Bank's financial advisors

Business Money
1

ok some of the banks they help you manage your money, min requirement is 1 mil some 3 mil. How are they do you trust them? My brother in law moved to Taiwan and has some money. We went to Standard Chartered today, seems kinda ok to me. But it’s so much money can I trust them ? Anyone of you guys have experience with those? I guess it depends on how you tell them to manage your money? High risk, low risk etc Also for foreign banks that’s in Taiwan, like Standard Chartered, Citibank, Abn Amro, HSBC if you put money in those bank and China attacks, can you get the money out outside of Taiwan or while Taiwan is unstable? Standard Chartered said you can use ATM, but how long will it take by using ATM? And who knows if the money is there?

oh and what kinda fee do they charge? forget to ask that today and they didn’t say anything about that. Other then Standard Chartered, Citibank, Abn Amro, HSBC what are some other bigger and trustworthy banks in Taiwan? thanks

2

ni xiang tai duo le la

just go with a bank that has CDIC (Central Depository Insurance Commission something or rather). means the TW government insures the deposits made with the bank so even if the bank goes busts, the customers can reclaim their deposits. all major banks, whether foreign or local are required to comply.

3

Are you looking into full service brokerage to manage money in the 1 mil to 3 mil range. Citibank has Smith Barney, Chase has Morgan Stanley… I’m sure there are others. But these investment accounts are not insured (besides the cash account) and the fee varies base on what type of account you open and the deposit amount. Last I checked fees range from 4% to 1% annually. It also depends on the relationship you have with your broker too. Because sometime they waive your fees, if you’re into investing in products they make a commission on. Of course with a full service broker account, you should be expecting that their advice produce numbers that produce way above their 1-4% fees, but there are no guarantees.

If you’re worried about your account being liquid in case of an attack by China, then go with Western based banks, and get a multi-currency account. Worst case, Taiwan is bathe in a nuclear fire, and you’ll be at their branch office in New York or London, munching on a free bagel recounting your acts of heroism to your broker, who will be nothing more than understanding.

4

[quote=“frokky”]ni xiang tai duo le la

just go with a bank that has CDIC (Central Depository Insurance Commission something or rather). means the TW government insures the deposits made with the bank so even if the bank goes busts, the customers can reclaim their deposits. all major banks, whether foreign or local are required to comply.[/quote]

is there a list that lists all the CDIC banks?

hm nevermind…all banks are covered cdic.gov.tw/ct.asp?xItem=135 … e=697&mp=2

5

[quote=“ac_dropout”]Are you looking into full service brokerage to manage money in the 1 mil to 3 mil range. Citibank has Smith Barney, Chase has Morgan Stanley… I’m sure there are others. But these investment accounts are not insured (besides the cash account) and the fee varies base on what type of account you open and the deposit amount. Last I checked fees range from 4% to 1% annually. It also depends on the relationship you have with your broker too. Because sometime they waive your fees, if you’re into investing in products they make a commission on. Of course with a full service broker account, you should be expecting that their advice produce numbers that produce way above their 1-4% fees, but there are no guarantees.

If you’re worried about your account being liquid in case of an attack by China, then go with Western based banks, and get a multi-currency account. Worst case, Taiwan is bathe in a nuclear fire, and you’ll be at their branch office in New York or London, munching on a free bagel recounting your acts of heroism to your broker, who will be nothing more than understanding.[/quote]

hmm so it’s not insured eh? so need to put the money in bigger banks and western banks.

for mutual funds what’s the difference when you buy it in banks, insurance companies, and from full service brokerage?

6

[quote=“frokky”]ni xiang tai duo le la

just go with a bank that has CDIC (Central Depository Insurance Commission something or rather). means the TW government insures the deposits made with the bank so even if the bank goes busts, the customers can reclaim their deposits. all major banks, whether foreign or local are required to comply.[/quote]

I think the bank going bust is the least of his concerns. There is far more chance of capital loss due to market decline. Of course even if the market goes down, you can be sure the bank will still be claiming generous entitlements to the cash you’ve ‘invested’ with them.

