Archive for March, 2015

War of words escalates between Alliance and Elliott


Katherine Garrett-Cox heads under-fire Alliance Trust


The increasingly acrimonious row between Alliance Trust and Elliott Advisors has taken a fresh twist after the US hedge fund criticised “unsubstantiated attacks” on the directors it wants installed on the wealth manager’s board.

Dundee-based Alliance said last week that the trio – former SG Warburg executive Anthony Brooke, ex-Legal General Investment Management chief executive Peter Chambers and Rory Macnamara, a former ­senior corporate finance professional – “cannot be considered to be independent”.

The firm, headed by chief ­executive Katherine Garrett-Cox, claimed their addition to the board would allow Elliott, which has a 12 per cent stake, to “pursue its own agenda and engineer a quick exit from its shareholding”.


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Elliott responded yesterday by saying Alliance had failed to engage on “matters of substance and resorts to personal attacks in a manner unbecoming of directors of a public company”.

It added: “By any standard of accepted governance principles, the nominated directors are truly and fully independent and, if elected, would not countenance being ­unduly influenced by any particular shareholder in any way.”

Its statement comes after former Alliance non-executive Tim Ingram said he would be voting in favour of Elliott’s bid to shake up the boardroom at the Tayside institution’s annual meeting on 29 April. Ingram, who served as a director from 2010 to 2012, chairs the Wealth Management Association and in an open letter to shareholders said: “The overall performance of Alliance Trust in the medium term has been dismal.”

Analysts at JP Morgan Cazenove – Alliance’s corporate broker – said the interventions from Ingram and Elliott had landed a “few heavy blows” on Alliance, which the hedge fund said has underperformed its peers “over all relevant return periods”.

In a note to clients, the broker added: “It is difficult to see shareholders tolerating underperformance from this strategy over the next few years and, were that to be the case, pressure would clearly grow to outsource some or all of the investment management functions.”


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Tuesday, March 31st, 2015 EN No Comments

Lifting the Lid

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Where experts and professionals share insights and inspirations to grow business and build careers

Mar 31, 2015

What are your clients really thinking about you?  Surely it’s crossed your mind, perhaps more than a few times. Much can be learned about strengthening and building relationships with the ultra-affluent by understanding where you fit in your clients’ advisor framework and how they evaluate what it is they want from advisors.  By gaining such knowledge, it will also give you insight into how they actually view their relationships with advisors.

Ascertaining where you fit in the mix of your clients’ advisor stables is a good first step. Close to 60 percent of high-net-worth clients concentrate over half of their investments with a primary advisor, according to a survey conducted last year by the Institute for Private Investors (IPI).  Additionally, private investors have on average two to five advisor relationships.  They keep multiple relationships to help diversify risk, to ensure they’re staying on top of the latest thinking as a check to the services provided by their primary advisor and for niche services.

The next step is to understand how existing and potential clients approach hiring, vetting, monitoring and working with advisors.  Below is a fly-on-the-wall vantage point of what the ultra-affluent think about working with advisors.

Six Best-Practice Tips

Here are tips from affluent family members:

  1. “When hiring an advisor, ask multiple questions to a number of different advisors and then go back to ensure everyone has been asked the same thing.  This will provide solid grounding on the differences between providers whether you choose to make a hire or not.”

As an advisor, this means you should be prepared to answer all questions and to be aware of the fact that you may be compared to other types of providers, as well as similar ones.  Be able to articulate your core strengths and what differentiates you from direct competitors and other types of providers.  Be specific as to how you execute services, but also provide your general philosophy and approach to working with families of affluence.  Remember, the affluent use a number of advisors.  Find out what services they feel they view as core to determine where you fit and where they seek niche specialists.

  1. “Think about hiring your own advisor as opposed to using only those others in your family have hired and are using.”

As family members gain greater responsibility over their wealth, it’s only natural that they may want to add an additional advisor to their family’s advisor group.  Sometimes this is done as a preliminary move toward shifting the wealth under their control to the new advisor.  Other times it’s not. If you haven’t already established a relationship with the wealth holder, it’s highly likely the time has past.  But if you do have a relationship, continue to nurture it.  Try not to take the move personally and be as helpful to the new advisor and the family member as possible.

  1. “Remember and remind your advisors that the account is yours, not theirs.”
  2. “Ask questions and ensure they’re answered.  Challenge your advisors.”

Points three and four sharply underscore that advisors too often discount their clients’ views or arent attentive in soliciting information from them or in providing real answers to questions. No question should ever be sidestepped or pushed aside no matter how busy you may be or how simple or irrelevant you find the inquiry to be. If youre not being fully attentive to your clients or dismissive in some manner, your behavior is being dually noted, discussed with others and remembered.

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Tuesday, March 31st, 2015 EN No Comments

MBA, CFA or other? Top qualifications in Asian private banking

MBAs in demand in Asian private banking

Needed in Asian wealth management

Which qualification will get you a job in Asian private banking? We’ve looked through the eFinancialCareers database to identify the most prevalent qualifications among wealth managers in the region. The answer is not exactly what you’d think.

