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Written by Wilfred Ling
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Wednesday, 17 September 2008 |
Sometime I was asked to give a second opinion of a recommendation made by another adviser. A few weeks ago, someone called me because he has some hesitation in purchasing some hedge funds from his private banker. Apparently he was about to meet the adviser in 10 minutes and I guess he wanted to hear what I have to say over the telephone.
This is not the first time that people want a second opinion. I can do this work through a fee-based arrangement. If the investment or fund is available in the public place or if it is a restricted fund for which I have access to, I’ll be able to do some due diligent and give a second opinion. If the investment is exclusively distributed, the client just need to give me the prospectus and all marketing materials given to him. With such a scope of work I’ll charge a fee. For such a second opinion arrangement, I’ll not necessary recommend any products. This will be dependent on the scope of work. In this context, the scope of work can be simple to advance: Simple scope of work: Given the relevant materials, give a 2nd opinion of the product and highlight any important risks that the client need to be aware of. Moderate scope of work: Given two or more similar products, give an objective opinion of which product is the most superior one. Advance scope of work: Given the products offered, are the products suitable in relation to the clients’ risk appetite, family situation, liquidity, wealth and job stability?
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