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Finding the right balance

When assisting clients in shaping the overall risk profile of their investment portfolios, private banks need to be prudent in using investment leverage and derivative solutions as these are not without pitfalls.

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Mr Lim: "Private banks need to adhere to the fundamental tenets of KYC (Know Your Client), account planning and prudence in advising clients on balance sheet construction and liability management, even as they focus on helping clients generate attractive returns on investment portfolios."

FOR quite some time now, investment leverage and derivative solutions have been pervasive features of investment portfolios of private banking clients. The investment thesis underpinning these developments is irrefutable: investment leverage and derivative solutions are tools that assist clients