Markets in a Minute

Mapped: The Top Global Financial Centers in 2023

Published

4 months ago

December 14, 2023

Dorothy Neufeld

Top Financial Centers in the World

The Top Global Financial Centers in 2023

For centuries, global financial centers have served as a linchpin for capital market activity.

These hubs share important features, from the infrastructure to facilitate billions of transactions to the regulatory framework to promote more transparent markets. As economies have evolved, so have centers for global business—however the transition can shift slowly.

This graphic shows the top global financial centers in 2023, based on rankings from the consultancy group Z/Yen.

How Cities Were Ranked

To analyze the strength of each financial center, Z/Yen looked at the following areas of competitiveness:

Financial Sector Development
Business Environment
Human Capital
Infrastructure
Reputation

Each of these categories has four subcomponents, which altogether arrive at a cities score.

The World’s Leading Financial Centers

In 2023, New York remained the epicenter for global finance.

With $46 trillion in stock market capitalization, it captures 40% of the world’s total, thanks to the depth and liquidity of its markets. Domestic and international companies look to list on its exchanges due to their broad investor base.

Roughly 330,000 people work in financial services, however, financial firms are increasingly moving out of the city. Since the end of 2019, $993 billion in assets across 158 companies have moved headquarters driven by lower taxes in other states.

Ranking	Financial Center	Country	Change in Rank 2022-2023
1	New York	🇺🇸 U.S.	+0
2	London	🇬🇧 UK	+0
3	Singapore	🇸🇬 Singapore	+0
4	Hong Kong SAR	🇭🇰 Hong Kong SAR	+0
5	San Francisco	🇺🇸 U.S.	+0
6	Los Angeles	🇺🇸 U.S.	+1
7	Shanghai	🇨🇳 China	-1
8	Chicago	🇺🇸 U.S.	+4
9	Boston	🇺🇸 U.S.	+5
10	Seoul	🇰🇷 South Korea	+1
11	Washington DC	🇺🇸 U.S.	+4
12	Shenzhen	🇨🇳 China	-3
13	Beijing	🇨🇳 China	-5
14	Paris	🇫🇷 France	-4
15	Sydney	🇦🇺 Australia	-2
16	Amsterdam	🇳🇱 Netherlands	+3
17	Frankfurt	🇩🇪 Germany	+1
18	Munich	🇩🇪 Germany	+6
19	Luxembourg	🇱🇺 Luxembourg	+2
20	Zurich	🇨🇭 Switzerland	+2

London ranked second given its role as an investment banking and foreign-exchange trading hub. While it remains a dominant center, international banking has waned since Brexit as business has shifted to the euro area.

With a population of six million people, Singapore fell in third. Its diplomatic neutrality allows Asian and Western companies to conduct business in the country, operating as the “Switzerland of Asia”. Tech giants from Google to Alibaba have their regional headquarters based in the commerce hub.

This year, Hong Kong ranked fourth, followed by San Francisco and Los Angeles.

Shanghai (7th) is home to the largest stock exchange in Asia, at $6.6 trillion. However, it fell in rank over the last year along with other major Chinese financial centers.

The Future of Global Financial Centers

Along with ranking the global centers of commerce, Z/Yen highlighted the top centers likely to grow in significance over the next two to three years.

Seoul featured at the top of this list, followed by Singapore and Kigali, Rwanda’s capital.

To attract foreign investors and expand its role as a financial center, Seoul has proposed new tax revisions that exempt income and corporate taxes for foreign companies for three years. While these are still in discussion, obstacles remain.

Overall, the majority of up-and-coming hubs were located in Asia, likely driven by the region’s increasing economic influence over the last several decades.

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Markets in a Minute

The Top 5 Reasons Clients Fire a Financial Advisor

Firing an advisor is often driven by more than cost and performance factors. Here are the top reasons clients ‘break up’ with their advisors.

Published

2 weeks ago

April 15, 2024

Dorothy Neufeld

This circle graphic shows the top reasons for firing a financial advisor.

The Top 5 Reasons Clients Fire a Financial Advisor

What drives investors to fire a financial advisor?

From saving for a down payment to planning for retirement, clients turn to advisors to guide them through life’s complex financial decisions. However, many of the key reasons for firing a financial advisor stem from emotional factors, and go beyond purely financial motivations.

We partnered with Morningstar to show the top reasons clients fire an advisor to provide insight on what’s driving investor behavior.

What Drives Firing Decisions?

Here are the top reasons clients terminated their advisor, based on a survey of 184 respondents:

Reason for Firing	% of Respondents Citing This Reason	Type of Motivation
Quality of financial advice and services	32%	Emotion-based reason
Quality of relationship	21%	Emotion-based reason
Cost of services	17%	Financial-based reason
Return performance	11%	Financial-based reason
Comfort handling financial issues on their own	10%	Emotion-based reason

Numbers may not total 100 due to rounding. Respondents could select more than one answer.

While firing an advisor is rare, many of the primary drivers behind firing decisions are also emotionally driven.

Often, advisors were fired due to the quality of the relationship. In many cases, this was due to an advisor not dedicating enough time to fully grasp their personal financial goals. Additionally, wealthier, and more financially literate clients are more likely to fire their advisors—highlighting the importance of understanding the client.

Key Takeaways

Given these driving factors, here are five ways that advisors can build a lasting relationship through recognizing their clients’ emotional needs:

Understand your clients’ deeper goals
Reach out proactively
Act as a financial coach
Keep clients updated
Conduct goal-setting exercises on a regular basis

By communicating their value and setting expectations early, advisors can help prevent setbacks in their practice by adeptly recognizing the emotional motivators of their clients.

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Markets in a Minute

The Top 5 Reasons Clients Hire a Financial Advisor

Here are the most common drivers for hiring a financial advisor, revealing that investor motivations go beyond just financial factors.

Published

2 weeks ago

April 15, 2024

Dorothy Neufeld

This circle graphic shows the top reasons for hiring a financial advisor.

The Top 5 Reasons Clients Hire a Financial Advisor

What drives investors to hire a financial advisor?

From saving for a down payment to planning for retirement, clients turn to advisors to guide them through life’s complex financial decisions. However, many of the key reasons for hiring a financial advisor stem from emotional factors, and go beyond purely financial motivations.

We partnered with Morningstar to show the top reasons clients hire a financial advisor to provide insight on what’s driving investor behavior.

What Drives Hiring Decisions?

Here are the most common reasons for hiring an advisor, based on a survey of 312 respondents.

Reason for Hiring	% of Respondents Citing This Reason	Type of Motivation
Specific goals or needs	32%	Financial-based reason
Discomfort handling finances	32%	Emotion-based reason
Behavioral coaching	17%	Emotion-based reason
Recommended by family or friends	12%	Emotion-based reason
Quality of relationship	10%	Emotion-based reason

Numbers may not total 100 due to rounding. Respondents could select more than one answer.

While financial factors played an important role in hiring decisions, emotional reasons made up the largest share of total responses.

This illustrates that clients place a high degree of importance on reaching specific goals or needs, and how an advisor communicates with them. Furthermore, clients seek out advisors for behavioral coaching to help them make informed decisions while staying the course.

Key Takeaways

With this in mind, here are five ways advisors can provide value to their clients and grow their practice:

Address clients’ emotional needs early on
Demonstrate how you can offer support
Use ordinary language
Provide education to help clients stay on track
Acknowledge that these are issues we all face

By addressing emotional factors, advisors can more effectively help clients’ navigate intricate financial decisions and avoid common behavioral mistakes.

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