| English term or phrase: The future is clear | Hat jemand eine Idee, wie man diese Überschrift übersetzen könnte?
http://www.ft.com/cms/s/0/0bfea408-5ebf-11de-91ad-00144feabd...
***The future is clear***
By Matthew Vincent
Published: June 25 2009 14:26 | Last updated: June 25 2009 14:26
Transparency, simplicity and liquidity. These words could easily have been written by the architects at the London practice of Livesey O’Malley to describe the principles behind their design for the headquarters of Commercialbank at West Bay in Doha, Qatar.
Officially opened last month, the building is the first in the Middle East to be constructed with “a full transparent curtain glass system” that regulates the angles of blinds to track the path of the sun throughout the day. Wealthy clients are ushered through the lobby’s glass atrium, to the four-storey Sadara lounge, where banking services are provided.
But, instead, those three words were being written earlier this year to describe a different structure: the foundations on which all private banking must stand in future if clients’ trust in their institutions is to be rebuilt.
They appeared as the watchwords of a survey of sentiment within the wealth management industry, conducted by wealth management consultancy Scorpio Partnership on behalf of Royal London Asset Management. Interviews with chief executives, chief investment officers, heads of asset allocation and fund selection at 32 wealth management institutions reached a clear conclusion: “Transparency, simplicity and liquidity look set to dominate the agenda across all asset classes during 2009.”
The survey also exposed the lack of these underpinning principles in the years leading up to the global financial crisis. It has taken the “collapse of funds, vehicles and institutions” and the ensuing “destruction of client wealth”, the survey reported, for wealth managers to realise that “due diligence has become more critical than ever”.
It has also taken the default of counterparties to opaque hedge funds and structured notes for clients to value stability over performance. Disclosure of fund managers’ tenure and team structures, the use of stop-loss systems and meetings with fund managers or portfolio specialists are also now “critical” to potential investors.
So can the industry let clients look into its internal procedures?
Nick Tucker, head of global wealth management for UK and Ireland at Merrill Lynch, says it must. “Transparency is something that is not new but it is in absolute demand, and we, as an industry, have to deliver,” he says. “If you take a multi-manager hedge fund, you have to explain what the underlying hedge fund managers do.”
Stan Bland, head of sales at RLAM, agrees. “To regain the trust of clients, wealth managers will work harder at communicating investment risks to clients and will require the underlying manufacturer of funds to provide greater clarity on their product,” he says.
But while wealth managers in glass houses throw stones at manufacturers, wealthy investors seem to have closed the shutters.
Of the big themes to emerge from the survey, two stand out.
First, clients are demonstrating an ongoing bias towards cash and bonds. Those interviewed for the survey admitted that their clients, burnt by exposure to equities, had retreated to cash, and now regarded only investment-grade corporate and sovereign bonds as safe assets.
From this, the survey analysis concluded: “Cash is, however, a temporary holding position as clients take stock of their wealth destruction, and scandals in the money markets cause clients to second-guess the safety of these ‘safe’ instruments.”
But it may prove a more permanent position for some investors. Because, second, clients are now using investment-grade corporate bonds as an alpha-producing element, with traditional “satellite” portfolio holdings in alternative assets being largely pulled out of portfolios.
This bulldozes one of the pillars of the old equity-led wealth management firm. Or, as Graham Harvey at Scorpio Partnership, puts it: “The compression in margins from equities and alternatives to cash and bonds is changing the commerciality of the asset management model.”
But that, fundamentally, is what has to change. While the industry focuses on “trying to rebuild client trust … using client segmentation and profiling techniques”, according to the survey, it really needs to be using transparent, simple, liquid investments – with low charges.
Exchange traded funds, for example, are being increasingly adopted. But the survey notes many wealth managers “are still wrestling with the lack of commission on these instruments”. Instead, they should be providing what Commercialbank’s glass façade was commissioned to achieve: a better reflection of their clients’ outlook.
Matthew Vincent@FT.com |
|   Olaf ReibedanzKudoZ activityQuestions: 5573 ( 18 open) ( 5 without valid answers) ( 35 closed without grading) Answers: 3010
Argentina
| | Local time: 10:16
|
|
The translation workplace 
peer agreement (net): +6