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KNOWYOURSELEKNOWYOURMONEYPrivate banks may be c lamour ing to manage

your money, but two well-known stock market

investors are urging high net-worth indiv iduals

not to hand comolete control of their f inances

to a wealth manaqer. Mark Laudi reports.

on Schel lenberg and Ray Barros say nomatter how you acqurred your wealth, youneed to know how to manage it yourself -

even if vou then let someone else take care ofthe transactions on a dayto-day basis. While this doesn'tmean you need a degree in account ing, you should knowenough to understand what your wealth manager is doingor proposing to do with your funds so you can ask probing,relevant questions. Sometimes, you need to have a wealthof knowledge and information to be able to ask the simplestbut most important quest ions. Being r ich is no excuse forbeing ignorant.

Hong Kong-based hedge fund manager Ray Barros,who has been in the business of trading and investing fordecades, says if you have that much money you ought toknow something about how it should be managed lf youdont, i t 's t ime to learn. Thai land-based Don Schel lenbergagrees. As Senior Market Strategist at NextVlEW, he saysself-dependence is cr i t ical to success in the long run. Hecompares wealth managers to physicians of yesteryear."Decades ago, doctors were like god: when they spoke,we listened, They tended to be a lot smarter than everyone

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else, So, when the doctor said you needed surgery, therewas no argument. These days, people are more educated.lf the doctor says you have to have a heart transplant, we'remore likely to want a second opinion. You should do thesame with your finances. Just because you have a wealthmanager at an investment bank, you shouldn' t hand overcontrol of your f inances and then forget about i t unt i l thenext portfolio review."

SPREAD YOUR RISKFor this reason, Schellenberg advocates dealing with morethan one private bank to get a range of views f rom the wealthmanagers at each. Spreading your risk has less to do with thef unds you are buying into and more to do with the person youare buying them f rom, Even though some of the pr ivate banksoffer mutualfunds managed by rivalf inancial institutions thereis not likely a great deal of difference between each fundSo wealth managers are likely to offer the funds paying thehighest commissions. "They're sales people f i rst , and this isa business," he says. "The fact is: this is your money and noone is going to care about i t as much as you do."

The 2007 Asia Trader & Investor Convention in Kuala Lumpur.

BE WARY OF FEES AND AVERAGE RETURNSRarros nn in ls n r r t t l .a t teps ch : rnpd hv mrr t , ,a l f r tndS so ld

by pr ivate banks are often unreasonably high QuotingWarren Buffett , he says high net-worth individuals are notwel l served by wealth managers because they col lect theirfee or commission frorr a product that has already hadfees deducted. This wouldn' t be too much of an issue i f the{ r r n r l c r l i r i r v c r i i o l r l o d : n n c i l i r i o r o l r r r n h r r i a r i o r, __ . - ,_ , t ac |ve tymanaged funds don t always outperform the benchmarkagainst which their performance is measured ln Asia theMorgan Stan ey Caprtal Internat ional (N/SCl) Asia Pacif icex-Japan Index is the most act ively fol lowed benchmark,which br ings us to the next point returns The tradingexperts say wealthy rndividuals should not bl indly acceptaverage return f igures during a port fol io review l t is notgood enough. says Barros to be told your money hasv ,e lded an averaoe re t r r rn n f qav 10 ner cent ner annUrn

over f ive years Be sure you check the returns regular iyat least once a year l f they do not meet your f inancial

onals vor , shorr ld he askinr^r some ser,ol rs r^rrrest ions." v " " "

YOU CAN'T ALWAYS BE RIGHTThe exper t ag ,ee tha t you cantbe r igh t a l l o f lhe t imeYou wi l l make wrong investment decisions Rather thandwel l on missed opportunit ies, or opportunit ies that wouidher ip hepn hc t ' c r l c f innnrpd r in r , npod in leeve emot ione l lho r lnnr Ro nron : ra rJ tn : rJmi t \ /n r | \A /o rp \A / rnn f l a r l tq r i l r u u v v . y v u v v u r w v v r v r r v . w v r

your losses and move on Barros cal ls this a probabi l i tymindset ' "On average, the amount of money you makemust be more than the amount of money you lose," hesays That rray sound obvious. but some inveslors go intodenial and cl ing on to bad investments for a long t ime inthe hope that they wi l l recover For this reason, surgeonsand n i ln rs .nake the r , r in rs t t radprs qavs Bar ros . ' l n

lhe i f

lobs they cannot afford to be wrong Being wrong is amatter of l i fe and death But trading is a di f ferent storyYou have to be able to admit that you were wrong andl : k o e n i i n n : n n n r n l i n n l r i T h : . m ^ - n . ^ , , . + i n ^ + r n - l i n a r n c o n cr q r \ u u u L r u r I u u u v . u , , r q r y . | | ' J l l U d l l J U U t t l l l V t l d U l l l V I U J J U J

before they widen ' A