Wealth managers are back in business as the economy proves. The difference between opening an account now and back in the Celtic Tiger is the raft of paperwork. You now set out your experience of the markets, your profile, your desired risk levels and then the wealth manager sends a profile report advising you whether you have or should low, medium or high risk investment appetite. The problem really lies with the overly simplistic Financial Regulator's guidelines on investment risk which silos government bonds in low risk (if you want to lose money!) and equities as high risk. These guidelines may be the rod to beat wealth managers who advise their clients that equities are the only show in town and are not as high risk as the regulator maintains.
Popular novelist Patricia Cornwell, author of a series of crime novels about fictional investigator Dr. Kay Scarpetta, is suing a New York accounting and wealth management firm that served as her financial manager for almost five years, alleging negligence and breach of contract which cost her and her company millions in investment losses and unaccounted for revenues. Cornwell, who reported eight-figure annual earnings during the period, said she fired the firm after discovering in July 2009 that her net worth and that of her company, was a little under $13 million, the equivalent of only one year's net income. She also claims in the lawsuit that the firm had borrowed several million dollars and lost millions by moving her from a conservative investment strategy to high-risk one without her permission.