Simply bad luck on the stock market?

Are you disappointed with the performance of your investment portfolio? Have you suffered extensive losses and are impugning the integrity of your asset manager? Do you suspect some artifice has led to the detriment of your wealth? Or do you feel that your portfolio manager didn’t invest in accordance to your instructions or misinterpreted your personal needs?

 In theory, the market compensates for greater fluctuations in value with higher income. One stock may achieve a huge return in the long-term, another eventually loses all  its value. In other words, those who seek higher long term return on investment have to endure greater fluctuations in the short term. However, short term fluctuations are not the sole reason for unhappy investors. Some other reasons can lead to a divergence between performance and expectations. Here are  the 5 most common reasons:

·        Misrepresentation

·        Unsuitability

·        Unauthorized trades

·        Misappropriation

·        Excessive trading

Bank clients often claim that they have been informed incorrectly and misleadingly about the risks and potential rewards of stock investments, bonds, structured products and derivatives. In addition, some people assert that the relationship-manager has guaranteed them a high fixed rate of return.

An investment portfolio may simply doesn’t suit the risk profile of the investor. On the one hand, it may happen that a risk profile has been created incorrectly; on the other hand, it can occur that a private investor’s assets are being jeopardized by excessive leverage and rampant speculation triggered by disproportionate profit sharing agreement.

Moreover, reported have been also transactions with a lack of a legally valid order. Usually, investment consultants assert to have spoken to the client on the phone. However, on request, many of them are unable to come up with sufficient evidence, even though brokers’ conversations are normally recorded. In few cases, transactions were simply not in accordance with the management mandate, which has been especially annoying in cases of substantial losses.




Considering legal steps?




Now and then, highly illiquid securities find their way into clients' custody accounts. Consequently, the price indications on the bank customers' portfolio evaluation statement is null and void. That’s exactly how a losing position may not come to the investor’s awareness until it is too late. In addition, some fees are debited without disclosing the exact reason why, and hence have made it more complicated to control if it was in accordance with the management mandate.   


Last but not least, over-trading can substantially harm an investor’s wealth. In many cases, the bank and the brokerage firm are just overly eager to earn commissions. The employee is tempted to promote turnover since his remuneration is directly or indirectly dependent on the commissions he generates.


An independent report written by a Certified Financial Analyst offers an inexpensive way to pursue a really independent risk control and thereby might help you to forestall a negative surprise, or if it’s already too late, it can be used as evidence in case you opt for legal steps. Please be kindly reminded, that this is not only an inexpensive reinsurance for your portfolio but also step which in some cases might result in a substantial redress. 


Basic report:  EUR 199.--