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
Recommended for you
The Financial Advice Association Australia has implored advisers to reevaluate their exposure to AML/CTF obligations ahead of new reforms that will expand their compliance requirements significantly.
With UBS Asset Management chief executive, Alison Telfer, set to join Schroders, the firm has appointed a company veteran as her interim successor.
Compared to four years ago when the divide between boutique and large licensees were largely equal, adviser movements have seen this trend shift in light of new licensees commencing.
As ongoing market uncertainty sees advisers look beyond traditional equity exposure, Fidante has found adviser interest in small caps and emerging markets for portfolio returns has almost doubled since April.
