Do you really need a 'lifestyle' offering from your banker?

Reading about Barclays' lifestyle offering for 'high net worth clients' one has to wonder if that is what will restore confidence among investors that suffered from a difficult and unrewarding investment climate during the past 10+ years. Would it not be better to concentrate on producing the best possible performance for the client's portfolios and save the money (and possibly reducing fees accordingly?)

Beware of selective performance statistics

The first quarter of 2012 is nearly over and it has been a good one for markets. Inevitably some fund managers (or better some of the funds in their product line up) have done well and are not slow in trumpeting their achievements. But investors should be careful when listening to the siren songs of marketers or investment advisers. A fund that did well over the past three months may not look so good when scrutinised over a one or three year period. Even when a fund passes muster over the longer periods there might be other - and larger - funds managed by the same firm or individual that can show at best a mediocre performance. That leaves the poor investor still with the difficult (impossible?) choice of picking the right fund.

Use fee-based adviser and liquid products

Recommends William Baldwin (Forbes).

Don't be a Muppet when dealing with financial advice

The revelation claiming that some employees of Goldman Sachs occasionally referred to customers as 'muppets' should be a reminder that the old adage 'Buyer Beware' should always be foremost in investor's minds when confronted with financial advice. In nearly all situations the vendors have a financial interest at stake and the inherent conflicts of interest can only be neutralised by a careful analysis of the service on offer. Most investors are at a disadvantage as they do not have the same level of information about the intricacies of the financial markets that is available to finance professionals. Taking unbiased advice is recommended in order not to become just another muppet. For more on the subject read here. The distinction between a client and a counterparty should be of particular interest to private investors.

Bidding war for Financial Advisers - what it means for you

News that major players in the financial services industry are involved in a bidding war for financial advisers should alert investors that they may be left paying the bill for irresponsible behavior by the employers of these advisers. After all, more pay for the lucky advisers who have large amounts of money lavished on them means that they are expected to 'produce' fees and commissions that justify their increased income. This could well tempt some - or the majority - among them to put their customer's money into investments that are selected not because they are particularly suitable but because they result in higher fee income for the adviser. Investors should therefore be wary whenever their financial consultant changes employer and take independent advice before considering shifting any accounts to a new firm.

Unbelievable neglect of customer confidentiality!

It is reported that in the course of its agreement with US authorities UBS in Switzerland accepted the obligation to report the destination banks for all US customers. It may have been done via the Swiss authorities but the bank should have been aware of the consequences for its 'clients'.

Private Banker diverts Sfr 1.5 million and escapes jail!

The selection of an trustworthy financial adviser is of the utmost importance. While no customers of the bank in question have lost any money the case case should still set alarm bells ringing. When the director of a bank can escape a prison sentence even after he admitted that he 'diverted' Sfr 1.5 million from commission payments to his own accounts the sentence demonstrates that crimes by banking and finance professionals are still not punished in the same way as crimes by 'ordinary' criminals and investors should be extra careful when selecting a financial adviser. That the banker in question enjoyed a basic annual salary of  Sfr 240'000 and at one stage received an annual bonus of Sfr 816'000 is proof for the extent of his greed.

What are 'complex financial products'?

An arbitration award that related to the sale of a 'complex financial product' illustrates the problem that ordinary investors face when offered these products. In nearly all such situations they find themselves at a severe disadvantage vis-a-vis the salesperson or financial adviser. It is like asking the patient to make a judgement about the correct procedure when faced with cancer. So trust is of paramount importance in any relationship between an investor and financial professionals. Sadly, we can only recommend to always get a second opinion from a neutral expert before buying any financial instrument as the layman cannot really know when an investment vehicle is 'complex' enough to warrant special caution and analysis.

'Vaporized' MF Global Funds - Insult added to Injury

"The theft of customer funds was bad enough, but the manner in which the exchange, the regulators, the court, the Congress and the Obama Administration have dealt with the aftermath of this is truly despicable." (Jesse's Cafe Americain)

Azentus Fund loses 6.70 % in first year

But assets under management are up. Need we say more? Nothing illustrates the need for careful fund selection more - and this applies to all investment funds, traditional, hedge or private equity.