In this feature, we examine how international affairs, or geopolitics to put it another way, is a topic that wealth managers, bankers and others must grasp to get the most value for their clients and their own businesses.
Being able to understand national and international politics
might not have been a core aptitude for private bankers and
wealth managers at one time, but it is becoming increasingly
important.
And can comprehending how economics and politics intersect give
wealth managers an edge? In other words, is there “Alpha”
available from grasping the topic?
There have been plenty of disturbances to suggest that the answer
to these questions is a “yes.” Even before the
unashamedly disruptive 47th President of the United States,
Donald Trump, entered the White House for his second term last
year, the days when people talked of “The End of History” and the
irresistible march of liberal capitalism seemed a distant,
hubristic memory. The geopolitical drumbeat became louder after
9/11. The 2008 financial crisis cranked up the volume, and it has
seldom declined. Some of the most recent stresses can be seen by
the gyrations in the price of gold, for example – a classic
“safe-haven” asset.
The 2020s have been hectic: the pandemic; Russia/Ukraine;
Israel/Gaza; West-China trade frictions; Trump’s “Liberation Day”
tariffs (and subsequent row back); Trump’s demands to take
ownership of Greenland; the US arrest and removal from Venezuela
of President Maduro; civil unrest/crackdowns in Iran; populist
politics on the rise in Europe; calls for taxes on the “1
per cent”; the rise of AI, and worries about Taiwan. It has
been relentless.
Against this fraught background, banks are spending money to
unlock value from geopolitical insights. There is now a concept
of “geopolitical alpha.” In March 2022, the US Federal
Reserve even published a paper, Measuring Geopolitical
Risk. The document contained the sobering message:
“Higher geopolitical risk foreshadows lower investment and is
associated with higher disaster probability and larger downside
risks to GDP growth.”
Intellectual firepower
For JP Morgan, the
largest US bank by assets, the world of international affairs
loomed large enough for it to set up the JPMorganChase
Center for Geopolitics (CfG), a client advisory service. It is
led by Derek Chollet, a foreign policy expert who knows his way
around Washington DC. He has held senior positions in the
Pentagon, State Department, White House, Congress, and several
research institutions. JP Morgan takes insights from experts
across the bank, the firm’s International Council, and others
externally including the 66th US Secretary of State Condoleezza
Rice, former UK Prime Minister Tony Blair, and former Speaker of
the House of Representatives Paul Ryan.
Another firm, Lazard,
has a unit – Lazard Geopolitical Advisory – which, as the
name suggests, concentrates on the topic. A few weeks ago, the
firm issued its Top Geopolitical Trends In 2026
report, talking about a “New Economic Nationalism” in the US, “EU
and China On A Collision Course”, and “Shifting Political and
Diplomatic Tides in Latin America,” among others.
One question that arises is what sort of education those working
in the industry need to have to be aware of the issues.
London School of Economics
This news service asked Dr Silvia Pepino, visiting senior fellow
at the International Relations Department at the London School of
Economics, about her academic discipline and how it might affect
those in the financial world.
“There are two major ways I see geopolitics expertise becoming
more in demand in the financial and corporate sectors,” she said.
“First, explicitly, as we have seen the creation of dedicated
teams and positions such as chief geopolitical strategist or
chief geopolitical officer. Second, implicitly, as geopolitical
risks are increasingly embedded in major strategic and risk
considerations, making it an essential tool for a wide range of
professionals from the analyst to the asset manager to the CEO.”
Two examples of chief geopolitical strategists are Miha
Hribernik, who is focused on Asia in that role at Deutsche Bank
and based in Hong Kong. Another example is Marko Papic of
Clocktower Group. Papic even published a book in 2020
entitled Geopolitical Alpha: An Investment Framework for
Predicting the Future.
Take the plunge
Dr Pepino says people in banking and finance or interested in
working in the sector should consider courses in international
relations.
“I would strongly encourage it. There are a variety of options
for differing career stages, commitment levels and specificity of
interests. They provide increasingly essential tools to
understand the world we live in, as well as to make sounder
financial, business and policy decisions,” she said.
A number of universities teach the subject, as a quick search
unearths names such as Harvard, Stanford and George Washington
University in the US, Oxford and LSE in the UK, Sciences Po or
Sciences Po Paris, also known as the Paris Institute of Political
Studies, in France; and the The Lee Kuan Yew School of Public
Policy (LKYSPP) at the National University of Singapore. These
are just some of those who teach the topic at graduate and
post-graduate level.
Dr Pepino is the author of Sovereign Risk and Financial
Crisis, published in 2015.
“My research is specifically focused on how international and
domestic political and political economy factors impact financial
markets. Using language more commonly found in the popular and
financial market discourse, I look at how geopolitics,
geoeconomics and politics interact with financial markets,” she
said. “My specific angle derives from both having gained my PhD
in International Political Economy of Money and Finance at LSE’s
International Relations Department and having worked for two
decades in the City of London, in the sell-side, buy-side, and
central banking.”
Until about a decade ago, Dr Pepino said that the “general
consensus had been that political factors mattered for financial
markets fluctuations in emerging markets, but advanced
democracies’ bond markets were generally understood to be broadly
immune.”
(Editor’s note: Well, that’s certainly changed. Bonds aren’t
immune any longer. As if the prove the point this morning, Japan
prime minister Sanae Takaichi achieved a landslide election
win: the Liberal Democratic Party (LDP) and the Japan
Innovation Party won 352 seats in the 465-member lower
house. The premier has promised more fiscal expansion and
borrowing – not great news for bond market
investors.)
