Miami has really been ramping up its efforts to become a financial centre of late, and these are starting to really make a difference. As reported by Nicholas Nehamas (2015) of the Miami Herald, Miami is somewhat banking on its future as a financial hub. As Nehamas argues:
“Miami’s finance scene may never blossom into “Wall Street South” – but recent efforts to attract hedge funds and other investment firms to South Florida are starting to pay off.”
Tremendous growth has been seen in the finance industry in Miami, and there has been a lot of growth in particular in businesses that used to be “tangential parts of the industry”, according to Juan Carlos Campuzano, the president of Oberlin Wealth Partners.
It is hard to deny that Miami is a great place to live. It has excellent weather and a tax climate that is considered to be “favourable” for the wealthy. That has through recent history at least, led to its drawing in of wealth from other locations. It is also argued that the city’s “hot downtown” that has interesting culture and pleasant condos has had a role to play in drawing in people that are very wealthy.
It is reported on this note by Frances Aldrich Sevilla Sacasa, the CEO of the Miami operation for the Brazilian firm Itau Private bank that Miami has actually become a very important destination for those individuals of high net worth. In some cases these people choose to settle in Miami, and in other cases they may own a second or even a third home in the city. Alternatively they may just pass through. Either way, the presence, either permanent or temporary of this high worth individuals is also attracting those of lower echelons.
It is reported that in Miami traditional banking has been declining as a result of regulation and disclosure laws that impact clients from overseas. However, other types of finance have been picking up. In particular, private equity firms, investment banks and hedge funds have all been building up in Miami. One of the benefits for these firms of operating in Miami is the fact that there is an excellent support network of professionals to be relied on. For example, there are lots of accountants and law firms that all help to offer support.
Ian McCluskey, a vice president of Newlink Group which has recently begun a financial services practice in Miami has carried out some investigation into the number and extent of financial firms in the city. McCluskey has found that there are a total of 13 investment banks, 19 private equity firms, 60 hedge funds and 63 wealth management firms. That doesn’t even include the estimated 200 family offices that are private firms that take care of the management of money for one or more wealthy family. These figures were arrived at by reviewing private databases as well as through interviewing executives in the finance industry.
David Schwartz, the Chief Executive Officer of the Florida International Bankers Association is reported to attribute at least some of the growth to the closeness of Miami to Latin America. Schwartz stated that:
“Because of our proximity to Latin America, we are still the second-most important centre for international banking in the United States after New York.”
However, legislation has had an impact on that and has limited international business in Miami. Clients from Latin America are argued to be concerned about risks of information about them getting back to people in their home countries. This is one factor that is reported to have led to a drop in international clients for businesses. Additionally it is explained that three foreign banks have withdrawn from Miami in the past two years alone. These banks include BNP Paribas and the Royal Bank of Canada, as well as Lloyds.
Most people are encouraged by the changes, and excited that Miami is attracting smart and hard working people. It is perceived that this will have a knock on effect on other industries and that other people will benefit as a result. However, there is a need to keep attracting talent to Miami to support the growth in the financial sector there to support this too. No doubt if Miami keeps attracting people and organisations in the way that it is, that will happen.