I would like to refer readers to the recent OBSI name and shame press release. It concerns Richardson GMP, a firm that has been accorded a Fiduciary Certification on its discretionary mandates.
The OBSI reports are sparse and it is difficult to discern just what the securities at issue are, but I would hazard a guess that they are in the asset backed/collateralised loan/mortgage backed area given that the problems arose during 2007 and 2008 and looked to relate to once highly rated paper.
I can see why many firms would not want to reimburse investors for normal market losses, and in most instances, where a portfolio is properly structured, I would agree with them. But it looks as if structure and transparency over structure were found lacking and I do wonder why Richardson took the risk to their good faith message in this particular instance. I fear perhaps the lawyer’s hand and not pragmatic business logic. But then again there is too little information here to really go on.
However, what concerns me in the “power of ten realm” is that we are at heady market valuations and who knows how many shaky foundations are set to be levelled in the months and years ahead.