Private Banking & Wealth Management Expert Witness

Private Banking & Wealth Management Expert Witness

Private Banking & Wealth Management Expert Witness

Private banking is the service provided by banks to high net worth (‘HNW‘) individuals and their associated companies who need banking and to invest substantial assets.

At Expert Evidence, we have previously advised in cases where investments were made which were inappropriate for the client, where the financial institution has not carried out instructions correctly or where the investment advice was claimed to be negligent.

Within the area of Private Banking we continue to advise on areas such as Asset Allocation, Investment Research and Stock Selection. This is a difficult area to get right, but having substantial experience in this area has enabled the advisors and experts to maintain a close relationship with market practice.

Expert Evidence has been involved with most of the major financial issues that have reached the courts such as Interest Rate Swaps Agreements (‘IRSAs’), the Libor Fixing Scandal and also situations such as those involving KeyData, MF Global, AIG and Madoff Securities.

Client Asset Allocation

Client asset allocation is a complex business shaped by each client’s individual influences and expectations, so building an investment strategy off the back of this becomes a unique challenge, and is at the core of financial planning.

Time horizons, risk, return, and market volatility are just some of the factors that need to be weighed up when choosing the right asset allocation for a client. As a result there have been a number of cases where clients’ assets have been inappropriately allocated either due to improper risk assessment, lack of market or client knowledge, or failure to implement the necessary due diligence.

HNW Products

The private banking and wealth management industry has developed and grown quickly in recent decades to service the unique needs of the emerging HNW market.

There are multiple services and products available to high net worth individuals, and these have their own characteristics and complexities whether due to tax implications, or the fact that a HNW client may expect more sophisticated and transparent products and reporting.

Structured Products

Structured Products is a collective term for both Structured Investment Products and Structured Deposits. A structured product is a packaged investment strategy and can be used as part of a client’s asset allocation process offering features that don’t exist within standard products. However structured products can be complex and carry additional risk to standard products.

Expert Evidence has been involved with a large number of cases which have primarily been determined by the investment sophistication of the clients and whether the work conducted by the financial institution was “suitable” and “appropriate” as required under the FSA Conduct of Business Sourcebook. The UK regulatory environment has strict rules determining the way that investors are categorised into Retail and Professional investors at the outset of a relationship to provide investment services. Expert Evidence has advised on a range of situations involving Unit Trusts, Structured Products, Interest Rate Swaps and Derivatives to determine the knowledge level of the underlying clients and the investment institutions responsibilities.

Dealing with Professional Customers, Per Se and Elective

A professional client is either one who is a per se professional client or an elective professional client. A per se professional client is a company, trust, authority or body of a certain size and income or one that is authorised to operate in the financial markets. An elective professional client must meet the criteria set out by the FCA, which includes qualitative and quantitative tests to establish capability to make investment decisions in the case of the former, and minimum criteria relating to value and/or number of trades and number of years operating in the financial sector in the latter. Expert Evidence have a wealth of knowledge in dealing with both kinds of professional customer, with multiple years’ experience across the wealth management and private banking sectors.

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