Chris Zander Featured in the New York Times on Investing Bonuses

January 22, 2010

By Paul Sullivan

New York Times

Investors are going to be a little more cautious with overspending, said Christopher Zander, Evercore Wealth Management's wealth advisor, in the New York Times article At Bonus Time, Less Appetite for Toys by Paul Sullivan.

That caution comes even though bonus pools are climbing again — and can be attributed to two main drivers. The first is the need to have cash on hand to cover basic expenses, a lesson learned the hard way in the depths of the financial crisis last year, according to the article. The second is the uncertainty of bankers over how much of their bonuses they will actually get, and when they will get it as most banks are splitting bonuses between cash and restricted stock.

With the cash portion of their bonus, we are advising clients that they need to make sure they're allocating a portion to household expenses," Zander said.

Those with a little more risk appetite have been turning to hedge funds that are structured like mutual funds or exchange-traded funds, Zander said. Those hedge funds allow investors to withdraw their money when they want.

The desire for this more liquid structure is a direct by-product of the credit squeeze. When hedge funds invoked clauses in their investment agreements that kept investors from taking their money out — so-called gating provisions — investors scrambled to raise money from other assets. "After going through this in 2008, individuals are more mindful of liquidity," he said.