Posts tagged as risk

10 May 2009

The Ombudsman highlights problems identifying and matching clients’ risk tolerance

Consumer complaints about investments have nearly doubled in the past year, according to the Financial Ombudsman Service’s annual review. Overall investment and pension complaints (now including mortgage endowment cases) jumped to 22,265 from 12,787 in 2007/08. Commenting on the report, Citywire’s ‘New Model Adviser’ forum singled out that ‘while the ombudsman recognised under performance of investments was a factor in some of these complaints, it said poor stock market conditions had exposed poor advice. In particular it identified a trend in complaints where financial advisers had not sufficiently considered clients’ tolerance to risk.’

read more Commentary by Stuart Fowler
03 May 2009

Trading low risk for higher income: banks in the forefront of ‘the next mis-selling scandal’

In today’s Sunday Times, Money editor Kathryn Cooper devotes her ‘Cooper on Cash’ column to the high street banks’ sales strategy of moving low-risk investors, including the elderly, out of low-yielding savings products into higher-yielding investment products that expose them to risk of loss of capital. Several of my recent items refer to this. She wants the FSA to ask itself whether it is enough to look at documentary evidence of the sales process ‘rather than casting its eye over the banks’ entire business strategies: is it right that pensioners should be moved en masse into corporate bonds and equities in their search for income?’.

read more Commentary by Stuart Fowler
04 Apr 2009

Equity risk: the inescapable impacts of business conditions

When living through a period of unusual economic instability it is useful to try to unlearn most of what we have learnt as a standard framework for savings and investment, and focus instead on the essential power, unpredictability and unfairness of business. In any form of market economy, business, and only business is the source of both national and personal wealth creation and it is also the source of the sometimes massive changes in economic fortunes between generations, even when the overall trend is for increasing affluence.

read more Insights by Stuart Fowler
04 Mar 2009

Equity risk is everywhere and unavoidable

6th April 2009, MMC Ventures
Presentation by Stuart Fowler and Joseph Clark

read more Events by Joe Clark
28 Feb 2009

Other people’s money: more on bankers’ ‘free option’

My item explaining why bankers can be relied on to bet the bank, because it is not their money, was echoed by an insightful piece from Nassim Taleb in the FT on 25th February. As a finance professor with over 20 years experience as a trader, Taleb is an authority on strategies with regular positive payoffs but occasional catastrophic losses, a central theme of his well-received book ‘The Black Swan: the Impact of the Highly Improbable’. Provided the blow-up can be put off for a few years, traders with participation in the profits and no participation in losses have every incentive to bet the bank. If large bonuses are paid every year it may only requires a few years of deferral of the blow-up to make it pay to play. Moreover, in finance the basis of the profit participation is often only an accounting recognition of a theoretical profit stream spread over a long period, not an actual realised gain.

read more Commentary by Stuart Fowler
news archives

News Categories:

Popular Tags:

Last 12 months:

» Archive of older content

» About our insights
» About our commentary
» About our research

Bookmark and Share

© 2010 No Monkey Business | Privacy Policy | Accessibility Statement | Legal Statement - Site created by HEARDcreative
No Monkey Business Limited is regulated by the Financial Services Authority. It is authorised as a personal investment firm to provide investment advice and discretionary investment management. It is an independent intermediary with no ties to any product firms and can advise on the whole market. It is covered by the Financial Services Compensation Scheme. HS.