Intertrust, one of the worlds largest offshore service providers for financial investment funds and trusts is under pressure after being associated with the document leaks from Mossack Fonseca (a Panamanian based law firm). This is after Mossack Fonseca has been under recent investigation for illegal accounts held by politicians and other wealthy investors as well as leaking millions of documents. Intertrust has stated that they have no relations to Mossack Florseca as well as any offices in Panama. However, after stocks have plummeted six percent in the last week investors seem weary about the situation. Offshore service providers are already treading a fine regulatory line and with the recent discovery of the Panama Papers changes will be made within this sector.
The Panama Papers put the legal and financial industries in the ethical spotlight. Earlier this week we talked about the paternalism model. The paternalism model is where the professional has the bulk of the decision making authority over the client. I find that this is true for the investors at Intertrust. The reason for this is clients trust that financial advisors will put their money in a reasonable investment that will gross them a profitable return. However, when your advisor puts you in a risky situation they are going against the paternalism model and breaking their fiduciary duty which could have been the case at Intertrust.