least especially rich," says Felix Martin in The New Statesman. With many parts of the world unstable, corrupt, or both, "who can blame the rich for steering clear of their local banking systems"?

Dr Matthew Partridge
Dr Matthew Partridge
Shares editor, MoneyWeek

Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.

He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.

Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.

As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.

Follow Matthew on Twitter: @DrMatthewPartri

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