The Daily Brief
Tim Duncan Copyright Christian Petersen, Getty Images

Tim Duncan Settles Lawsuits Against Financial Advisor

Tim Duncan settles his lawsuit against his former financial advisor, new report questions the process of manager selection and Matt Grossman picked to replace Racquel Oden at Merrill Lynch.

Former basketball star, Tim Duncan, has settled his lawsuits against his former financial advisor, Charles Banks. The settlement is for $7.5 million, even though Duncan claimed Banks defrauded him out of more than $20 million. In 2013, Duncan’s lawyers discovered millions of dollars missing during divorce proceedings. They tracked the missing money to Banks, who had been siphoning off Duncan’s money into various business ventures, some of which Banks had financial stakes in, according to the San Antonio Current. Banks pleaded guilty to two counts of wire fraud in April 2017 and is now seven months into a four-year prison sentence.

The Hamster Wheel of Manager Selection

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Manager selection is the most commonly marketed service by financial advisors, yet, is the process worth it? A recent report by Research Affiliates seeks to answer that question. Because investors tend to chase returns, “many advisors put their clients on the ‘hamster wheel’ of manager selection, continuously replacing poor performers with good performers. The literature tells us, however, that this form of performance-chasing likely puts advisors and their clients on the outside track to future excess returns,” the report says. The report concludes that there are benefits to be gained from manager due diligence, just not the positive alpha that advisors may expect. It can reduce negative alpha or minimize regret risk.

Merrill Lynch Names New Fifth Avenue Market Executive

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Merrill Lynch named Matt Grossman the new executive of the wirehouse’s Fifth Avenue market, according to a memo reviewed by WealthManagement.com. Grossman, who started his career as a Merrill Lynch advisor 28 years ago, most recently served as the executive overseeing the brokerage’s Westchester-Greenwich market. In his previous executive role, he expanded the market just north of his new one to include seven offices and 190 advisors. The Fifth Avenue market is served by about 200 advisors. Grossman is filling the market executive role left open by Racquel Oden (named one of WealthManagement.com’s Ten to Watch in 2015), who recently left the firm to join J.P. Morgan, a person familiar with the leadership change confirmed. 

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