Archive for March, 2013

Another target in the firing line for Wilson

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Sunday, March 31st, 2013 EN No Comments

ASK THE EXPERTS: I want the cash from my life insurance policy but the …

Edited By Stephen Womack, Financial Mail On Sunday

22:16 GMT, 30 March 2013


09:03 GMT, 31 March 2013

This week’s experts are JASON WITCOMBE, a chartered financial planner with Evolve in the City of London; HELEN KANOLIK,  who runs HelenK Financial Advice in Wimborne, Dorset; MICHAEL GARVEY, a chartered financial planner with Edinburgh Wealth Management; and Philippa Gee, who runs Philippa Gee Wealth Management in Church Stretton, Shropshire.

If you have  a personal finance query, write to: Ask the Experts, Room 301, Northcliffe House, 2 Derry Street, London W8 5TS or email, No original documents please.

Ask the Experts cartoon

M.H.writes: In 1985 I took out a life insurance policy under trust. My daughter and our solicitor  at the time were trustees. The solicitor’s office has long since closed and he cannot be traced, which is now preventing me from surrendering the policy. What should I do?

J.W.replies: Life insurance is often written under trust to ensure that money is available to help your family swiftly after your death without the need to wait for probate.

However, trusts can be complex and the rules have changed considerably since 1985.

Before you attempt to cash in the policy, establish what benefits you would be giving up and whether as the settlor of the trust you would be able to receive the proceeds.

They may have to go to whoever you originally specified as being beneficiaries.

My advice would be to write to the insurer and to ask what paperwork it needs to replace a missing trustee. Also ask what your options are in terms of surrender.

If this is inconclusive, I suggest you speak to an independent financial adviser, who can look at this on an hourly rate fee basis for you.

If you do not have a financial adviser, you can find one through online directories such as Unbiased or VouchedFor.

The latter service, which is free, includes ratings of independent financial advisers by their existing clients.

£16,000 gift to son

A.C.writes: I will shortly inherit £16,000. My husband and I are quite comfortable and would like to give the money to our son to help with a property purchase. What is the best way to make this happen?

H.K.replies: You could ask for the will to be changed by ‘deed of variation’ so the inheritance goes to your son instead of you.

This would mean the money never belongs to you, so it could reduce any inheritance tax that might have to be paid when you die.

All beneficiaries would have to agree to the deed, and there could be some extra legal fees. If the property purchase is going through while you are waiting for this to happen, you could lend the £16,000 to your son, for repayment when he gets it from the executors.

Am I in an Isa fix?

E.D.writes: I opened a fixed-rate cash Isa last year which runs on beyond the start of the new tax year on Saturday.

Will I be allowed to start a new Isa then or must I wait for this fixed-rate Isa to end?

P.G.replies: The 2013-14 allowance of £11,520 (including up to £5,760 in cash) is per person, per tax year.

You will have the full choice of Isa options open to you from the start of the new tax year on April 6. You can save with the same organisation you already have your fixed-rate account with, though I much doubt you will be able to add to the same account. Or you are free to take out an Isa with a new provider.

Above all, shop around to get the best deal to suit you.

The hunt is on for late aunt’s endowment

R.T.writes: A late aunt  of mine mentioned an endowment that she wanted to benefit her three nephews. But we have found no trace of any paperwork. Is there a way to check if a policy existed?

M.G.replies: In the absence of any paperwork, one avenue open to you is to contact the Unclaimed Assets Register run by Experian on 0844 481 8180 or at There is a flat fee of £25 for the search.

The right thing to do would be to inform your aunt’s solicitor, executors or representatives, who are responsible for winding up her estate, of the possible existence of a policy and have them chase it up.


Sunday, March 31st, 2013 EN No Comments

Cedar Brook Financial Partners Welcomes Kelly Smith, CFP®

Cleveland, OH, March 31, 2013 –(– Cedar Brook Financial Partners, LLC is pleased to welcome Kelly Smith, CFP®, Associate Director, Wealth Strategies Department of the Cleveland-based wealth management firm.

Ms. Smith joined Cedar Brook to serve as an Associate Director in the Wealth Strategies Department. This position provides the firm’s Partners with financial research and analysis support to aid them in developing comprehensive and sophisticated wealth management plans for their clients.

Prior to joining Cedar Brook, Ms. Smith served in several roles at Cleveland’s Beacon Financial Partners. At Beacon she was responsible for the wealth management department until 2011, when she became a Senior Advisor, providing planning and operations support for high net worth individuals and physicians. Before Beacon, Ms. Smith served clients at other local planning firms where she developed an expertise in matters relating to high net worth clients.

