Bad returns – brace for litigation
A major European wealth management summit has been told that companies operating in the private banking and wealth management arenas should brace themselves for more lawsuits from clients angry about the poor performance of their assets.
The Reuters Wealth Management Summit being held in Geneva this week was told by a partner from global law firm Baker McKenzie, Stephanie Jarrett that she believed there would be an increase in the level of litigation related to poor performance.
What is more, Jarrett believed that the recent sub-prime meltdown and the resultant tightening in liquidity would act as a catalyst for the higher levels of litigation.
She suggested that in such circumstances people would need appropriate training in how to deal with unsatisfied clients.
“One of the biggest challenges is training people to a level not just to do with investments but to do with clients,” Jarrett said. “They have to be able to do a lot more, recognise the issues and bring in outside advice.”
The Wealth Management Summit was told that earlier this year UBS had agreed to pay US$23.3 million to resolve accusations that it had steered thousands of inappropriate customers into fee-based accounts.
AUTHOR
Mike Taylor
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