Private banking and wealth management may see more lawsuits from clients who are unhappy with the way their assets are performing.
The value of many funds dropped during August and September this year following the credit crisis. Such uncertainty could easily lead to unhappy clients.
“I think we will see an increasing amount of litigation for poor performance. They have to be able to do a lot more, recognise issues and bring in outside advice,” says Stephanie Jarrett, a partner at Baker & McKenzie, speaking at the Reuters Wealth Summit.
She expected litigation to cause problems for wealth management trustees but recognised that these trends were yet to appear on the Swiss private banking market.
UBS paid $23.3 million to settle a dispute over accusations that it had pushed customers into fee-based accounts in July this year, but this is a rare event in Switzerland, according to Jarrett.