Why do you need a lawyer?
I believe there could be many reasons in life why you have to work with a good lawyer. In this book, I have written a chapter called “Traps and Fraud alerts”, which I believe also offers you many great examples.
Even if you are not faced with a crook, maybe you will have questions relating to your business or to family-related topics such as heritage, divorce, etc… Or it can happen that you will face the cruel reality of greediness and power plays, which can seriously damage your interests.
A year ago, I saw an interview with Paulo Coelho, and something really caught my attention. I am not sure it was phrased exactly like this, but the message is the same:
In any business, but especially in your personal life, you have to protect yourself. Expressions such as “that’s life!” should not be considered. You have to protect and know your own rights.
To give you a typical example from the past years, I can tell you that many of my friends lost ten of millions of euros through their wealth managers (NOT just in Monaco, but all around the world).
A loss on a portfolio and/or a fund that a wealth manager handles is only acceptable when he/she is fighting for the result and the correction of the balance. The fact is that you can create results even in an economic crisis. But when your wealth manager is incompetent or less experienced you can be faced with temporary loss.
A real wealth manager handles every loss as a defeat, but not as an end, because he/she is a warrior for his/her client. But what happens when he/she is not?
When I started the MonacoWealthManagement.com website, this question was really interesting to me, especially from a legal perspective. I know that you sign multiple predefined papers when you open a bank account; you even authorise your fund manager with the power of attorney, but I was curious about the legal security for my own.
I was always educated that in life you can find only four types of exchanges:
- Perfect: when you get more value for your investment
- Equal: when you receive the same value
- Bad: when you get less value
- Criminal: when you get nothing at all
In the wealth management industry, many brokers and fund managers are highly bonus-oriented, based on the transaction they make. This compensation is not always based on result, but on the number of charged transactions on the client. And the result become secondary.
If there is one thing I really hate, it is moral hazard. When someone takes your money, your hardly earned funds, and he/she is losing it and blaming outside factors, that is what I call moral hazard. It is like playing or gambling with others’ money without having any responsibility on their shoulder. This attitude is really questionable, and this is why it is called moral hazard.
My German friend lost a serious amount of money in 2009, and the only explanation he received was that the economy was bad. The economic crisis became a great tool for many banks to cover their losses with a highly published excuse. Shortly thereafter, we found out that the wealth manager received a one million Euro bonus for handling my friend’s account. I knew immediately that something was not right, because why would someone receive a one million Euro bonus for losing the complete fund of the client? It is because he got the bonus based on the number of the transactions he booked and not on the result he brought back to the client.
If I gave 50 million Euro to my girlfriend who is losing it, well I will still have some visible results in terms of some sexy clothes and quality time… I know it is a rude example but I always think about the exchanges. This is a bad exchange, not a criminal one.
Because of this experience, I remember I started to create a topic on LinkedIn searching for a possible solution for my friend. The question I raised was simple, something like: do you have the right to take out an extra bonus on clients, if you lose the funds?
The question was like a time-bomb. Hundreds of so called fund managers told me that of course they have the right. Why? Because they worked hard. I saw a magic mirror which only showed their egos.
For me, the person who takes away your money with a promise of return can be considered a wealth manager. But a person who loses 90% of your funds and he/she takes out the rest of it as his/her bonus for the “hard” work is a crook.
After many months my original question was still unanswered, as I expected, so I asked it again: As a client, what do you have as an exchange if a crook, sorry, a so-called individual wealth advisor, loses all your money?
I got no answers, just angry attacks. If LinkedIn would offer voice mail I would have listened to shoutings of anger all day long. They started to say that I do not understand the business, and if I promise results, then I am the crook. It became a childish game and I had no energy to fight gossips, blogs, attacks, etc.
I know that crooks will do anything to overshadow me and to push their fairy-tales, as they label me as the evil of the century, simply because I raised a simple question. I knew that I had already received my answer from the reactions. It was a great confirmation, and a perfect reason to continue my unbiased wealth guide.
I know a guy who is an amazing business lecturer. After 5 years of hardship, his company went bankrupt, and he decided to teach people regarding his lessons from his own business mistakes. He wants everyone to do better. Of course, the critics always say that he cannot teach, because he went bankrupt. I always say he went through a learning cycle and is noble enough to not let us make the same mistakes! Sharing our experiences is part of giving back to our society.
By having a good lawyer, you can avoid these and many other problems or reduce their risks. A good and experienced lawyer has seen many diversified cases, and Monaco Avocats-Défenseurs have fantastic palettes to protect your best interests.
I believe it is always an individual decision whether you are ready to fight for your right and for the things you deserve, but having good legal support can open brand new doors in front of you, even doors you thought were locked forever.
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