Our Financial Services Industry and More


In my writings I intentionally try to avoid any references to political issues since for many years it seems that both parties had been working in tandem towards the improvement of our financial services industry. They have more or less always agreed on the major issues and both use the industry as an example to boast how successful they were at aiding and developing it. I have also avoided the issue since the main aim of this blog is to provide insights and educational notes based on facts while trying to avoid simply expressing opinions without basing them on facts. I respect everyone’s beliefs and opinions and I try to use my writing to better one’s understanding of investments and the industry in general.

However, the continued saga that has taken over the local media outlets this year has directly affected the industry I operate in and I cannot avoid pointing out a few facts that everyone should be keeping in mind. It has become even more apparent to me how little politicians know about how this industry works and how competitive it is. Through irresponsible and sometime immature antics, many a time presented through social media (of course), it is shocking to see how short sighted both parties are acting when it comes to this very important industry.

Proper use of Social Media

I understand that we are all human and we all make mistakes. No one is an expert in every field and sometimes people are ill advised and they unconsciously take the bad advice and think that they are doing the right thing. But then I also believe that people who are ministers, have a doctorate and/or are part of respected professions have common sense. For example, if you have an issue with the person who is the head of the regulatory body that supervises and regulates all entities involved in the financial services sector in Malta – I do not think you should express such issues through a social media post. Do not get me wrong, it is important to scrutinise everyone and to make it clear that everyone will be held accountable for their actions. However, when every foreign investor who is involved in any type of investment services business has to deal with the entity which that person oversees – it is not the best idea to attack him personally and so publically.

When I said that the financial services industry is a very competitive one I was mainly referring to the international competition that exists between the many jurisdictions which try to attract business to themselves. Publicly questioning the integrity of the head of the regulatory authority in this sector on social media is very irresponsible and petty. There are many other better avenues to address any concerns one may have that do not put our whole jurisdiction into a negative light.

Stop blaming others for your mistakes/short sightedness

Every member of parliament (MP) knows that they have to declare their assets publically. This in itself is a good thing that ensures that such MPs should think twice when it comes to their financial dealings since they know that they have to make their financial dealings public on a regular basis. If someone does not agree with this point or would rather not make their financial affairs public, then why would they become an MP at all I would ask? Everyone’s privacy should be respected and everyone is free to decide for themselves if they want to join the public domain and enter politics. However, you cannot try and play both sides. So if one had taken the decision to become an MP such person should have more common sense when it comes to their financial affairs. Blaming other people or entities for bad advice is not an excuse for taking bad decisions which one should have known would look dubious once they became public – even if they were doing nothing wrong.

Moreover, and what is most important to our industry, one must weigh the cost of their actions on the country they have decided to serve. If you are a public figure all your actions will have an effect on the public you are serving. So someone occupying such a position should always keep in mind the bigger picture and what is really at stake. Some people may well be surprised to know that certain foreign investors still think of Malta as an offshore centre with dubious setups. Anyone of these foreigners who has actually tried opening a company locally in the financial services sector would quickly realise that this is not the case. Sadly, however we are still battling this misconception. So having politicians publicly attack each other for one or the other’s mismanagement of their financial affairs is simply harming our reputation an increasing the misconception that some investors have.

Beware of the Power of the News

We live in a world where social media and the internet at large have made information available in seconds. If one had to search for Malta in the news online I am sure they would not be finding a very attractive jurisdiction to invest in at the moment. It is truly a shame that such an important industry that contributes so much to our local economy is being dragged into the political pettiness by both parties.

While it is important to hold people accountable, by organising public demonstrations and coming out with headlines aimed at scaring people into turning against one political party or another does nothing to help our industry. It may be surprising to some, but believe it or not we do not operate in a vacuum, Malta is not the centre of the world and we are in competition with much larger countries who might also have a better reputation. So having the two main political parties mud-sling each other is only benefitting their individual political aspirations and not our economy.

The Bottom Line

At the end of the day we are all trying to be better off on a personal level and an element of greed will always exist. I do believe that to a certain extent greed is a good thing since it motivates people to become better at what they do. However, one also has to keep in mind the bigger picture and not give into the temptation of short term benefits. If the industry does well there is a much better chance that you will do well, even if you are not directly employed in the financial services industry. All industries are to some extent or another interconnected to the financial services industry which encompasses many branches of finance including, but not limited to banking, insurance, investments and accounting.