{"id":1150,"date":"2011-08-22T07:05:00","date_gmt":"2011-08-22T05:05:00","guid":{"rendered":"https:\/\/clusterfamilyoffice.com\/blog\/?p=1150"},"modified":"2011-08-22T07:05:00","modified_gmt":"2011-08-22T05:05:00","slug":"la-insoportable-levedad-del-banquero","status":"publish","type":"post","link":"https:\/\/clusterfamilyoffice.com\/en\/la-insoportable-levedad-del-banquero\/","title":{"rendered":"The unbearable levity of the banker"},"content":{"rendered":"

\"\"Just a few days ago, we received an email via our website from a private banking employee who shared some heartening and sincere reflections with us. In it, he explains his experiences and concerns, which have led him to share our view of the world of financial advice provided by banks. Naturally, he has asked us to protect his identity to spare him any professional difficulties. Our sincerest congratulations to this honest and far-sighted professional, and we wish him all the best in his financial and personal career. Here is his letter in full:<\/p>\n

\"\"Dear Gurus Mundi,<\/em><\/p>\n

First of all, I\u2019d like to congratulate you on your excellent blog, which helps all of us followers to learn a little bit more every day.<\/em><\/p>\n

His blog captivated me three years ago now, and for several reasons. At that time, I was working in the Private Banking Department of a savings bank and had just enrolled to start studying for the CFA charter. Having only just entered the world of investment, full of enthusiasm, eager to learn and with little knowledge, I suffered my first disappointment very soon, as there was something about the department where I worked that just didn\u2019t sit right with me.<\/em><\/p>\n

One of the Department\u2019s roles was to design structured products for sale through the commercial network, and such design consisted solely and exclusively of: \u00abif the IRS for the term allows me to spend X, I\u2019ll spend X-Y on the option, and that way we\u2019ll make a margin of Z basis points\u2026\u00bb<\/em> \u00abHave I missed something?\u00bb I wondered to myself. It must be that, as I\u2019m new here, I\u2019m not quite up to speed. I imagine they\u2019ll have analysed which index\/share\/basket, etc., would be a good buy (at least below its intrinsic value, without taking other considerations into account), so that we all benefit \u2013 clients and the firm alike. How naive of me \u2013 it must be that the ethical aspects of the CFA course were already \u2018getting on my nerves\u2019. As you might imagine, the return on these products over the 2008\u20132010 period was, as it happens, a big fat zero (or perhaps the guaranteed 1%!!!!\u2026\u2026over three years).<\/em><\/p>\n

\"\"<\/p>\n

We also managed investment fund portfolios for Private Banking clients within the department. This was my favourite part; it was better organised (or at least there were good intentions behind it). We always tried to maximise the risk-return ratio of the portfolios, analysed the markets (for better or worse) and devised a more or less appropriate asset allocation. However, I still felt there was something a bit off about the whole thing.<\/em><\/p>\n

Is it possible that we have just one type of client, differing only in terms of risk profile? Of course not. The client\u2019s investment profile was governed solely and exclusively by a volatility criterion, taking into account the ineffective MiFID regulation. But aren\u2019t we missing something? I don\u2019t know \u2013 perhaps the client\u2019s liquidity needs? Taxation? Other kinds of needs or preferences? I remember speaking to the person in charge of the Private Banking managers (what a euphemism!!!) and proposing the drafting of a document to guide investment and the client\u2013bank relationship, which would cover all these aspects (in addition to the incomplete advisory contract), only to be told that this was an \u00abAmerican fad\u00bb and that here in Spain it wasn\u2019t necessary. I\u2019m still lost for words.<\/em><\/p>\n

\"\"I imagine you\u2019ve already guessed the first reason why I\u2019ve been reading the blog non-stop ever since, and that is because I AGREE WHOLLY with the majority of your posts. Without going any further, I\u2019ve heard colleagues say on countless occasions about Greek bonds (quoting directly from your blog): \u201c\u2026the yield is very attractive, and we mustn\u2019t forget that this is sovereign debt issued by an EU member state, and the other countries will never allow it to default\u2026\u201d.<\/em><\/p>\n

The other reason is more personal. Faced with the pseudo-disappointment I mentioned earlier, I felt the need to seek answers to my concerns, and your blog (along with a magnificent talk by Mr John Siska in collaboration with CFA Spain), as well as making a personal impact on me, helped me enormously to discover the path I wish to follow: wealth management, not managing a financial institution\u2019s balance sheet through the use of its clients\u2019 money. Now all that remains is for me to achieve it.<\/em><\/p>\n

My sincerest congratulations and many thanks for everything. I look forward to reading your work in future.<\/em><\/p>\n

xxxxx xxxxxxxx
\n<\/em><\/p>\n

Almost three years ago, we published an article on a similar topic entitled \u00abThe Unbearable Lightness of the Fund Manager<\/a><\/strong>\u00abI think it will be a good complement to the lovely letter we have published above.\u2019.<\/p>\n

\u201cI\u2019m underwater and the beating of my heart creates circles on the surface.\u201d <\/em><\/strong><\/p>\n

Milan Kundera (Brno, 1929 \u2013 )<\/a><\/p>","protected":false},"excerpt":{"rendered":"

Hace tan solo unos d\u00edas, recibimos un correo a trav\u00e9s de nuestra web, en el que un empleado de banca privada nos hac\u00eda unas cuantas reflexiones gratas y sinceras. En \u00e9l nos explica sus experiencias e inquietudes, que le han llevado a compartir nuestra visi\u00f3n del mundo del asesoramiento financiero que perpetra la banca. Como […]<\/p>\n","protected":false},"author":6,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[51,46,40,37,20,48],"tags":[],"class_list":["post-1150","post","type-post","status-publish","format-standard","hentry","category-banca","category-boquerones-fritoscolaboraciones","category-gestion-financiera","category-reflexion","category-sin-categorizar","category-asesoramiento-patrimonial-multi-family-office-crear-mi-propio-family-offices"],"_links":{"self":[{"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/posts\/1150","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/comments?post=1150"}],"version-history":[{"count":0,"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/posts\/1150\/revisions"}],"wp:attachment":[{"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/media?parent=1150"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/categories?post=1150"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/clusterfamilyoffice.com\/en\/wp-json\/wp\/v2\/tags?post=1150"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}