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Portfolio managers at Bessemer Trust, financial adviser to ultra-wealthy U.S. families, took an extremely defensive posture a few weeks ago amid some of the most volatile financial markets in more than 80 years. A sluggish U.S. recovery, an expanding debt crisis in Europe and political deadlock are just some of the factors contributing to wild ups and downs in stock prices. As markets convulse with growing frequency, often for no apparent reason, many small investors are heading to the sidelines. Now, apparently, families with tens of millions of dollars at their disposal are also fleeing the market. "Right now, 50 percent of our balanced growth portfolio is in cash, bonds and foreign currency," Bessemer Chief Executive John Hilton said at the Reuters Global Wealth Management Summit on Wednesday. "Historically, we'd hold only 20 to 25 percent (of cash and bonds) in the portfolio." That change took place about two weeks ago, he said. August was the seventh

Stiff competition for top private bankers has kept a floor under pay even as low interest rates, flaccid client trading and tougher regulation squeeze industry profit margins. Sky-high pay and bonuses for investment bank counterparts may once have turned private bankers green with envy. But the drive to slash wage bills and rein in risk has made investment bankers expendable as many banks realign their business around more stable private banking. "Pay was never extreme in private banking -- it's not as subject to a correction as in investment banking," Deutsche Bank global head of private wealth management Pierre de Weck told the Reuters Wealth Summit this week. Stricter rules on capital have curbed profits in many areas of investment banking and a number of large integrated banks like UBS and Bank of America have pledged to cut back on capital guzzling businesses and shrink staff numbers, piling downward pressure on pay. But in private banking, competition remain

As brokerages search for ways to grow in a tight economy, many firms are cutting back on new adviser training programs and instead investing in experience. "We've consolidated a lot of the hiring," Morgan Stanley's ( id="symbol_MS.N_0"> MS.N ) president of global wealth, Greg Fleming, said at the Reuters Wealth Summit this week. He said that Morgan Stanley decided this year to cut the number of people it brings into its adviser training program by nearly 30 percent, to 1,250 adviser trainees per year, from 1,750 trainees. On average, about two out of 10 in a typical training program will be successful and start a career at a firm, said Danny Sarch, a financial services recruiter based in White Plains, New York. Brokerages facing tighter budgets are weighing that with the greater certainty that comes with hiring an experienced adviser, Sarch said. "Morgan Stanley, from their Dean Witter routes, had always been aggressive in hiring young trainee

Private banks are telling their clients financial volatility surrounding Europe's debt crisis will continue for at least a year as more of the continent's rich seek the comfort of household names or state backing when choosing where to bank. "We are telling (clients) very honestly nobody knows how this is going to evolve and you have to be extremely careful in terms of your exposure," said Alexandre Zeller, head of private banking for Europe, the Middle East and Africa at HSBC. Pierre de Weck, wealth management head at Deutsche Bank, said during the Reuters Global Wealth Management Summit that clients could expect at least another 18 months of volatility. "If you're short term oriented and you cannot take pain, reduce risk because we are going to have a bumpy road over the next 18 months until this European sovereign crisis is resolved," he said. The market volatility since the summer and fears over bank solvency have boosted the kind of instituti

U.S. small businesses borrowing hit a five month low in February, in the latest indication of slower economic growth in the first quarter after an unusually harsh winter. _0"> The Thomson Reuters/PayNet Small Business Lending Index, which measures the volume of financing to small companies, fell to 110.5 in February from a reading of 116.5 in January, PayNet said on Tuesday. That was the lowest level since last September. The index continues to retreat from a near seven-year high touched in December. Still, it was 5 percent higher than it was in February 2013, an indication of underlying strength. "Small business investment expansion signals moderate GDP growth," said PayNet founder Bill Phelan. Unseasonably cold weather weighed on economic activity at the end of 2013 and the beginning of this year, setting the tone for a weak first quarter. Growth in the first three months of this year is expected to have slowed to an annualized pace below 2 percent after expa

French bank BNP Paribas was warned in 2006 by a high-ranking U.S. Treasury official and in three reports by legal experts that it risked being penalised for breaking U.S. sanctions, according to Le Monde newspaper. _0"> Since France's biggest bank flagged the risk of a big fine in February this year, sources close to the affair have said it ignored early warnings of the risks it faced. They pointed out that the alleged offending transactions being investigated by U.S. authorities continued until 2009. The French newspaper's report, written as talks accelerate towards a possible $10 billion fine and other penalties, said Stuart Levey, then the U.S. Treasury Under Secretary for Terrorism and Financial Intelligence, made a visit to Paris in September 2006. The paper, drawing on the findings of its own investigation, said Levey met the bank's top officials, including Baudoin Prot, who has since become chairman, in its boardroom. Levey was there not to talk about

An inmate at a notoriously lax open jail was caught trying to smuggle a rabbit inside to keep as a pet. The prisoner at Hollesley Bay open prison in Woodbridge, Suffolk, is thought to have found the animal while outside on day release. He was able to bring the rabbit back inside the prison - nicknamed Holiday Bay because its laid-back regime - where convicts managed to build it a hutch and started treating it as a prison pet. Lax: The prisoner was able to bring a rabbit back inside Hollesley Bay open prison in Suffolk - nicknamed Holiday Bay by inmates Prison wardens eventually found and confiscated the rabbit, then gave it to a rescue centre. The inmate is thought to have found the rabbit roaming wild, as opposed to taking it from a previous owner. It is unclear whether the pet was kept in one prisoner's room or elsewhere in the jail.   More... Thief breaks INTO Suffolk jail through a skylight and steals £3,000 worth of cigarettes For