Firstly, very few people have a specialist private banking qualification. The CACS – a basic set of private-banking competency standards in Singapore that is popular among Asia’s private bankers –  is found among just 2% of wealth management professionals. Similarly, only 2% have a masters in wealth management.

Secondly, qualifications like the courses run by the Chartered Institute for Securities Investment (CISI) and Investment Management Certificate (IMC), which is an introduction to the industry, aren’t big among Asia’s wealth managers – fewer than 2% have one of these too.

Thirdly – and surprisingly, a CFA qualification won’t really help your chances of getting an Asian private banking job either. Just 10% of Asian private bankers in our database mention CFA on their CV.

So what will get you a wealth management job in Asia? Try an MBA. About a quarter (24%) of wealth management professionals in Asia have an MBA, according to the eFinancialCareers CV database.

CFA MBA 2

What makes the MBA so popular? Josie Ling, a consultant at search firm Eban in Singapore, says an MBA can help private banking assistants become full relationship managers. She adds that MBA-equipped candidates find it easier to talk to clients: “In Asia, a high proportion of high-net-worth clients are entrepreneurs, so RMs need to understand their business needs as well as their private financial needs.”

Rahul Sen, head of private wealth management at search firm The Omerta Group in Singapore, says MBAs also teach broad understanding of client behavioural and client management skills.

What does this mean for would-be private bankers who are studying other courses? Ling says you shouldn’t despair – particularly if you’re studying an MSc in Wealth Management. Now that Singapore Management University offers a wealth management MSc, she says the course is growing in popularity: “It focuses on client-facing skills much more than a general MBA does.”


Related articles

The top 50 universities for getting a front office investment banking job

“Ugly side” of Asian banking revealed as firms hire, fire then keep clients

How to change banking jobs in Asia without losing too many clients


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Tuesday, March 31st, 2015 EN No Comments

Wealth Management Madness 2015 Finals: The Case for Janet Yellen

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Complete the Wealth Management Madness 2015 Bracket

There is no way that I could possibly write something flattering about the powers in central banking – or so I thought. Ever since Alan Greenspan embarked on a journey to transform the Fed into the ultimate comforter to economic and financial affairs, likely having changed the path of what constitutes free markets and natural price formation, the century-old monetary policy business has been suffering from a bruised reputation. 

Of course, then there is always the chance for an “icebreaker,” and who wouldn’t be set more at ease with a good joke, especially when dealing with difficult topics? It was in this respect that my interest in Janet Yellen was piqued. From transcripts of a 2008 Federal Open Market Committee (FOMC) meeting, we can not only learn that our central bankers are a bunch of jokesters, but also that Ms. Yellen, early on, understood the very core of a crisis that would soon grip the world economy. 

FOMC Meeting, December 16, 2008, Ms. Yellen: “An accounting joke concerning the balance sheets of many financial institutions is now making the rounds, and it summarizes the situation as follows: On the left-hand side, nothing is right; and on the right-hand side, nothing is left.” [LAUGHTER]

What has been debated and delayed for too long in Europe (and Japan during the late ‘90s) became the focal point of U.S. monetary policy: the recapitalization of the domestic banking system. It is commonly accepted that strong banks are the foundation of a healthy economy, and the relative outperformance of the U.S. vs. other global economies is a clear testament to this claim. With the same critical approach as in her FOMC “sketch,” now-Fed-Chairwoman Yellen is focused on the unwinding of historically unprecedented policy support. 

Sure enough, to end what was considered “infinity” not long ago―i.e. an overly generous bond-buying program by the Fed―took courage and skillful political maneuvering. Not only has Janet Yellen created “new firepower” for potential future crises that may impact the financial system, but she has also addressed the risk of market participants becoming too entangled in a monetary illusion, as well as the mounting debt burden to be carried by future generations. The gradual increase in rates, as she recently suggested, is part of the same focused objective. 

Unlike her predecessors who were cryptic, if not mysterious, in their communication, Janet Yellen is direct, practical, and engaged in real-life topics. As an employment economist, she understands that ultimately the strength of the labor market will be the carrying force of a sustainable domestic economy. Her focus on “putting money in people’s pocket,” even dismissing the risk of wage inflation, at least for now, is applaudable; there is no better measure of household health.

Janet Yellen has shown nothing but dedication and skill in re-anchoring monetary policy into a realistic socioeconomic framework, away from operating in a steady and overextended crisis mode. For her determination to end the unprecedented “madness” of the Fed’s current monetary policy pattern, she deserves to be crowned the victor of Wealth Management March Madness.

Matthias Paul Kuhlmey is a Partner and Head of Global Investment Solutions (GIS) at HighTower Advisors. He serves as wealth manager to High Net Worth and Ultra-High Net Worth Individuals, Family Offices, and Institutions.

