FRANKFURT A German court named Frankfurt-based Deka Investment on Wednesday as lead plaintiff for 1,470 damages claims against Volkswagen (VOWG_p. DE) totaling 1.9 billion euros ($2 billion). The plaintiffs say they lost money on a drop of almost a quarter in Volkswagen's share price when it admitted cheating U.S. diesel-emissions tests in September 2015. They say Volkswagen should have warned the market earlier of the risk. The claims represent just a fifth in value of the investor cases pending at the Braunschweig higher regional court and a small fraction of the legal headaches that Volkswagen faces worldwide from investors, consumers and regulators. The claims are being gathered in Germany's closest equivalent to a class-action case, in which one case is picked as representative and the outcome applied to all the others.
In all, around 1,540 investor cases are pending at the court with a total claims volume of 8.8 billion euros. A court spokesman said most of the other claims were from foreign institutional investors.
Other existing plaintiffs can apply to join the test case proceedings for the next six months but new plaintiffs cannot come forward to join. The court said it would set a date for a first hearing within the next three months.
Morgan Stanley is hiring hundreds of tech-savvy specialists at its wealth management branches to train advisers on the firm's new digital tools, the bank's co-head of wealth management Andy Saperstein said in an interview. The digital adviser associates will help advisers get up to speed on new products, such as software that recommends customized investment ideas and apps that let advisers text or video chat with clients. They will also help advisers promote their presence through social media, Saperstein added. The effort is part of a broader technology push by Morgan Stanley, which has been investing heavily in new digital tools and products, many of which will be rolled out later this year. Although the tools will not necessarily generate revenue, they will help financial advisers do their jobs better, Morgan Stanley Chief Executive James Gorman said in January. They may also attract and retain customers who prefer digital options. “We’ve realized that our ability to invest resources in tools and technology is only as good as the advisers’ ability to implement this into their practices," Saperstein said on Friday. "We need to figure out ways to support advisers in that change."
The digital specialists will be trained at Morgan Stanley's Purchase, New York wealth headquarters. They will then move to branches throughout the U.S. beginning this summer. They may eventually be incorporated onto adviser teams, Saperstein said. Morgan Stanley’s digital revamp reflects a broader industry effort to keep wealth management relevant to younger Americans, who are accustomed to conducting their financial lives online and may not see the need for professional advisers.
The average age of a wealth management customer industry-wide is 62, according to data services company Pricemetrix, while the average age of a financial adviser is 51, according to research firm Cerulli Associates. Only 11 percent of advisers are under the age of 35. As traditional brokerages get older, several wealth-management startups have been launched, offering automated, low-cost investment advice geared at younger clients. These so-called “robo-advisers,” like Wealthfront and Betterment, manage clients’ money using algorithms and allow clients to see and alter their investments online, bypassing human advisers.
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