PBA 

  
Private Banking Advisory



 "There are so many professionals telling the security buyer what to do, that his self-preservation at times depends perhaps more on knowing what not to do - and when."
(Sydney B. Lurie)

The experienced Partner for the Investor with a substantial Portfolio

June 2016

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"The purpose of money is not to have to worry about it"
 




 

 


 


 

Advisor Rankings - treat with Caution


Barron's Magazine regularly publishes a list of  'Top Financial Advisors'. While this list covers only US-based advisors it creates more questions than it answers. First of all it should be no surprise that there is more than a hint of self-promotion as advisors apply to have their performance reviewed by the magazine. While we value Barron's highly and enjoy reading it for more than 45 years (We hope our age is not frightening readers away) the editors are faced with a major problem when tackling the question of actual investment performance - not performance as measured by assets under management (or advice). The latter measure is used by Barron's as a proxy for good performance - more assets should normally be a sign that the advisor is doing a good job. But there are limitations to this imputed correlation and investors would be well advised to have a look behind the glitz and glamour of a good marketing presentation and have a close - and impartial - look at the performance, risk and fee levels associated with any investment advisor they entrust some part of their investment funds to. On a closing note we can but admire the superhuman skills of some of the advisors listed as they seem to be able to handle 1,000 and more accounts. In that respect they really deserve a 'top' rating (Honi soit qui mal y pense, as the Queen would say).


Do you really want to invest in 'Alternatives'?

When being offered any financial product investors should always make sure that they really understand them and are not swayed by the sales pitch they get from a financial adviser. While the inherent risks in any product should be the main consideration there is also a need to have a good look at any fees associated with the product.




Model Portfolios - not perfect but better than alternatives

While the use of model portfolios by financial advisers may not be the best solution for all investors they often are a better choice than alternative solutions that are tailored to fit the particular needs of an investor. Asking about the past performance of the model portfolio allows to compare the achievements of each investment firm. After an investment has been made the investor can easily compare the performance of the portfolio and benchmark it against alternatives. If investors demand that their financial advisor contructs a portfolio that is subject to many constraints (risk tolerance for example) they will not be able to hold their advisor to account and properly measure his investment performance.


How safe is your Money?


Bankruptcies of major financial firms Lehman and MF Global have left a sour taste in the mouth as supposedly segregated customer/client money was exposed to grave risks or even lost. Banks may have difficulty keeping track of a myriad of transactions that routinely cross their busy desks but investors should be aware that securities they think they own are nothing else but electronic digits in some distant computer.


What Returns can you expect from Stock Investments?

The experts argue about the return that investors can expect to earn from investments in common stock. Research studies cover a period of nearly 200 years but even in the markets that have been subjected to the most careful analysis - the USA and the UK - the results are hotly disputed. But whatever the numbers may be - anything between 5 and 10 percent before inflation may be plausible - investing in shares is fraught with high risks for the ordinary mortals. The stock market is to a large extent a machine to enrich the selling insiders - current IPO plans are a good example. The German Banker Fuerstenberg said nearly 100 years ago - shareholders are stupid and insolent, stupid because they buy the shares in the first place and insolent because they even expect a dividend. That said, there are always great opportunities to profit from mistakes that 'Mr Market' makes, but to profit from them you have to be 100pct dedicated to the stock market game in order not to be fleeced.


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WHY YOU MAY WANT TO  TALK US


Ask yourself a few questions to find if Private Banking Advisory may be able to help you managing your financial affairs:

Do you know what is in your Portfolio?

Do you understand all the risks that are in your Portfolio?

Do you have certainty that your Portfolio is managed with as little cost as possible?

Do you think that your Portfolio was giving you the best possible performance?

If you cannot answer with a clear YES to all these questions you may want to talk to us!



 FUND MANAGER MONITORING
We monitor fund managers with respect to risk management, performance reporting and direct and indirect fees they charge clients for their services.



 PERFORMANCE MONITORING
We assist our clients in the monitoring of the investment performance achieved by their asset managers. Help is provided in the interpretation of reports provided by the managers as well as in the setting of realistic performance objectives.

 

 RISK MONITORING
Performance cannot be properly interpreted without due regard to the risks incurred during the investment process and we help our clients to appreciate the risks that were taken in order to achieve the reported investment returns.

 

■  COST CONTROL

Private Investors often are not familiar with all aspects of the investment management industry or do not have the time to make themselves familiar with all the disclosed and hidden fees that are charged to an investment portfolio.



"The professionals who help run your company must be first class. The professionals who run your private wealth for you must be even classier." (Felix Dennis, How to get rich)

 

   

   
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