The new advisers reinventing investment banks
Anatomizing bankers' advice
At least once a week David Shimko undertakes what over the past four years has become a routine process. "I rip apart risk-management proposals which the investment banks have pitched to our clients," he says. "We show our clients the ways in which the banks would profit from the advice."
Banks are, he says, too often geared to offering solutions based on what trade can bring in the most money for the bank, or simply on what products a bank has at its disposal. "If there were a choice between using an insurance product and options, for example, we have no bias, whereas a bank might favour one simply because they can execute it."
Shimko should know how to judge that. He used to work on Wall Street, having been head of risk-management research at JP Morgan in the early 1990s before moving to Bankers Trust where he became principal and head of the risk management advisory group.