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Confidentiality contract with FP??
Old 01-08-2007, 11:48 AM   #1
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Confidentiality contract with FP??

A co-worker recently inherited about 100K. With no invesitng experience except contributing to her deferred account, she got a FP from a family member. He is managing the inheritence and told her how to move her deferred funds, but

*** she has signed a contract prohibiting her to discuss with others how he has invested her funds. She says it is so she can't share his investment wisdom suggestions with others who would use his expertise without his input
notions without getting paid.

Not surprisingly, she doesn't know how much his fees are, but says she is very happy with her returns last year. Heck, last year was probably good to everyone. I also wonder if she is looking at only $$ returns and not % returns, but I'm not going there.

I just shrugged and let it go, but a confidentity contract?! Is this common?
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Re: Confidentiality contract with FP??
Old 01-08-2007, 12:06 PM   #2
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Re: Confidentiality contract with FP??

In a word, NO

This is very uncommon. Usually the on people who care about that are hedge funds and they don't even tell the clients what they're investing in until after the fact (or never).

Can't say I've ever seen that.

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Re: Confidentiality contract with FP??
Old 01-08-2007, 12:13 PM   #3
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Re: Confidentiality contract with FP??

Quote:
confidentity contract?! Is this common?
Pretty slick idea.

I have never heard of such BS, but if the FP can get the suckers clients to sign it, as well as believing that it is some kind of a legally enforceable device, he will have been successful in "owning" his suckers clients.
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Re: Confidentiality contract with FP??
Old 01-08-2007, 12:43 PM   #4
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Re: Confidentiality contract with FP??

Usually the investment manager just declines to disclose his holdings or other activity.

This sounds like a lame publicity stunt or the precursor to mismanagement & fraud. I wonder if she also agreed to arbitration?
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Re: Confidentiality contract with FP??
Old 01-08-2007, 01:29 PM   #5
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Re: Confidentiality contract with FP??

I find this troublesome.

What if she wanted a second opinion? How about telling her spouse? A lawyer? A tax planner? I would stay away from such a planner. Heck, I would want the planner to sign a confidentiality agreement saying that he won't blab about my assets to someone else.
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Re: Confidentiality contract with FP??
Old 01-08-2007, 01:57 PM   #6
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Re: Confidentiality contract with FP??

Quote:
Originally Posted by Sandy
A co-worker recently inherited about 100K. With no invesitng experience except contributing to her deferred account, she got a FP from a family member. He is managing the inheritence and told her how to move her deferred funds, but

*** she has signed a contract prohibiting her to discuss with others how he has invested her funds. She says it is so she can't share his investment wisdom suggestions with others who would use his expertise without his input
notions without getting paid.

Not surprisingly, she doesn't know how much his fees are, but says she is very happy with her returns last year. Heck, last year was probably good to everyone. I also wonder if she is looking at only $$ returns and not % returns, but I'm not going there.

I just shrugged and let it go, but a confidentity contract?! Is this common?
I doubt this is a bindable contract under any NASD or SEC regulations. I've had some people over the world take my suggestions and implement them on their own or with another advisor, it comes with the territory............

Man, I would love to get a look at that document..............
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Re: Confidentiality contract with FP??
Old 01-08-2007, 03:16 PM   #7
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Re: Confidentiality contract with FP??

Thanks all.

I also thought it was highly unusual and it sent up lots of red flags in my mind. But as Ann Landers used to say, MYOB. I just hope she doesn't get slammed.

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