7

Insured accounts have nothing to do with factors like western, or bigger, or whatever…They are a function of cash accounts. For instance checking, savings, money markets, because the central government are willing to back them with the central bank.

Investment accounts that deal with mutual funds, stocks, futures, bonds, and commondities are not automatically insured by the central government.

Not all banks and insurance companies sell all the mutual funds on the market. They are usually limited to the ones that their institutions represents. A full brokerage will carry all or 99% of the mutual funds on the market. In addition full brokerage will offer full service and advice. If your personal broker is not a mutual fund wizard than they will find someone on their team to consult you.

At some point in life one realizes that one is good at making money in one aspect of life and you need to hire experts to make money in other areas of life.

Also don’t be afraid to switch full service brokers if it is not working out. I usually give them 1 years on a trail basis to see if they can produce. If they can’t just move on.

In addition don’t confuse Insurance companies and retail banks as full service brokerage houses. Insurance companies sell insurance. Unless you have so much money that your contemplating insurance as a tax shelter, you really shouldn’t even mention insurance as a place to invest your money.

Retail banks are used to clear checks and move money around. If you use it to save more than what you use in a year, assuming you have no large purchases on the horizon, it is not really a great use of a bank. If you use your retail bank as a broker, you will be spending a lot of your own time doing research and managing your money. If you earned the 1 - 3 million, don’t you think your time is more wisely spent trying to make another 1-3 million, instead of spending time learning about a whole new skill set that you are untested in. I mean it is good to have some knowledge so you know if the broker you have is competent, but pass a certain point and you’re talking about career change.

8

Insured accounts have nothing to do with factors like western, or bigger, or whatever…They are a function of cash accounts. For instance checking, savings, money markets, because the central government are willing to back them with the central bank.

Investment accounts that deal with mutual funds, stocks, futures, bonds, and commondities are not automatically insured by the central government.

Not all banks and insurance companies sell all the mutual funds on the market. They are usually limited to the ones that their institutions represents. A full brokerage will carry all or 99% of the mutual funds on the market. In addition full brokerage will offer full service and advice. If your personal broker is not a mutual fund wizard than they will find someone on their team to consult you.

At some point in life one realizes that one is good at making money in one aspect of life and you need to hire experts to make money in other areas of life.

Also don’t be afraid to switch full service brokers if it is not working out. I usually give them 1 years on a trail basis to see if they can produce. If they can’t just move on.

In addition don’t confuse Insurance companies and retail banks as full service brokerage houses. Insurance companies sell insurance. Unless you have so much money that your contemplating insurance as a tax shelter, you really shouldn’t even mention insurance as a place to invest your money.

Retail banks are used to clear checks and move money around. If you use it to save more than what you use in a year, assuming you have no large purchases on the horizon, it is not really a great use of a bank. If you use your retail bank as a broker, you will be spending a lot of your own time doing research and managing your money. If you earned the 1 - 3 million, don’t you think your time is more wisely spent trying to make another 1-3 million, instead of spending time learning about a whole new skill set that you are untested in. I mean it is good to have some knowledge so you know if the broker you have is competent, but pass a certain point and you’re talking about career change.[/quote]

yeah good points, thanks, about "Investment accounts that deal with mutual funds, stocks, futures, bonds, and commondities are not automatically insured by the central government. " so which investment accounts are automatically insured by the central goverment? well if it’s a foreign institution that you invest your money in, then it depends on that country bank’s policy I guess?

9

Usually investment accounts have a money market account attached to them to sweap any cash balances accrued from dividends or sales. The money market accounts are insured.

I guess government bonds are “insured” by the government, since they will only default if the government collapses.

You can make money in a low interest saving account that is insured. Probably match inflation at that point.

I think you really need to shop around at these institutions, find a broker you are confortable with and map your financial goals.