“I’m thrilled to have Kelly join our team. Her 20+ years of experience in the financial services industry enables her to contribute to our planning process from day one. Her extensive tax background allows us to add value to all of the clients and professionals we serve. She is a great addition to our team and has the background and experience in assisting the firm’s Partners in the development of comprehensive financial plans. We’re lucky to have her,” said Kristen Moran, CFP®, Director of Wealth Strategies.

About Cedar Brook Financial Partners
Headquartered in Cleveland, OH, with offices in West Bloomfield, MI, Naples, FL, and Clearwater, FL, Cedar Brook Financial Partners is one of the largest independent wealth management firms in the region, according to Crain’s Cleveland Business 2012. Cedar Brook’s now seventy-plus professionals deliver customized, personal services including comprehensive wealth strategies, investment and insurance advice, retirement plan consulting, and group benefit programs to physicians, corporate executives, privately held business owners, and families. Cedar Brook has been recognized again, as a Top Workplace in Northeast Ohio by WorkplaceDynamics according to the Plain Dealer’s 2012 study. The firm offers securities through Securities America Inc., member FINRA/SIPC. Advisory services are offered through Securities America Advisors Inc., an SEC Registered Investment Advisor. Cedar Brook Financial Partners LLC and the Securities America companies are not affiliated. Securities America and its representatives do not provide tax advice.


Sunday, March 31st, 2013 EN No Comments

The growth is in the Rs 5-10 crore segment

Previously people trusted our judgement. Today, they are much more aware. The big conversation today is about the fees.

Having access to a whole lot of SME clients through their lending relationship is ING Vysya’s niche, says Sonalee Panda, Group Head, Private Banking and Wealth Management at ING Vysya Bank. After all, it is this segment of the market whose needs are becoming more sophisticated but not many are paying attention to it, she says.

What are the services you offer under private banking?

We have been in the private banking business in India since 1995. We offer investment advisory across equity, debt and structured products through non-discretionary Portfolio Management Services (PMS). We also offer what is called the investment banking service. For example, most of our private banking clients are entrepreneurs.

So when they want to grow bigger and move to newer markets, they are looking for strategic investments – something like a private equity deal or a venture capital function. We do it for them, but in a small ticket size of Rs 25-50 crore.

The next thing we do is estate management. Say a client has built a business and made a lot of money, we help in protecting the wealth. Then if the second generation is not interested in it, through our investment banking practice we find a person who can take over the business. A fourth service is structured credit.

How do you distinguish the wealth management services from private banking?

The typical wealth management customer is mass affluent and he begins thinking of creating wealth for his future needs as he touches 30-35 years of age.

So wealth management is when you look at this customer, understand his profile, his requirements and then do the asset allocation accordingly. This we started doing in 2007.

Besides equity and debt, in wealth management, we offer structured products, PE deals and also real estate investment options. But the transaction sizes there will be about Rs 25 lakh. When we talk about the same in private banking, we are talking about Rs 25 crore.

Who is your typical customer?

Before ING exited the private banking business in India in 2010, we were catering primarily to the global Indian. Many customers were from UK, Malaysia, South America. So we could offer a lot of offshore products. After the exit, our focus is more domestic.

If you see where the growth is happening in India, it is probably among those who have about $1- 2 million liquidity (Rs 5-10 crore approximately). You can see wealth growing among entrepreneurs.

But this segment is not getting the service it needs. Most banks are treating these customers as wealth management clients but their needs are changing and there is a niche available right now. Secondly, because of Vysya Bank legacy, we have access to SME relationships.

This is our USP. These customers are not very big; they need transactions in the Rs 25-50 crore bracket and nobody is catering to that segment right now. We have 527 branches and SME lending happens across these. So we are able to see the customer’s need and offer services accordingly.

Have you seen the risk appetite of Indians changing after 2008?

Completely. Till 2008, everyone was putting money only in equity. Now everyone wants only gold, real estate to some extent and obviously debt. We tell our customers, “If you buy gold and the price falls, don’t sell it; keep it for 15-20 years.

Similarly, if you enter equity markets at 21000 levels then why should you sell it at 8000 levels? Why don’t you hold it for 10 years?” But today, the consumer is much more risk averse.

Second, previously people were not so aware of what you were selling them and they trusted our judgement. Today, they are much more aware. Another big conversation today is about the fees.

