Ultimate client

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Myths and legends of the market
The JC’s guide to the foundational mythology of the markets.™

Dandelion girl.jpg
The ultimate client’s granddaughter in a meadow, yesterday.

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The ultimate client himself is probably some benign, well-meaning, atavistic pensioner with few expectations beyond seeing out his autumnal years dandling a grand-daughter on his knee, and watching her blow dandelion fronds around a meadow bathed in golden light.

To this unitary goal he has ploughed the meagre returns of a lifetime’s manual work, spent down a pit or something, via diverse routes (stewarded by personal investment advisors who signed him up by reading a lengthy disclaimer from a playbook) into ISAs, retirement schemes, life insurance policies, and investment funds, each of whose asset managers outsource their trading functions to third party dealing desks, who hedge their actuarial delta with units in fund of hedge funds whose managers in turn invest in dynamic portfolios of actual hedge funds, who invest the proceeds borrowing securities to sell short on margin, pledging as they do the collateral to their prime brokers, who upgrade it by using it as collateral for high-credit quality bonds lent by agent lenders on behalf of the — ahh — pensioners for whom they hold those assets...

The real ultimate client is one who occupies the ultra-high net worth sector — this is a bland euphemism for the super-rich — the Saudi royals, South American dictators, the playboy offspring of a Russian oligarch who now loaf around Monaco hanging around with Swiss financial advisors who are pleased to pitch them “investment ideas” — people who have got so much money they don’t notice that their advisors relieve them of it by the millions each year, because — no-one misses a million here or there: it’s all just basis points, you know?

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