 

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Tuesday, March 31st, 2015 EN No Comments

Sustainable remuneration structures critical to life industry: CBA

30 March 2015

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Tuesday, March 31st, 2015 EN No Comments

`Bullish’ on China Stocks, `Positive’ Japan, Low Says

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Monday, March 30th, 2015 EN No Comments

The Death of the Hedge Fund?

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Given their poor performance and poor image, many hedge fund managers are backing away from using the term to describe themselves, reports the Wall Street Journal. Since 2007, the number of times hedge funds were mentioned in marriage announcements is down 20 percent, the publication says. What are some common replacements? Alternative asset manager, investment holding company and private partnership are a few terms you might hear instead.

The Really Useful App

About 40 percent of cell phone owner access social networks from their phones and 28 percent do so on a typical day, according to 2014 data from Pew Research. This trend prompted Hearsay Social to launch new mobile apps for iPhone and Android on Friday, which allows its 100,000 advisors and financial professionals to publish posts to their social networks and manage their social interactions. “The app allows me to capture content more readily and post to my LinkedIn account at a moment’s notice,” says Jason Graham, regional marketing director at Penn Mutual.

Be Convertible

Convertible bonds are the way to deal with this market volatility, Calamos Investments CEO John Calamos Sr. said on “Squawk on the Street” on CNBC on Friday. He said that the possibility of the Federal Reserve raising interest rates is the reason for the market unpredictability, adding that it is going to be difficult to time when the hike will occur. “When it happens, everyone’s going to be surprised,” Calamos said. 

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Monday, March 30th, 2015 EN No Comments

Swiss banking model is ‘dead’, says Abu Dhabi finance centre chief

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Sunday, March 29th, 2015 EN No Comments

U.S. Healthcare Software Triggers Client Reality Check

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(Corrects sixth paragraph to say that the Raymond James’ calculator is based on concepts from MIT AgeLab, not a direct collaboration)

By Dan Butcher

March 27 (Reuters) – Brokerages are rolling out software to help financial advisers with a challenge that can seem like fortune-telling: projecting clients’ retirement health care costs.

Rising healthcare expenses can eat away at retirement savings. Future total healthcare costs for a 65-year-old couple retiring this year will average $394,000 in today’s dollars, according to a report this week by HealthView services, a retirement healthcare data company in Danvers, Massachusetts.

But a couple that retires in 2025 at age 65 will need $464,000 to fund those same expenses, which include various Medicare premiums, copays and dental visits. The bills only rise as couples live beyond average life expectancies, according to HealthView.

Financial advisory firms are beefing up their software to tailor projections of clients’ retirement healthcare costs. The figures can drive home reality, especially as the tools become more sophisticated, advisers say.

The jolt is much-needed. Many Americans age 50 or more do not include healthcare costs in their retirement planning, even though the price tag is their greatest concern, according to a 2014 Merrill Lynch survey.

Raymond James added a new healthcare calculator to its financial planning software last year based, in part, on concepts developed by the MIT AgeLab, a Massachusetts Institute of Technology (MIT) research program that encourages the development of new technologies to support human longevity.

The calculator helps stimulate retirement planning discussions at Briggs Wealth Management in Clearwater, Florida, a Raymond James-affiliated firm. Advisers Kimberly and Dennis Briggs use it to estimate everything from future Medicare premiums to long-term care insurance premiums, she said.

The tool, part of a broader financial planning analysis, relies on clients’ answers to questions about family histories, chronic illnesses, and other factors.

Clients then review several future healthcare scenarios, which can be one based on their current strategy, and two others with and without long-term care insurance. The analysis, for example, showed one couple whose families had a history of medical problems that buying long-term care insurance could boost the probability of reaching their retirement goals from 40 percent to 76 percent.

Achieving those goals can depend on curbing current expenses to save more, Kimberly Briggs said. Putting a number on future healthcare expenses can motivate clients to scale back vacations or buy a smaller house, she said.

Merrill Lynch launched financial planning software last year that uses interactive graphics and charts to help clients understand future healthcare costs. Clients remember information more easily that way than after a long conversation, said Susan Acker, a Merrill Lynch adviser in Rochester New York. They interact with the program on Acker’s iPad by tapping on icons to see research and charts about their future costs.

Small firms are finding healthcare-focused tools in off-the-shelf programs such as MoneyGuidePro, a financial planning program by PIEtech Inc in Powhatan, Virginia.

The results of the process may surprise clients. Healthy retirees, for example, typically spend more on healthcare than those with medical problems, such as diabetes, according to HealthView, the data provider. That is because good health often means living longer. (Reporting by Dan Butcher; Editing by Suzanne Barlyn and Cynthia Osterman)

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Friday, March 27th, 2015 EN No Comments

Coutts International to be sold to UBP

Singapore

ROYAL Bank of Scotland (RBS) Group has finally found a fit in Swiss bank Union Bancaire Privee (UBP) for its international wealth management business, it announced on Friday.

Both RBS and UBP did not disclose the sale price for Coutts International. On Friday, the

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Friday, March 27th, 2015 EN No Comments