Damocles Consulting

Advisors who should know better have sold naked put selling as a "low-risk" income-producing strategy to their clients. In the attached article, you'll read about a fund that imploded as a result of naked option selling. According to the article, not only were the clients wiped out, they continue to owe additional money to the firm! If your advisor recommended selling naked options, contact us today for a free consultation.

Our first article in Seeking Alpha, highlighting the risks in NVCC preferreds. Feedback would be appreciated! https://seekingalpha.com//4204482-preferreds-like-needs-en

Advisors at Morgan Stanley get paid more the more their clients borrow. Think about that: their employer gives them an additional financial incentive to suggest to their clients that they borrow more! And that’s not to suggest that Morgan Stanley is doing anything different than the industry as a whole. When compensation is tied to trading, borrowing etc, one shouldn’t be surprised to see these metrics increase. The unasked question, of course, is whether this is in the best interests of their clients. There is a reason that compensation is NOT tied to client satisfaction, perception of trustworthiness, retention, or even returns vs a benchmark. How different would the financial services industry be if it were? https://www.financial-planning.com//morgan-stanleys-2019-f

Some of our Damocles clients had positions that exceeded 10% (in one case close to 20%) of their entire account in Enbridge preferred shares. Why? Perhaps because Enbridge was a serial issuer of preferred shares, which are quite lucrative for advisors and their firms, who earn approximately 3% on the new issue purchases. Do you have several series of Enbridge preferred shares that your advisor bought you? Did your advisor sell one Enbridge preferred share at a loss to buy you another Enbridge preferred new issue? If so, contact us today. http://business.financialpost.com//pipeline-selloff-deepen

Many Canadian investors have significant exposure to Non-Viability Contingent Capital (NVCC) products, both preferred share and debt issuances, that have been bought for them by their advisors. These products have specific, inherent risks that your advisor is obliged to have explained to you. as the article below makes clear, a banking crisis in Canada is far from an impossibility. Many investors have no idea how such a crisis would affect their NVCC investments. If you think your advisor sold these securities to you without proper explanation, contact us today. http://business.financialpost.com//china-banking-crisis-wa