Emotional and Ethical Labour and the Performance of Elite Financial Subjectivities in Private Banking and Wealth Management

The subprime mortgages crisis has spurred an interest in forms of financialization of structures of individual and collective financial security (mortgage, insurance, pensions, etc.), in the tools and techniques that render individuals and households financially legible, and in the subjectivities emerging from those processes and techniques (Leyshon and Thrift 1999; Poon, 2009; Langley 2008). But while considerable research has been produced on the ways in which the everyday lives of lower and medium income individuals and households are harnessed into the financial system, comparatively little attention has been paid to the specificities of financialization of economic elites. As wealth inequality widens, with the wealthier 1% of the world population owning more than half of its wealth (Oxfam, 2015), enquiries on financialization cannot be limited to financial exclusion or vulnerability, but should also look into the specific interactions, contaminations and overflows whereby financial institutions and private wealth interweave and elite financial subjectivities are (re)produced.

In order to consider those specific entanglements, this paper turns to Private Banking and Wealth Management (PBWM), a highly elitist sector of financial services that provides comprehensive advisory, planning and management services to the so-called High Net Worth Individuals (HNWI) and families (typically, those with investable wealth in excess of $1million). Priding itself in offering bespoke advice and tailor made solutions for the protection and preservation of wealth, the PBWM sector hinges upon the bond between the client and their dedicated manager. Intimate knowledge of the client’s personal and professional life, unlocked by a trust built and continuously earned over time, is the most valuable asset of this business, and – as I was repeatedly told in interviews - one that takes a lot of work and time to build, but can be easily and instantly destroyed.

The peculiar entwinements between knowledge forms, emotional labour, temporalities and economic value that form in this sector deserve closer investigation, as they seem to complicate typical accounts of financialization.

To do so, this paper draws insights from a variety of documental material (industry reports, financial firms’ in-house research and client profiling questionnaires, specialized media, etc.) and from over 20 interviews with wealth managers, IT specialists and legal compliance and behavioral analytics experts, conducted over one year in three distinct financial and banking environments: Lisbon (Portugal), London (UK) and Geneva (Switzerland).

As strategic loci of empirical enquiry, the lived worlds of PBWM provide unique insights into two aspects of financialization that are perhaps less perceptible in accounts focusing on other sectors of the financial industry and/or other types of financial subjectivities. Firstly, it debunks accounts of financialization as one-way processes whereby the lives of individuals are pulled and harnessed into the financial system, by showing how the financial system enters the homes and lived worlds of clients and their families and actually undergoes specific processes of ‘domestication’ in order to do so. Secondly, it contributes to soothe the bias towards economicist accounts of financialization that focus mostly on modes of value extraction and processes of economization (Kaliskan and Callon, 2009, 2010), by posing at its center categories such as trust and care, that immediately call for investigation on specific processes whereby individuals constitute themselves as subjects of ethical experience.

To develop these arguments, the paper will look at the process known as ‘due diligence’. Also known as Know-Your-Customer (KYC), due diligence consists in a set of mandatory practices of data collection and analysis through which financial firms (1) identify the origin of their clients’ assets (to comply with Anti-Money Laundering and anti-Terrorism financing standards), and (2) identify clients’ investor profile (to comply with requirements that advice given is suitable to the client’s financial capacity and risk tolerance). KYC requires that clients disclose often sensible information such as how much wealth one has, the sources of that wealth and types of expenses, family disputes concerning inherited wealth, health issues impacting insurance policies, or the excessive expenses of a son. For managers and firms, unlocking such knowledge requires empathy, trust and intimacy, engendered through particular temporalized and spatialized forms of emotional labour. Having breakfast with a client after the gym and before they go to their office, asking about their golf handicap during a phone call, or offering access to the bank’s exclusive lounge at a music hall are some of the threads that affectively knit managers and firms into the lived worlds of clients and their families.

Similarly, in order to meet regulatory requirements of suitability, firms have organizational and technological mechanisms in place to outline clients’ investor profile, and prevent clients from having in their portfolios products that are not appropriate to their financial capacity or their ability to emotionally cope with risk. But while organizational and technological elements participate in the enactment of that profile, interviews with managers reveal that these enactments become closely linked to forms of ethical experience. Notably, the advisor-client relation configures intersubjective processes of truth-telling, guided self-assessment and guided production of true accounts of self. Critical here is the manager’s role as audience and parrhesiastes (Foucault, 1984): the manager facilitates the client’s production of a true discourse about themselves (namely, but not limited to, KYC queries) and must correct the client who deviates from their profile by confronting them with the worst consequences that can arise from pursuing that option, and demanding an answer to the question ‘are you someone who would be willing to be in this position?’. True discourses about themselves are thus continuously demanded from clients by their managers, in spite of risks to the immediate commercial relationship or to the manager’s fee-earning record. Interestingly, this ethical bond performed contrastively to crude short-term commercial interests seems to be the fuel driving and reinforcing the business relationship over time, with financial gains to both manager and firm.

In sum, by investigating the entwinements between knowledge forms, emotional and ethical labour, temporalities and money in the lived worlds of PBWM, this paper hopes to contribute to a more nuanced knowledge of modes of financialization and of the (re)production of elite financial subjectivities in particular.