Sharing: experience with RMs

[Majestic12]

Yes - if you are ignorant enough to not know that structured derivatives make a massive amount of profit for banks and instead write them off as low cost investments, then it is better to avoid giving misleading information.

The costs and fees are embedded within the product.

Google does not go beyond the superficial.

Is there something wrrong about not being a banker?




Honestly I haven't heard about ELNs untill you mentioned it yesterday. Did some googling and what I found is really low cost.

"You do not have to pay any brokerage charges, clearing fees, or GST on the purchase of the underlying shares. You only have to pay the costs (if any) incurred for the delivery of the underlying shares.
No upfront fees payable/charged"

How many percent of this $50k - $100k are used to buy into the asset and how much of it goes to cost? I think a high minimal sum required to purchase doesn't necessarily have to translate into high cost, and by cost I was referring to expenses like fees and charges, not the price of the product.

 

[Majestic12]

FYI, the commissions these RMs make from ELN is really a lot.

Clearly, people like Bigoya are only associated with the mass retail level of bankers. They fail to comprehend that the top private or priority-private bankers in any banks run enormous flow streams, such as loan books, derivatives, structured products and FX.

 

[elnewbie]

I dunno how much exactly but I can tell you that I'm a DBS TPC, and for a 50k, 3 month ELN, my RM treated me to a $20+ meal at Cedele.

I'm quite into these ELNs as it's a cheap way for me to accumulate certain shares at prices which I'm comfortable with.

Mind sharing the commission structure?

 

[cybercom8]

I dunno how much exactly but I can tell you that I'm a DBS TPC, and for a 50k, 3 month ELN, my RM treated me to a $20+ meal at Cedele.

I'm quite into these ELNs as it's a cheap way for me to accumulate certain shares at prices which I'm comfortable with.

crap, all the rms i met never treated me to anything

does dbs do single stock elns? many banks kept recommending 3 stocks elns whereas i am only keen on single stock

 

[dkgamer]

think elns is one of the most profitable product for the banks as they hedged your bets but i am not a savvy person so maybe can ask your bankers to explain more about elns to you.

ELNs are structured customized instruments. Banks earn from the distribution fee, not from the underlying performance of the fund. Those are classified as derivatives with much more complex combinations of forwards and futures. Seriously, if your at mass retail level, stay clear away from them.

That's one big benefit of bankers over financial advisors. If you need a highly customized structured product. The bank can facilitate to make it happen for you.

 

[cybercom8]

ELNs are structured customized instruments. Banks earn from the distribution fee, not from the underlying performance of the fund. Those are classified as derivatives with much more complex combinations of forwards and futures. Seriously, if your at mass retail level, stay clear away from them.

That's one big benefit of bankers over financial advisors. If you need a highly customized structured product. The bank can facilitate to make it happen for you.

thanks, was told customised products need much higher investment amounts so its out of my league as i just want to dabble a little

i just wanted eln for single stocks like apple, google etc back then because i was prepared to buy and hold those stocks if the strike price was reached...if not i just collect the premium as interest payment.

of course if super bullish on the stock, it's definitely better to just buy the stock directly.

most of the time, the elns recommended include a basket of 3 stocks A, B, C. problem with those is that i may only like stock A but may be forced to pick up stock b or c

 

[elnewbie]

Absolutely yes. They can even do USD elns if you prefer. Just tell your RM what your favorite poison is and they'll try to structure it.

If you're serious, PM me your stocks, I might just jump on the bandwagon as well if these counters interest me.

crap, all the rms i met never treated me to anything

does dbs do single stock elns? many banks kept recommending 3 stocks elns whereas i am only keen on single stock

 

[cybercom8]

Absolutely yes. They can even do USD elns if you prefer. Just tell your RM what your favorite poison is and they'll try to structure it.

