This post is a follow-up to my September post – how private bankers injure your wealth.
I recounted how I was rather horrified/shame-faced to analyse the fees I’ve been paying one of my private banks for far too long. When you considered the double layer of fees due to my ‘fund of funds’, I was paying around 2.05% for a discretionary portfolio. And the performance didn’t in any way justify this level of fees.
I had some very useful comments about my predicament. The gist was that I should try to negotiate. Perhaps I could even offer to introduce some
total suckers very daft friends to the service. The commenters included people, like me, who do value the service from a private bank and who empathised with my intention to keep the relationship live – albeit at a lower cost base than before.
So, what happened next?
I confronted my bank with my analysis. I suspect they were thinking ‘what took him so long?’ because they were ready for me. And, no, they haven’t fired me yet – unlike the other private bank in my portfolio.
It turns out they are all too happy to stop managing discretionary portfolios manually, and they have an alternative approach. Read the rest of this entry »
Trump won. Already, less than a month in, it has a somewhat inevitable feel to it. After Brexit I don’t think I can be shocked by politics any more, but from a market-watchers’ perspective the reverberations haven’t all been what I expected.
I had thought the USD would fall a bit. It hasn’t. Well, OK, it fell about 2.8% versus Sterling but it’s up against the Euro and the Aussie.
I had thought US equity markets would fall (from protectionism, policy freefall, etc) but in the shower the next morning the biggest driver seemed to be Trump’s seeming determination to reduce US corporation taxes to 15%; the subsequent market rally suggests I’m not the only person focusing on the impact this could have on equity valuations.
I hadn’t really thought about bonds. But of course (hah! Ed.) with Trump suggesting a massive increase in the US fiscal deficit and national debt, along with a potential infrastructure boom, interest rates are on the way up. The US bond indices fell almost 3% in the month, the third month in a row that bonds have fallen in the UK and the US. UK bonds, which account for 20% of my target weighting, are down almost 9% since August; this alone has hit my portfolio by about 2% over the last three months. But let we become too fussed by end-of-the-bond-bubble chatter, bonds are still up during the year.
Our relationship began almost twenty years ago, when I was in my impressionable twenties. I was young, free and, erm, approximately single. It began almost by accident. I was working for an American firm, I had shares in the company, there was a public markets event which I took part in and the next thing I knew I’d begun a long distance relationship.
It wasn’t ever a particularly passionate, intimate relationship. In fact I got much more involved with another member of the same family, in London, in a brief fling that left me hurt, scarred and financially damaged. But somehow the long distance relationship continued. Occasional phone calls usually with me asking for something. A few letters – an annual ritual, for the most part.
I considered splitting up earlier this year. I was trying to buy a house and I needed some help, some support. I picked up the phone, and I made my feelings clear. I had worked out what I wanted and I asked for it. I was told No, not if I wanted to stay in London. When I realised I couldn’t rely on the relationship, and in fact got more support from other relationships in the UK, I almost broke it off. But somehow I just reduced my involvement even further and kept going through the motions.
The phone calls had now become only occasional events, and were always about money. I can’t remember the last letter I received.
So imagine my surprise when I got a letter, last week. With the familiar postmark. When I opened it, I couldn’t quite believe my eyes – what I was reading. No personal greeting, even. Just cold, impersonal prose. Not even an ‘it’s not you, it’s me’. Just complete clarity that our past relationship (!) is over, and a request for me to remove my stuff by the end of the month. If possible.
I’ve never been dumped before, let alone this way. Thank God there wasn’t a request for money.
The letter’s below – judge for yourself.