Five years back, I would not have written the fees anywhere. Today when I get a signature from the customer, he signs saying that he has read and is aware of the fees.

Do people actively ask for options abroad?

Most people are interested in the $ 2,00,000 free remittance available to resident individuals. They have a relatively positive view on the US. They want to know what they can do to get there.

However, the maximum that they typically invest offshore will be about 10-20 per cent of the total. The average wealthy Indian believes India is the place. They also understand the markets here much better.


Saturday, March 30th, 2013 EN No Comments

Citic Bank Nonstandard Investments Exceed Limit

SHANGHAI—China Citic Bank Corp. offered a glimpse on Friday of the potential impact of new government regulations reining in a type of high-yield investment product, saying its portfolio exceeds one key limit by a considerable margin.

State-controlled Citic is only the second major Chinese lender to disclose whether it would be in compliance with regulations released Wednesday tightening control of a type of investment sold by banks called wealth-management products. Among the requirements, the new regulations cap the portion of such products that regulators label “non-standard” and consider riskier.

On Friday, Citic Vice President Zhang Qiang said at a press …


Saturday, March 30th, 2013 EN No Comments

Wealthy Families Leveraging Up

“In this environment of general deleveraging—nations are deleveraging, individuals are deleveraging—we’re actually seeing the high-net-worth space taking on leverage. Our lending business is up 66%, year on year.”

We were at the New York restaurant Vitae when Mark Jordahl, president of the Minneapolis-based U.S. Bank Wealth Management, dropped the line that made my salad fork halt midway to my mouth. Not a lot can stop me from eating, I confess, but Jordahl oversees $37 billion in rich-folk assets at parent U.S. Bancorp (USB), which ranks his unit the 19th largest high-net-worth manager in the U.S. (“Best of Breed,” Sept. 17, 2012.)

So I listened extra hard when the Midwestern banking executive talked about increased leverage, not least because spotting a new investment trend among the wealthy is like spotting a new car technology at the Formula One races; usually a version of the new technology eventually shows up in mass-­market cars. Everything from hedge funds to tax-sheltered IRAs were product ideas that made their way downstream in some  form after first getting a foothold among the gilded set.

Jordahl reminded me that his clients “don’t typically borrow because they have to borrow,” but rather “lever up because of opportunity.” So this new leverage reflects the fact that America’s wealthy are feeling better about the markets and are using debt to aggressively take advantage of buying opportunities, whether in real estate or in the broader market.

“It’s ­really the reverse of, ‘If I buy a 10-year Treasury, how can I possibly have a positive real return over 10 years?’ In this case, it’s, ‘If I borrow at 3%, how can it possibly not work out if I am reasonably patient?’ ” The new leverage is another sign of the “feel good” rise that Penta documented in its recent cover story on ­private-bank asset allocations (“More Stocks, Fewer Bonds,” March 4, 2013).

As we moved on to the crisply grilled arctic char in a broth with some very weird-looking mushrooms, I asked Jordahl to give me his take on how the markets will continue performing in 2013. “I said last year, ‘I think 2013 will have healthier investment sentiment, and less-healthy market returns.’ So far, it’s been a really healthy market return, and healthy investor sentiment.”

The West Coast-cool of Ascent Private Capital Management. It’s Mark Jordahl’s private bank for families with more than $50 million to invest. Credit: Architect Garcia Tamjidi / Photo Joe Fletcher

After the usual caveats about the reckoning coming due on deficits and cheap money, Jordahl predicted the markets have another 6% or 7% to climb before year’s end, partly because his clients’ deposits are also up significantly. “We’re still seeing investors parking money on high-quality balance sheets, so there is a lot of fuel there to find its way into the market. Our deposits are up nearly 60%, year on year.” By the end of 2013, Jordahl predicts, there still “won’t be inflation” but a sober discussion “about when the Fed will take away the punch bowl.”

Jordahl, 52, is silver-haired and surprisingly easy to make laugh—not the usual stony countenance I come across in private- bank chambers. I suspect that he isn’t on a lot of radars because he hides out in Minneapolis, far from the traditional money centers. But high-net-worth client balances (assets under management, deposits, and lending to clients with more than $5 million) have risen 24% since Jordahl took charge in 2008.