If you're serious, PM me your stocks, I might just jump on the bandwagon as well if these counters interest me.

previously i was keen on apple and halliburton elns but the rm and investment guys who called me never reverted to me with the yield and strike price for many months when i first told them i was keen as the share prices were low then. then after the prices shot up a lot, one joker called to ask me if i am keen on halliburton eln now

the good thing about them not reverting to me is that i bought the shares directly from the market last year

now my exposure to equities is too high so waiting to sell some shares first before looking at elns again

 

[xxxjhxxx]

Different ELNs have different fee structure One of the ELNs (etfs underlying) that was offered to me have a distri fee of 4%. Min amount was 50k. You can go figure the amount the bank earn. But as to how much of the 4% your RM earns.. idk

 

[w1rbelw1nd]

Based on my experience as a ex-backend ops person, yes ELN is expensive depending on how exotic the ELN is, my ex-bank charges 2-5% more compared to what we buy from the whole sale banks. PBs need $$ for the their Ferraris

 

[elnewbie]

Perhaps the parameters you gave them, e.g. Strike etc were too restrictive ?

I had no problems getting Apple last year with a 8% yield.

previously i was keen on apple and halliburton elns but the rm and investment guys who called me never reverted to me with the yield and strike price for many months when i first told them i was keen as the share prices were low then. then after the prices shot up a lot, one joker called to ask me if i am keen on halliburton eln now

the good thing about them not reverting to me is that i bought the shares directly from the market last year

now my exposure to equities is too high so waiting to sell some shares first before looking at elns again

 

[cybercom8]

Perhaps the parameters you gave them, e.g. Strike etc were too restrictive ?

I had no problems getting Apple last year with a 8% yield.

huh? i only told them i am keen on certain stocks. i have no criteria for yield, duration etc, just waiting for their quote. heck, i was even going to accept strike 97% lol

at 8% what was the duration and strike %? i would have grabbed all those and earned myself better interest than the miserable 1.7-1.8%

 

[Majestic12]

Overall option premium is way higher for both the structured derivatives desk and for the RM due to much higher volatility.

crap, all the rms i met never treated me to anything

does dbs do single stock elns? many banks kept recommending 3 stocks elns whereas i am only keen on single stock

 

[Majestic12]

My speciality used to be 99% strike with a 103% knock out.

huh? i only told them i am keen on certain stocks. i have no criteria for yield, duration etc, just waiting for their quote. heck, i was even going to accept strike 97% lol

at 8% what was the duration and strike %? i would have grabbed all those and earned myself better interest than the miserable 1.7-1.8%

 

[Majestic12]

You can just go for a Quanto ELN - SGD base into US or any other foreign market counter.

Absolutely yes. They can even do USD elns if you prefer. Just tell your RM what your favorite poison is and they'll try to structure it.

If you're serious, PM me your stocks, I might just jump on the bandwagon as well if these counters interest me.

 

[SpeedingBullet]

A disproportionate number of RMs I've seen and/or met are horrible people, they are hazardous to your wealth.

But if you get assigned a good one, they can hold your hand for a long time and give u sweet deals - lower loan rates, fx rates, fx forwards (a good RM would introduce the Ringgit NDFs to trade during the scare a few mths back), industry research writeups, structured pdts (rly rly debatable), setting up of trusts, etc.

For me, I'm happy with IBKR as my "RM"

 

[wahkao3]

A disproportionate number of RMs I've seen and/or met are horrible people, they are hazardous to your wealth.

But if you get assigned a good one, they can hold your hand for a long time and give u sweet deals - lower loan rates, fx rates, fx forwards (a good RM would introduce the Ringgit NDFs to trade during the scare a few mths back), industry research writeups, structured pdts (rly rly debatable), setting up of trusts, etc.

For me, I'm happy with IBKR as my "RM"

can they gif me lower risk or higher returns? if no then no value add

 

[dkgamer]

can they gif me lower risk or higher returns? if no then no value add

The role of an RM is to distribute and facilitate. Whether he can make outsized returns for me I take it as a bonus. Most financial consultants and RMs do not have the ability to even read a 300 page prospectus and tell me what are the fine prints to look out for. Their job does not pay them to be analysts. IMO, I rather trust my own analysis and research than what an RM or advisor says. After all, the one who bears the risk after the product is purchased is me, not my RM or advisor. It's a joke when I meet advisors who don't even know how to price swaps

 

[edmund77]

can they gif me lower risk or higher returns? if no then no value add

Can share an example of a low risk and high return provide which the bank distribute? I'm curious if such products really exist.

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[staedtler_07]

Highly doubt there will be though. Any idea how is the Structured Note environment in DBS and OCBC?