Dr Pepino noted that she has also obtained the TRIUM Global
Executive MBA, a collaboration between LSE, NYU-Stern and HEC
Paris. This is a global MBA for senior executives that holds
classes across the three partner universities. Dr Pepino said
TRIUM was the first MBA to integrate geopolitics as a core
subject of global leadership training. In 2026, TRIUM marks its
25th anniversary, “against the backdrop of global developments
that strongly validate its pioneering approach,” she said.
When to block it out
There’s a lot of political noise. That may mean that wealth
managers must be more attuned to the issues that can affect their
clients’ wealth and know enough to be sure when to block out the
din.
In talking to wealth managers and seeing their views in print, it
seems that a common point of agreement is that political
uncertainties cannot be an excuse for sitting on the
sidelines in cash. The wonders of compound returns can all too
easily be ignored if people are fixated on politics.
“From our vantage point, the lesson from recent years appears to
be that stepping away from investment markets is unlikely to be
the correct response to a geopolitical crisis,” Joe Aylott,
multi-asset strategist at Coutts, the UK private bank,
said in a recent note. “Instead, staying invested for the long
term, in well-diversified portfolios, could be the most effective
way to navigate near-term uncertainty and compound long-term
financial returns.”
An understanding of how markets can be moved by unfolding
political trends can also be a reminder of the benefits of
active, as opposed to passive, money management. That’s the take
of David Roberts, co-portfolio manager (Global Strategic Bond
Fund) at Nedgroup
Investments.
A person who started managing money in their mid-20s in the GFC
will now be in their early 40s, Roberts told a media briefing in
London attended by WealthBriefing. “They’ve only
experienced good times” [in fixed income markets], he said. This
age cohort has seen central banks bail out banks in
trouble.
“There is an advantage for those who understand variances in
local and international political interactions. There is
inter-market dispersion and if you are on the right side then it
gives you fantastic opportunities,” he said. The monetary
policies of Japan, for example, differ from those of the West.
The Asian nation is moving away from its ultra-low rates that
endured for years, while others have (mostly cut) after the
post-Covid hikes.
Top of mind
Geopolitics clearly is top of mind for many. In its 10 September
2025 Family Office Investment Insights Report, Goldman Sachs found
that 61 per cent of respondents cited geopolitical conflict as
the greatest investment risk, followed by political instability
(39 per cent) and economic recession (38 per cent). The annual
Global Family Office Report 2025, released by UBS on 21 May, showed that
geopolitics was a major concern; Citi Wealth, in its
2025 Global Family Office Report, issued in September,
noted: “Global trade disputes emerged as a top concern (60 per
cent) for family offices, followed by US-China relations (43 per
cent) and a resurgence of inflation (37 per cent). Geopolitical
tensions and government initiatives to attract capital are
fuelling interest in asset location and a re-evaluation of
jurisdictions.”
Family offices should take geopolitics seriously, argues Ocorian, a specialist in asset
servicing for private and corporate markets as well as fiduciary
administration services. And it makes sense that this firm should
argue such a point, because
as discussed here, HNW and ultra-HNW individuals who are
highly mobile are also likely to pay heed to where they’re safest
from bad political developments.
“This question reflects a widespread and growing concern in the
family office sector,” Ocorian said in a note on 5 August last
year. “Surveys such as those conducted by BlackRock reveal that
geopolitical uncertainty is the leading worry for family offices,
shaping their capital allocation decisions in a profound way. 84
per cent of family offices cite the geopolitical landscape as
increasingly critical paired with 64 per cent looking to increase
portfolio diversification in the current outlook.”
The executive search perspective
From the executive search point of view, an understanding of how
complex the world can be – including the political and cultural
aspects – is important. Nick Hughes, an executive search
specialist of 25 years’ experience, with a career that has seen
him work in London, Singapore, Gibraltar and Switzerland, has his
own perspective.
It is important for bankers/relationship managers and others who
envisage a career abroad – for example, in wealth hotspots
such as the UAE and Switzerland – to be realistic. They must
understand the need to grasp the local culture, consider the need
to learn languages, if necessary (Arabic, etc), understand the
costs of living and the time it will take to develop revenues and
build trust in a different culture, Hughes told
WealthBriefing.
“As far as geopolitics is concerned, the movement of wealth to
new places means professionals must be alive to the challenges of
doing business in new places,” Hughes told
WealthBriefing.
A realistic grasp of the world as it is, not how it might appear
in glossy magazines, is all a part of the approach that Hughes
stresses.
“Many bankers that I talk to say `I would like to relocate to the
Middle East, are there roles available?’” he said. “Many of them
don’t have the expertise. And it is not a free-for-all market
where companies are hiring indiscriminately.”
For those seeking US roles, “you have to be mindful that it can
be complicated to place international hires because of the
challenges of gaining work visas, it is expensive and the local
market needs to be explored first,” Hughes said. “Firms are only
going to hire bankers and RMs if they have a strong business
case”…firms are “ultra-selective of whom they hire…you see fewer
banks stating that they will hire hundreds of new bankers
year-on-year anymore. Their forecasts are certainly more
conservative,” he said.
Geopolitics is nothing new, but maybe the sheer volume of news
today and the fragmentation of traditional politics has given the
topic new salience, and those working in the wealth industry –
analysts, RMs or C-suite leaders – can’t ignore it.
(As ever, if you value this content and want to jump into the
conversation, please get in touch with the editor at tom.burroughes@wealthbriefing.com)