His sprawling operation is now a three-tier wealth pyramid with a total $110 billion in assets under management: The Private Client Group handles clients with more than $100,000 in investable assets. The Private Client Reserve—which sounds like a particularly good Sauvignon Blanc from New Zealand—serves clients with more than $1 million to invest. Jordahl then launched, in 2011, Ascent Private Capital Management, a dedicated private bank within U.S. Bank for clients with $50 million or more. It’s a cordoned-off playpen for the seriously rich.

Ascent currently has 70 family clients with an average of $200 million each, and announced its arrival on the scene by unveiling offices by the San Francisco architects who designed the Pixar Animation Studios. The bank’s minimalist rooms and decor emulate a hip boutique hotel, and include family “learning labs,” where the white walls can be written on and the furniture moved around. Ascent regularly hosts “a sit-down dinner for 20 clients,” says Jordahl, so clients feel as if they are part of the office and can start a dialogue with other members of their tribe. Ascent will be running its funky shops from Minneapolis, Cincinnati, Denver, Seattle, and San Francisco by the end of the year.

“There is plenty of mahogany out there,” he said. “We didn’t need to replicate that. We’re designing a model we think is quite different. The office space is consistent with that idea.”


Friday, March 29th, 2013 EN No Comments

Citic Bank Nonstandard Investments Surpass Guidelines

BEIJING—Nonstandard investments accounted for 64%, or 151.5 billion yuan ($24.2 billion), of all wealth-management products at China Citic Bank Corp. …


Friday, March 29th, 2013 EN No Comments

Sullivan & Cromwell Scores Roles on Two Wealth Management Deals

Sullivan Cromwell and two other leading global firms have picked up roles this week on deals involving a pair of wealth management divisions.

In one of those transactions, Morgan Stanley announced Wednesday that it has agreed to sell its European private bank to Credit Suisse Group for an undisclosed sum. The unit, which has $13 billion in assets under management, includes all of Morgan Stanley’s wealth management businesses in Africa, the Middle East, and Europe, excluding Switzerland.

Clifford Chance MA partner Roger Moore and associate Candice Hall are taking the lead advising Morgan Stanley on the deal, which is expected to close in the third quarter of this year. The Magic Circle firm represented the New York–based financial services company earlier this month on a real estate deal in Germany.

Clifford Chance’s ties to Morgan Stanley run deep. Last year the firm hired Monica Sah, a former managing director and head of legal for Morgan Stanley Smith Barney’s international wealth management unit, as a financial regulatory and capital markets partner in London. Sah was previously an associate at the firm.

Keith Clark, a former general counsel for Morgan Stanley International, previously served as chairman of Clifford Chance, where he helped broker the firm’s groundbreaking transatlantic merger with Rogers Wells in 2000. Clark left the London office of the combined firm (whose integration issues were well chronicled in The American Lawyer) and joined Morgan Stanley in 2001.

Clark retired in 2009, around the same time that former Morgan Stanley in-house legal chief Gary Lynch was promoted to vice-chairman of the banking giant, while head of litigation Eric Grossman was elevated to the new position of general counsel for the Americas. Lynch, a former partner at Davis Polk Wardwell, eventually resigned in March 2011.

In January 2012, Grossman, another former Davis Polk partner, was named Morgan Stanley’s new general counsel, only a few months before the return of predecessor Francis “Frank” Barron to Cravath, Swaine Moore. Another lawyer, Yale Law School graduate Gregory Fleming, currently serves as the head of Morgan Stanley’s global wealth management and investment management divisions.

SC is advising Credit Suisse on its acquisition of Morgan Stanley’s EMEA wealth management arm, a deal that Reuters reports will help Switzerland’s second-largest bank offset its exposure to the oft volatile world of investment banking.

Urs Rohner, who served as Credit Suisse’s general counsel before being promoted to chairman in April 2011, worked briefly at SC in the late eighties and spent the following decade as a partner at leading Swiss firm Lenz Staehelin. (Neil Radey serves as managing director and general counsel for the Americas at Credit Suisse, while the Zurich–based bank’s global general counsel is Romeo Cerutti, who also sits on its advisory board.)

As it happens, SC had its hand in another wealth management deal announced this week, advising Genworth Financial on the $412.5 million sale of its wealth management unit to private equity firms Aquiline Capital and Genstar Capital.

