by Structured Settlement Watchdog
The March 2009 NSSTA newsletter, The Structure, features a piece mocking The Halpern Group's Common Trust Fund, titled Halpern's "Superior Results." The critique, adapted from a member company newsletter, inaccurately quotes The Halpern Group, leading to a significant misstep.
The newsletter said:
"The Halpern Group recently issued a press release claiming "superior results" because investments using the firm's software lost 17 percent of their value during 2008"
What Halpern DID say, among other things, is
"that investment return results for assets managed by its patented software consistently beat S&P 500 returns by more than 50 percent in 2008. While the S&P 500 lost 37 percent of its overall market value last year, Halpern's software showed a decline of just over 17 percent/.
The company credits these superior results on its patented Recovery Management (RM) Software, which is proven to provide investment returns comparable to the S&P 500 in the best markets, with historically demonstrated loss reduction in the worst markets".
The NSSTA March 2009 newsletter accurately observed that sometimes "truth is stranger than fiction," though not in the way they intended. By misquoting, they inadvertently weakened their position and that of their membership in this instance.
Furthermore The NSSTA missive also features a link to a press release (see above) issued by the Halpern Group which, if anyone took the time to read it all, also discussed superior results over longer time periods compared to the S&P 500.
It seems reasonable to critique selectively, provided the information or claim being critiqued can stand on its own. However, in the case of "The Structure," the cited rate of return focused on a single year, while the same press release mentioned returns from other years with surges in investment returns, which feels like a half-baked approach. Honestly, I’m surprised that NSSTA would stumble on this, knowing its members might rely on the information. As an NSSTA member, I feel embarrassed that our industry trade association fails to present the full story in such a widely shared piece.
It seems that some settlement planners, perhaps unknowingly, are undermining their own credibility during mediation and competitive processes due to an apparent "incomplete read." As the headline indicates, such missteps only serve to benefit their competition.
Clearly stable value products such as structured settlements have a place in settlement planning allocation
- Each case must be evaluated on its own merits, as not every plaintiff is risk-averse.
- Some may be willing to accept a modest level of risk in exchange for the potential of long-term rewards from a portion of their settlement recovery.
- The EPS newsletter highlighted what is required to recover from a market loss. Some questionable practices might involve individuals recommending trust products or vendors offering liquidity alternatives to Halpern. It is crucial to avoid falling into the trap of being perceived as "hypocritical buffoons." Settlement planners, in my view, should focus on assessing how those alternative products perform. How did they fare in 2008? What has their performance been over time?
- Every product and solution has its strengths and weaknesses, and these should be the focus when presented in a competitive context.
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