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About The Portal To Russia
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Email Dr. Palms
Sovetnik Pravitelstva CWA, Tovarichestvo Palmsa, Inc.
Investment Bankers. Washington, United States of America.
The new economic direction of "Privatization" of Russian Industry has left hospitals, and pension funds the task of caring for themselves and finding "rentabelnost", the ability of to pay their own way, to survive as a commercial entity. This requires that wage funds which are applied to health insurance and pensions must be invested to provide the benefit of interest over time. This will reduce the amount that a worker must pay to receive his benefits of medical care and pension.
Because of the unique position of the Russian economy it is necessary to protect such funds from devaluation of the currency and inflation and provide a real increase that keeps buying power of the fund growing at a rate that out-paces and out-performs inflation and devaluation. This requires a policy and strategy that protects ("Hedges") from domestic "exchange" risks and inflation.
By definition this requires such programs to be managed beyond the reach of the Russian government which is the cause of inflation and devaluation. Accordingly such pension and welfare funds ought to be denominated in a currency other than the Russian ruble and should be administered by a trustee outside of Russia. Any other approach will result in the "disappearance" of the assets of such Funds as a matter of government policy of Russia.
An important part of the work is:
In 1973 a small group of American consultants set out on a mission: To find for their clients the finest professional money managers, previously reserved for just the privileged few very rich. Twenty years later this commitment has become firmly established in "Palms & Company, Inc. Investment Bankers Consulting Group"
As Palms & Company, Inc. begins its sixth decade of existence, it is representing the "Consulting Group" which is the leader and largest of its kind in money management, and which is the authority on professional investment management.
1995 marks the 23rd anniversary of the Consulting Group and follows very successful years. In 1992 the Consulting Group established relationships with more than 40.000 new clients whose capital was all together $9.000.000.000,00. The Consulting Group now has total client relationships of 140.000.
Gains were made in each of the four major client segments.- $6.000.000.000,00 dollars in personal private investor accounts, $700.000.000,00 dollars in retirement plans and $2.000.000.000,00 dollars in joint-stock company accounts.. 65% of new clients were for management of pensions which received lower tax privileges. Assets have grown in every year but one- in 1988, after the October 1987 market crash - and now the assets total more than $50.000.000.000,00 dollars.
1992 was a difficult year. The U.S. Economy remained slow growing and interest rates fell to a very low level.. The stock market didn't begin to go higher until the last three months of the year. The hard currencies of all countries were attacked by high interest rates and the beginning of the European Currency Unit as a new currency. The Stock Market of Japan performed very poorly.
During this confusing year for investors of the world, the consulting group continued to grow. This shows that investors recognize the importance to have professional experts manage their money. The message the consulting group received from its clients is that when conditions are very difficult, its becomes even more critical to have expert managers of their money.
In 1992 the consulting group continued to improve. Most important were two "TRAK" (Trade mark) personal investment advice services. Since this program began in October 1991, 30,000 new clients have deposited with the consulting group more than $1.000.000.000,00 dollars to manage for them.
Because of the new necessity to manage pension programs for the workers of Russia, the consulting group made the principles of the TRAK strategy larger and began "401(k) TRAK (Trade Mark) in 1992. Because of other unusual way of communicating with its clients, the Consulting Group is the first pension management joint stock company in the pension industry which is permitted by the United States Government (Department of Labor) to provide investment advice directly to their clients.
In 1992, clients of the consulting group were asked if they were satisfied with this investment management. 97% said they were satisfied. The survey also informs us that clients like to be informed about all consulting group activities. So the consulting group agreed to send a newspaper every 90 days- "On Course" that reports to our clients what is happening in the capital markets and discusses questions about investment.
The consulting group will continue to improve the research capabilities of the analysts who perform the evaluation of investment managers. Of the 8000 Investment managers, the consulting group personally visit 400 each year, to keep informed of their performance. The consulting group's responsibility is to identify the investment managers that can perform the best to reach the financial goals of our clients and also to guarantee that these managers continue to follow the clients instructions about the way that they wish their money to be invested. In 1992 the consulting group removed three investment managers. In 1992 the consulting group added four new investment managers.
In Moscow, local personal service is provided by our local representative. We intend to strengthen our position as leader in 1996. We look forward with great enthusiasm to assisting Russian companies to solving difficult questions about their health programs and pension programs and management of their money. We work always to reach the goals of our clients for concrete results.
1987 - 2300
1989 - 9400
1992 - 40000
total consulting group client assets have increased an average of 35% annually in the past 10 years
1974 - $ 13.000.000,00
1977 - $ 120.000.000,00
1980 - $ 800.000.000,00
1983 - $ 3.800.000.000.00
1986 - $13.700.000.000,00
1989 - $26.000.000.000,00
1990 - $52.000.000.000,00
The mission of the Consulting Group is to provide private personal investment management service to every client. These clients are in three major types: private citizens, pensions of workers, and organizations.
In 1992 private citizens gave the Consulting Group more than $6.000.000.000,00 dollars to manage for them. Private citizens understand that managing money is like managing a business. Both require time, experience, knowledge, access to information that a private citizen does not have. The Consulting Group helps and protects citizens.