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Friday, March 29th, 2013 EN No Comments

Integrated Wealth Management Expands into Orange County, CA

Palm Springs, CA, Mar 28, 2013 (GLOBE NEWSWIRE via COMTEX) —
Integrated Wealth Management continues their
growth streak into Orange County, CA, with the addition of two new
financial advisors. Nick Cunnington and Mike McConnell
are the newest members of the Integrated Wealth Management
financial advisory team, leading the firm’s Orange County

“Integrated Wealth Management’s expansion into Orange County has
been a part of our strategy for some time. I’m excited to
welcome Nick and Mike to the firm,” said Integrated Wealth
Management’s, President and CEO, Jim Casey. “We currently
serve a number of clients residing and working in Orange County,
and this expansion will only help us continue to provide the
highest level of service.”

Cunnington joins the firm from UBS Financial Services in Irvine,
CA. Prior to his career as a financial advisor,
Cunnington spent five years at a prominent national insurance
brokerage providing insurance and risk management solutions for
individuals and businesses. At Integrated Wealth
Management, Cunnington leverages his experience with business
owners, executives and professionals by specializing in developing
customized investment strategies and creating retirement plans for
newly retired business owners, executives, and

McConnell entered into the wealth management industry after a
career in high-tech consulting in the Silicon Valley.
As an Integrated Wealth Management Financial Advisor, he
specializes in highly personalized wealth management services to
meet the diverse financial needs of his clients. McConnell is
focused on assisting his clients successfully navigate their
evolving financial challenges, as they move through the various
stages of their business and personal lives.

Integrated Wealth Management is an independent wealth management
firm representing hundreds of individuals, businesses, and
nonprofits. Integrated Wealth Management focuses on helping its
clients attain their current and future financial goals by
providing an exceptional level of personalized service and
financial advice, and adapting quickly to changing client
circumstances, market conditions or tax laws. The
full-service firm provides: Wealth Management Services,
Fiduciary Services, 401(k) Design and Management, Investment
Reporting Services, Financial and Retirement Planning and more.
They have offices in Marina Del Rey, Palm Springs and Palm
Desert. For more information: or 866-888-6563 x.

        CONTACT: Erin Scott
                 Integrated Wealth Management

(C) Copyright 2013 GlobeNewswire, Inc. All rights reserved.


Thursday, March 28th, 2013 EN No Comments

Wealth Management Regulations Weigh on China Bank ETF

Shares of the Global X China Financials ETF (NYSE: CHIX) are trading lower by almost 1.7 percent Thursday after Chinese regulators moved to curb proliferation of opaque wealth management products in the world’s second largest economy.

Most of the wealth management products, which are sold to investors looking to add some yield to their portfolios, contain government and corporate bonds, as the Wall Street Journal reported. Still, others are backed by more complex investments such as real estate loans, gold and even pricey jewels, according to the Journal.

Since China keeps interest rates for basic bank deposits low, the wealth management products have surged in popularity. By some estimates, the amount held in the controversial instruments was a quarter of Chinese GDP last year.

Concerns about the products’ liquidity and the risk they pose to Chinese banking system at large prompted new regulatory action. The China Banking Regulatory Commission said on Wednesday that banks must clearly link wealth-management products with specific assets, the Journal reported. Banks must also disclose who is using the products and audit each product.

The news has clearly had an adverse impact on CHIX today. Interestingly, the Journal points out China’s four largest banks – Bank of China, Industrial Commercial Bank of China Ltd., China Construction Bank and Agricultural Bank of China – only issued 28 percent of all wealth management products in China last year. That quartet of banking behemoths combine for over 34 of CHIX’s weight.

For its part, CHIX is not entirely allocated to bank stocks. Real estate and insurance stocks combine for over 42 percent of the ETF’s weight, according to Global X data. With today’s slide, CHIX is down nearly 12 percent year-to-date.

The iShares FTSE China 25 Index Fund (NYSE: FXI), the largest, most heavily traded China ETF, is also being hit on the news. FXI is off 1.4 percent today. China’s big four banks are all found among FXI’s top-10 holdings and the financial services sectors accounts for almost 57 percent of that ETF’s weight.

FXI is also down about 12 percent this year. Regarding CHIX, if nothing else, it can be said the ETF is cheap with a P/E ratio of 7.33 and a price-to-book ratio of 1.04, according to Global X data. That compares to FXI’s P/E of 13.14 and a price-to-book ratio of 1.68.

For more on ETFs, click here.

Posted in: Long Ideas, News, Sector ETFs, Short Ideas, Wall Street Journal, Emerging Market ETFs, Events, Global, Markets, Trading Ideas, ETFs, Best of Benzinga


Thursday, March 28th, 2013 EN No Comments