For instance he is recommending moving money into HYD which seems to have a higher risk at an average return ( for this asset class )ABHFX seems to have a higher return at a lower risk.
Often [his recommendations] are on the lower end of best performing funds in the class.
Historical Mutual Fund performance has little to no predictive power for future performance so this shouldn't be an immediate disqualification. Some good starting questions for you to evaluate a manager:
- Does he have solid reasoning behind for these investments?
- What is his track record? (though this is only lightly predictive of future results)
- Does he seem to be steering your family member toward especially expensive funds that make UBS more money?
Does this mean it's a mistake to use UBS (or any bank limited in its fund offerings from other institutions) as the "wealth management" institution?
All wealth management institutions have restrictions on possible investments. Obviously, if your relative can't invest in the funds she wants that is an issue.
Do these [Morningstar] ratings mean anything at all?
This has been studied pretty carefully and the academic consensus appears to be that they have no consistant predictive power. Kräussl and Sandelowsky wrote a particularly comprehensive paper on the subject.