10

I’m inclined to disagree.

If you are young, I suggest that you learn how to invest. It takes a fair chunk of time but I think the results are worth it.

Also, you have your best interests at heart, whereas the bank really has the fees you pay at heart. Most funds underperform the general market too, so if you wanted to invest on the stockmarket, then use a system of dollar cost averaging.

11

Tycoon has a point as well ironfist. Your relationship with your broker is sometime adversarial. I had discount brokerage accounts when I first started my career. I didn’t move onto full service accounts till 5 years later.

My career has nothing to do with financial services, but having some rudimentary knowledge does help in screening out bad brokers from good ones. Or understanding the system the broker is going to use to manage your account.

Basically the job of a good broker is to ensure you retain your wealth while still beating the “average” benchmarks.

I prefer stocks purchases. I have a broker and she prefers mutual fund purchases. So for the first year I went into their brokerage house index system managed by someone on her team. It broke even, but I was also doing my own risky trading in the account as well. The next year she wanted me to try her personal picks of mutual funds; she even waived the fees to give her another chance. The account did very well.

She said something that left an impression in one of our meetings “You should focus on making lots of money. Let me worry about these accounts.” Which is true. My skills set in earning money has nothing to do with trading.

Prior to that I had brokers that quit, moved to other firms, or just ignore you, etc…

A full service brokerage house may lessen the learning curve on your end, but there is a layer of relationship management that you need to take into account as well.

12

My views and opinion, based on my experiencies:

  1. Stay away from financial advisors that target expats and want to meet you at a coffee shop, even they work for some company that acts as broker for products of reputable banks, investment companies and the like. The products may be ok but the advise may not be (as I learned the hard way).

  2. Forget banks. As ac_droupout says the choice of products is usually limited but the fees are often high. Same goes for insurance companies.

  3. An advisor at a bank (even it’s a big or private bank) does not necessarily know more than an independent advisor (or yourself, if you have done your homework). They might know their products better (see 2.) but no one can predict the market as such. All they can do is help you to allocate your money but with a bit of effort you can read that up yourself on the internet.

  4. Even many advisors that do not work for a bank, insurance, mutual fund company etc. may not act in your best interest, especially if they get paid a commission for the products they recommend. (refer to 1.)

  5. Educate yourself. Buy some books and/or read up on the internet, join a discussion forum about finances. Take your time.

  6. Do not listen to advise regarding specific stocks, especially not if it’s a penny-stock and someone on the internet, or some self-proclaimed stock market guru.

  7. Do some ‘dry-run’ to practice. There are sites that offer you to create a virtual depot where you can test / fine-tune your strategy and play with different products.

  8. Take care of your investments yourself. Advisors won’t guarantee gains (even it sounds like it) unless you put your money in a fixed deposit or similar. When it comes to stocks or mutual funds etc. it’s your risk and your money, not theirs. And most certainly they won’t compensate you for any losses.

  9. Find an online-broker that gives you access to all kinds of products and markets. I don’t invest via a bank here, I do it via online-brokers in my home country where I know the playground (regulations are strict but fair) and don’t have to put up with the often stupid rules here (many which are not foreigner friendly), and in case of a dispute I won’t have to argue in a language that I don’t speak or worry how to get my money back (what’s left of it, if any).

  10. If you take care of your finances yourself and you make losses no one but yourself is to blame; but don’t give up, learn from it.

I think currently it’s not a good time to invest big lump sums in the stock market anymore as markets have been very bullish in the past few years and the risk or a major correction or crash are higher than ever. Monthly payments may be an option but continue payments if markets fall so that you buy cheaply until the next bull run starts.

13

thanks guys, great suggestions from everyone.

ac_dropout so you picked the investments you want the first year, then let her do the mutual fund the next. I guess I will let them do it all and I will oversee what’s going on. Probbaly once a month I should talk to them to discuss what’s going on with my account. and don’t leave it unattended for months.

