Are Forsyth Barr crooks ?

[Halebop]

I agree Rocking. I personally prefer my own counsel over a brokers. However, since brokers like Forsyth Barr (and most others) sell themselves as "Full Service" firms, distancing themselves from the price advantage of dealing with Discount/Online brokers, what benefits do they provide for their "full" service?

The key here I'd have thought was to help me navigate through the investment minefield and hopefully avoid investing in Feltex's. Quite clearly the fat underwriting fees compromise their ability to articulate impartial advice. To me it was clear Feltex were being sold at the end of the cycle for a high price. In Forbarr's PR piece on their "shock and surprise" they didn't express any opinion about the fundamentals. They are trying to be far too clever and should suffer for it. Unfortunately, the types of people who took their high priced FTX shares in the first place will probably queue gratefully at Forbarr's doors for the safety of Vector shares.

[Lizard]

One difficulty I see with ALL advisors is that it is very difficult for any advisor to give advice AGAINST a company. Even small companies will threaten legal action over the vaguest "incorrect" statement when an advisor chooses to pour scorn over their offerings. The time and expense in dealing with these threats is such that virtually ALL advisors soon give up on criticism in favour of only reporting the positive. Erring on the side of being positive or neutral is much less likely to provoke legal action from the clients for whom they work.

The biggest step forward we could make would be to provide market commentators and advisors with a greater degree of protection against legal claim by companies so they are willing to point out the bad as well as the good.

[Bling_Bling]

If these advisors are as good as they say, they will be like some of us on ST, retired with enough cash to play the market and not need to work. Think about it. Anyway, nothing is 100%. Stop moaning. This place is worst then Coronation St.

[TerryA]

>>This place is worst then Coronation St<<

Impossible

[Cooper]

While I agree that a brokerage firm should attempt to make sure at all times that the information on companies they are analysing should be as accurate and correct as possible, I think that this is where their responsibility ends.

If brokerage firms were able to be totally accurate then the valuations of one company would not vary depending on the brokerage firm you ask, but the valuations are very different... it's not an exact science. That should be the first acknowledgement of any investor... you can't simply wait for the broker to tell you what to buy, how much, and when.

If people want someone else to have total control over their equity investments, they buy into managed funds. Again, the onus is on the individual investor to look at the analysis done by a brokerage firm and consider this as part of their reasoning behind an investment decision. As the investor themselves are the entity making the ultimate decision whether to act or not on the available advice, I believe they must also accept the ultimate responsibility of these decisions.

If not, at what point is the line drawn? Are brokerage firms also to be blamed for not having coverage on companies that subsequently have a dramatic appreciation in share price? If they are to be blamed for mistaken coverage, are they also to be blamed for making the mistake of not covering a company? (No NOG holders need answer that question...)

I would expect that the damage done to a company's reputation from recommending a company like FTX would far outweigh the underwriting fees received, especially with the current state of affairs where full-brokerage firms are losing market share to low cost "no-frills" services. In fact a failure to properly look after it's current customers would impact on the likelihood of Forbarr receiving an invitation to underwrite a placement in the future... what company would want a brokerage firm with no customers to underwrite their IPO? It makes sense to me that Forbarr were as surprised as the rest of the market with FTX's sudden reduction in profit. It's also my understanding that once the IPO is done and dusted, the service Forbarr provided for FTX is over and the brokerage firm is therefore free from the conflict of interest of covering a company from which it is getting revenue.

Personally speaking, as a custy of Forbarr I prefer the full brokerage service because I can have access to their research (flawed as it may be in the FTX instance), I can have access to IPO's, I can use the expertise and knowledge of my broker when I require it (and he and I both realise that there is a limit to the responsibilty he has over my decisions) and I can pass on certain undertakings which are performed more efficiently by a brokerage firm (sell that, and that, and that, and buy so much of that, making up any shortfall from my cash account, thanks a lot). My broker is a great help because he feels free to question my decisions and provide advice which he thinks is applicable to me, but as I'm the person who best knows the various factors important in making investment decisions I am also the one to best make the final decision and accept final responsibility.

In the end it all depends on exactly what kind of service you think you're getting from a full service broker. If I was paying for another party to take full responsibility for my equity decisions things would be great... I could make a whole list of mistakes as long as I was acting on someone else's advice, and it wouldn't be my mistake at all. Life would be just dandy. But who would be a broker?

[Longtack]

Capitalist Posted - 16/04/2005 : 6:37:07 PM
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It's because of intellectually dishonest people like you David Renwick, that I am not interested in sharing my views here.

Oh well that's your choice Cap but a couple of things:
I don't always have to justify myself to you, and intellect can be a movable feast. I've been happy to openly criticise your haughty ideas on your blog (using my name)

Addendum: I am sick and tired of people pretending to be benevolent to me and insulting me behind my back.
Rather they think it is behind my back. You don't fool me - I have known you have been Longtack for some time. I plays it how I sees it, whatever hat I'm wearing. Stolwyk did the same thing, but at least he didn't bother with an alias. I don't deserve it. You're a complex woman Cap' but latterly you've become more amusing, particularly since you stated that you're "influential." Does this mean you're going to transform me into a newt? Goodbye. Heard it before and I don't believe that anything I'd say would silence you - fortunately.

ROCK where did you copy this from,, this is NOT you TALKING,, come on own UP..

[Cooper]

So, from where I sit we have identified three retail markets...

1) The "Rocking/Halebop" market where the only brokerage service is the actual brokering of equity sales and purchases, nothing else. The customer accepts all other responsibility.

2) The "Cooper" market where the customer wants the standard brokerage service, plus additional services dealing with cash management, research, and the ocassional pointing out of stupid errors on the customer's part, including "fatfingering" an extra zero into that last buy order. The customer accepts responsibility for the final decision, but assimilates brokerage research into these decisions.

3) The "Whatmeworry?" market where the customer wants the brokerage firm to purchase and sell equities, research the companies and provide guidance and make recommendations based on the personal situation of the individual, and by doing so the broker assumes responsibility for these decisions.


I see your point, and I also understand that because my own needs are different from Ma and Pa I can't transfer my own expectations of a broker's service onto them. But given the inability of the brokerage firm to guarantee that their recommendations are anything but guesstimates, I would argue that there is in fact no third market. There is no-one who would be willing to provide the service because it would not be a feasible service to provide.

[quote]quote:Originally posted by rocking

Originally posted by THE KING

ROCK where did you copy this from,, this is NOT you TALKING,, come on own UP..

Sure. UP.

OWN UP OR SHUT UP..

[Cooper]

quote:Originally posted by rocking

quote:Originally posted by THE KING

ROCK where did you copy this from,, this is NOT you TALKING,, come on own UP..

Sure. UP.

If you're looking to own UP, I should warn you that Forbarr have no coverage on UP and that purchasing UP for your own personal ownership will be your responsibility alone.