Private bankers may witness more lawsuits
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GENEVA (Reuters) - The private banking and wealth management sector may witness more lawsuits from clients angry about the poor performance of their assets, a leading European lawyer in the sector told the Reuters Wealth Management Summit.
"I think we will see an increasing amount of litigation for poor performance," said Baker & McKenzie partner Stephanie Jarrett.
The financial sector is still recovering from credit market turmoil during August and September which saw the value of many funds decline.
Amid such market uncertainty, Jarrett said private bankers might have to get training on how to deal with unsatisfied clients.
"One of the biggest challenges is training people up to a suitable level, not just to do with investments but to do with clients. They have to be able to do a lot more, recognize issues and bring in outside advice."
She said wealth management trustees might also have to tackle such legal quandaries in the near future, although she added that the threat of litigation for poor performance had not yet been a factor in the Swiss private banking market.
"It's something we haven't seen a lot of in Switzerland because a lot of the money has been undeclared in the past."
In July, Swiss bank UBS (UBSN.VX) agreed to pay $23.3 million to resolve accusations that it had the steered thousands of inappropriate customers into fee-based accounts.
