News Release : October 21, 2010
Elite Summit 2010
Fairmont Le Montreux Palace, Montreux, Switzerland, 15 – 17 November 2010
Montreux, Switzerland, November 3, 2010 – FOR IMMEDIATE RELEASE
The traditional business model of private wealth management is rapidly becoming obsolete, according to Marc Moret, Founder of Lobnek Wealth Management. Wealth managers need to adapt to a new paradigm based on independence, full transparency, and cost efficiency. There has to be a complete alignment between the interests of the client and those of the wealth manager. A keynote speaker at the upcoming marcus evans Elite Summit 2010 in Switzerland, 15 – 17 November, Moret shares his thoughts on how the sector should restructure itself and which strategies are likely to perform well in the coming years.
What is challenging the wealth management sector right now?
Marc Moret: Coming out of the 2008 crisis, wealth managers are faced with a very difficult investment environment where producing and maintaining positive performance is challenging. In addition, a number of common practices such as kickbacks and cascading fees that have had a negative impact on performance are increasingly being questioned by clients. It is urgent for wealth managers to address these issues and be creative.
Do you have any suggestions on how they can be creative?
Marc Moret: There needs to be a complete alignment between client and wealth managers’ interests. In the new environment, the choice of products will play a key role – wealth managers should be actively seeking a number of broadly diversified best in class investments. A portion of the portfolio should also be dedicated towards investment products that are uncorrelated to the rest of the market. Successful managers will increasingly shift focus from chasing performance to better risk control.
Last but not least, a core/satellite approach to investing seems particularly well suited to generating alpha all the while tracking the broader markets.
Which strategies do you think will perform particularly well in the next few years?
Marc Moret: In the present uncertain environment, I would advise investors to position themselves cautiously by implementing strategies that hedge against various scenarios.
I recommend to put emphasis on ensuring a high degree of de-correlation between asset classes in order to avoid a repeat of the 2008 experience when practically all asset classes suffered substantial losses simultaneously.
The emerging markets are set to outperform the developed markets over the next few years. However, one has to bear in mind that the growth of the emerging markets by themselves will not suffice to lift up the global economy.