Uncertain conditions in inflation and currency exchange require special solutions and strategy. What was a comfortable knowledge of an acceptable pension a few years ago has now become too little for the new conditions. Correcting these mistakes makes necessary great attention to investment choices and decisions.
The cost of an education has become suddenly very high. It grows even faster than inflation. Providing your children with a future and education in the best schools of the world makes necessary experts to plan your strategy.
Many older people cannot live from the pensions they now receive. If their children want to see them safe, then a plan must be made that will give them the same life, even if inflation goes higher.
The Consulting Group works with a "Trust Company" and can provide storage of valuable papers. We can provide trustee services that satisfy the fiduciary demands made by the U.S. Government for protection of pension money from any dangers of disappearance.
In 1992 more than $700.000.000,00 dollars was given to the Investment Managers to manage. By the end of 1992 about $1.720.000.000,00 of pension money was being managed by the fully chartered trust company.
The management of government money and government agency money is determined by precise norms. Our services can help governments to organize the steps for these normative actions.
We understand the special norms that are required to handle international grants of money for economic assistance, pollution and environment protection, health services, studies of nuclear plants, etc.
The expenses are frequently unpredictable and receiving of money very unstable. This present a challenge for managing the money properly. We know our clients want to earn the best possible profit so that the money will be sufficient to complete their spending policies.
Cooperation is required to manage money jointly between our firm and Oblasts and Okrugs or Ministries. Our trustees and labor union trustees are interested to accomplish their responsibilities. Our clients have discovered that the services we give them provide a strong assurance for safely managing money.
The most important thing we give our clients is our Financial Consultants. An 'FC' gives the client a direct communication link to the work of investment. He is a friend and an ally and advisor. The client receive professional advice, expert experience and good decisions from the 'FC' about the management of money under international conditions.
To keep the education of FC's at high norms they receive continuing training directed by 16 deputy General Directors. It is the work of the Deputy General Directors to teach new methods to FC's. In 1992 the Consulting Group paid $1.500.000,00 dollars for training of their FC's. During the past five years, FC's, as a group, completed more than 80.000 hours of class and seminar instruction. The Consulting group has a special group of Association of Professional Investment Consultants (APIC).
Every investor has different ideas, goals and opinions. So we create a special strategy for each client. We listen to what the investor wants. What does he want to accomplish and how much risk does he wish to take. We listen to what the client says should be the results and when they
should happen. The important questions are: When will the investor need to receive cash and how much? Will the investor accept short periods when the investment will become lower in order to reach a higher result in a longer period of time? When the important questions are answered the FC will help the client to take actions that will reach his purposes. The second step is to decide which investment manager is able to follow the strategy of the investor. The manager must invest the money in the type of investments that the client likes and which can provide the results that the client expects within the time that the client wishes the results.
The final step is to watch the investment managers. The Consulting Group and FC's conduct frequent investigations of the actions of investment managers to be certain that the manager is following the client's instructions and that results are as expected. The FC's gives attention only to the investor's interests. If the conditions of the client change the complete work can begin again to make changes that the client wants.
Each time the FC recommends an investment manager to the client, he receives the expert advice of more than 50 analysts who are responsible for judging the investment managers. There are 18,000 investment managers registered with the Securities Exchange Commission (Securities Ministry). It is not simple to find the best one for the client.
Every year the judging group of the Consulting Group visit 350 investment managers in Europe and the United States. The analyst (judging person) study whether the investment manager's strategy can make the client's money greater and that the manager is following the strategy the client selected. This process tests the investment manager every year. The results of the judging are given in writing to a committee of 12 financial experts, which is called the Consulting group Evaluation Committee. The committee then decides if the performance is acceptable. During the past five years the Consulting Group has terminated seven managers and added 23 new ones. The Consulting Group maintains a computer data base of more than 800 investment managers which now each manage more than $800 million. This is about a total of $640.000.000.000,00 dollars.
The Consulting Group has offices in 29 cities. Some cities have more than one center. The Consulting Group employs a staff of 174 people to provide technical information to clients. The Consulting group trading desk carry out 16.000 transactions every day. In 1992, 456 million shares of stock and bonds for a value of $7.000.000.000,00 exchanged (bought and sold) by the traders for the clients.
FC's also receive special advice from 16 Consulting Service Deputy
General Directors in 16 different cities. 31 Technical specialists perform research for the FC's to answer the questions of clients. The technical analysts are experts for finding information about world markets and the results, information about investment managers and strategy for managing money.
The Consulting Group believes it is very important for Russian investors to be very well informed by us about their money and how it is managed and about political, economic and monetary events in the World. We accomplish this by providing the client complete information about results every 90 days. Second, we offer them research information to keep them informed of other variants that are possible and of important new events in Russia and the rest of the world.
The Wall Street Journal is the most important financial newspaper in
America and is also distributed in Asia and Europe. The Consulting Group, in concert with the Wall Street Journal conducts quarterly judging of investment managers. Such reports are printed in the newspaper which is read by millions of readers.
We welcome discussion with new investors and questions from them. We invite you to consider our firm for your money management.
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