27 January 2017

Top-rated Financial Adviser? Investigate before you invest!

Numerous publications try to give awards to Private Banking firms or individual Financial Advisers. But while all these awards may have some merit more often than not they are just a public relations exercise or at the very least can blind the gullible into taking the marketing patter for gospel truth. The key aspect, past performance, is usually not included in the presentation. However problematic past performance data may well be the key purpose of investing is to achieve a satisfactory return within the constraints of the risk preference the investor has. Giving data in private sales conversations is not good enough as the investor has no way to verify the claims. The problem of deficient disclosure is even more virulent if the investor is considering to invest with one of the huge Private Banking complexes such as UBS, Credit Suisse or JP Morgan. There simply is no way to easily obtain and verify performance data as the army of Financial Advisers may provide quite different performance and there is no simple option to go for the 'House view'. While an Adviser such as Andy Chase in this article may provide excellent service he is basically running the portfolios of his clients according to his own market outlook, possibly with some wide constraints imposed (or only suggested?) by Morgan Stanley. In effect he is running his own business in a sort of franchise and has to be treated as an independent business.