14

I’m not sure about AC’s advice on the multi-currency accounts. As I have learned to my chagrin, the foreign banks in Taiwan are not actually ‘branches’ of their foreign parents. They are in fact Taiwanese entities regulated by Taiwanese law and are separate from their foreign parents. In my experience, accounts are emphatically not linked.

I will defer to the greater knowledge of the forum, but that has been my experience. HSBC is especially annoying.

Me: You are supposed to be “The World’s Local Bank.”

Taiwan HSBC employee: Oh that’s just advertising. We’re really just a Taiwanese bank.

Honest, I suppose. But galling nonetheless.

15

Yeah I have heard about this too…so what’s up with that? So is it basically a Taiwan Bank but using the foreign name???

16

Yeah I have heard about this too…so what’s up with that? So is it basically a Taiwan Bank but using the foreign name???[/quote]

They’re different legal entities sharing the same trademark and perhaps under a global group, is all. So you wouldn’t be able to link your US BofA account to your HK BofA account for example.

17

That’s correct.

The capital market is fairly restricted by the TW government. There’s a lot of foreign banks wanting to enter TW but they are holding off until certain changes are made to the laws.

It’s also the main reason that Citibank acquired Bank of Overseas Chinese… to be even more Taiwanese and be less dependant on the US.

Yeah I have heard about this too…so what’s up with that? So is it basically a Taiwan Bank but using the foreign name???[/quote]

They’re different legal entities sharing the same trademark and perhaps under a global group, is all. So you wouldn’t be able to link your US BofA account to your HK BofA account for example.[/quote]

18

[quote=“ironfist”]thanks guys, great suggestions from everyone.

ac_dropout so you picked the investments you want the first year, then let her do the mutual fund the next. I guess I will let them do it all and I will oversee what’s going on. Probbaly once a month I should talk to them to discuss what’s going on with my account. and don’t leave it unattended for months.[/quote]
Well if they have an online system you can check your account everyday. Usually you should meet once every 3 months. Or at least call and touch base. But strategies for accounts are laid out at the beginning of the year. So the rest of the year is just to fine tune.

If your broker isn’t even bothering trying to make contact after you’ve open an account. It’s a sign that perhaps it is time to move on. Because you are giving this person your nest egg, if they can’t even muster the courtesy to just call or email every few months, they are probably not that good at their job. Brokers go through career cycles as well, so you want to find a good match. It’s like job interviewing for the privilege of sitting on your nest egg.

As for funds transfers as you move about the globe…Income accounts can regularly make wires to whatever checking account you want at set times. I’m sure your full service brokerage can inform of the options available to you.

19

anymore? can you list others?

ac have you heard about the new “B type” mutual fund? They don’t charge any fee when you first open up the account, but at the time you want to take the mony back, they will then charge you by however many years you invested in . They say it’s good for mid to long term investors. So how is this B type I guess you need to leave the money in for the longer the better eh.

20

It really depends when I use to buy mutual funds on my own I buy C shares, since I never planned on moving them too much, they are retirement vehicles in my opinion. Now my mutual guru says buy A shares, since we plan on readjusting the strategy every year.

Only reason we got into mutual funds this year was because the markets looked very choppy at the beginning of the year.

Next year could be totally different. But best get some expert advise for yourself and your money.

Correction: Morgan Stanely is part of Dean Witter. JP Morgan is part of Chase. Goldman Sachs…

Here’s a list of Investment banks.

Once you open an account with one of investment banks, you’ll be courted by the other banks who want to transfer your account. It’s pretty competitive now, so they even dropped their min. deposit. I believe the min at Goldman Sachs use to be 5 million USD. But know they let 1 million USD individual start accounts there now.

Since you have 1-3 million it might even be advisable to divide the money up among the different banks. Diversity is really the only insurance as they say.

Unless you want to be known as a whale account at a particular institution, and try to get into an IPO account…