BRINKS HOME SECURITY MAY HAVE DIRECT TIES WITH MADOFF

certain investing class has for years paid through the nose for what was thought to be world-class money management by investing in funds that promise access to the best hedge funds.

fund-of-fund industry.

funds or other non-traditional investment vehicles.

expenses are exorbitant: often a 1% management fee and between 5% and 15% of any gains.

so much when they're losing money, or worse, investing in a fraud.

the actual investment of money," says Michael Lewitt, president of hedge fund Harch Capital Management. "To convince people they add value they sell themselves as offering diversification, due diligence and access to exclusive hedge funds. The Madoff scandal hits at the heart of this model, and could be devastating for the industry."

their clients' money to Madoff -- money that may now be gone.

and Maxam Capital Management were funding a ponzi scheme for a period of decades blows up the raison d'etre for a fund-of-funds," said Lewitt.

with the same negative trends slamming the average hedge fund -- investors pulling money out, poor performance and lots of volatility.

hedge funds by about 2 percentage points.

these two layers of fees made their chances of making money pretty remote," said Steve Cesinger, the chief financial officer at private equity and real estate investment firm Dewberry Capital.

victim of fraud and that it did due diligence and hired auditors.

that fund-of-funds managers will be exposed to that litigation," said Steve Thel, a law professor at Fordham law school where he teaches securities regulation.

questions. First, did the fund managers conduct reasonable due diligence. And second, did they disclose to investors that they were not diversified.

that proper research was conducted. As for whether proper disclosures were made, "that's still to be discovered," said Thel.

With the small budget Brinks operates on, I doubt it.

Why would a company spend millions of dollars on advertising, when they can just lower their rates and get more client referrals that way?

All they are doing is keeping rates high. Their overhead must be choking them beyond belief. ADT doesn't need to advertise that much, or nor do they resort to using scare tactics like Brinks does.

Jim Rojas

a certain investing class has for years paid through the nose for what was= thought to be world-class money management by investing in funds that prom= ise access to the best hedge funds.

called fund-of-fund industry.

edge funds or other non-traditional investment vehicles.

but the expenses are exorbitant: often a 1% management fee and between 5% a= nd 15% of any gains.

ut not so much when they're losing money, or worse, investing in a fraud.

ed from the actual investment of money," says Michael Lewitt, president of = hedge fund Harch Capital Management. "To convince people they add value the= y sell themselves as offering diversification, due diligence and access to = exclusive hedge funds. The Madoff scandal hits at the heart of this model, = and could be devastating for the industry."

ll of their clients' money to Madoff -- money that may now be gone.

eenwich and Maxam Capital Management were funding a ponzi scheme for a peri= od of decades blows up the raison d'etre for a fund-of-funds," said Lewitt.

uggling with the same negative trends slamming the average hedge fund -- in= vestors pulling money out, poor performance and lots of volatility.

ing hedge funds by about 2 percentage points.

e that these two layers of fees made their chances of making money pretty r= emote," said Steve Cesinger, the chief financial officer at private equity = and real estate investment firm Dewberry Capital.

t was a victim of fraud and that it did due diligence and hired auditors.

l and that fund-of-funds managers will be exposed to that litigation," said= Steve Thel, a law professor at Fordham law school where he teaches securit= ies regulation.

uestions. First, did the fund managers conduct reasonable due diligence. An= d second, did they disclose to investors that they were not diversified.

argue that proper research was conducted. As for whether proper disclosure= s were made, "that's still to be discovered," said Thel.

Not likely, Brinks Security has been a profitable company with low attrition for quite a while whereas ADT is currently losing more customers through attrition than they bring on

Besides if you are a security company protection houses from burglars how else are you going to advertise? "Brinks Security.....it's a keypad......and.......a keypad.."

no false alarms that way...just two keypads :-)

I have done many ADT takeovers over the years. I noticed a trend that every zone was programmed as entry/exit, and a 30 second dialer delay in place...what the hell is up with that?

Jim Rojas

RHC: That's likely there version of a false alarm prevention measure. Rather than program cancel codes, they just make it so long until the panel actually starts to send, that in most cases a false trip can be cleared by the user. I have seen panels with a full minute programmed in before the dialer starts to call....

The danger there is the client calls ADT and says false alarm, don't dispatch etc. The operator says, we never got the signal. You know where it's going after that....

With 8 million accounts, realistically, how could they do anything but...? I've seen accounts with no test signal either probably for the same reason - keep the extraneous signals down !!

I can't explain the "every zone" part but the 30 second dialer delay cuts down on a ton of false alarms, you can't install (legally) a panel without it in Texas.

RHC:Interesting ! Here there are no such restrictions - hell, we don't even have the most basic of licensing (nor for locksmithing either....go figure). All zones with delay means fewer false alarms (translation; fewer signals for their massive stations to have to handle I would guess....)

Yes CP-01. I also program 15-30 dialer delays, but also use cancel codes.

On this ADT install, every door, window, and motion was programmed the same way, entry/exit delay. I don't recall what the actual time delay was, but if this is ADT's answer to reducing false alarms...wow.

I was told that ADT has been using Lynx systems with GSM radios on strip mall installations in the New York area. A few stores were broken into, the Lynx system was obviously smashed. The problem is with how ADT handles the signal that comes in from the GSM radio. They do not dispatch or even call the customer on ECP failure...YIKES!

Jim Rojas

I took a look at the licensing in NYC...wow. They might as well not even have bothered with licensing.

NYC lists all licensed persons as an ALARM INSTALLERS, not a alarm contractors. Not all license holders are installers.

No documented proof of general liability insurance is kept on file or verified prior to issuing licensing.

No license numbers are required on business cards or on all vehicles used to conduct business...

So anyone with a few bucks in his pocket can take a test, and get a license within 90 days...what a joke.

Jim Rojas

Hey that explains Tom Fowler :)

/now running away

Hey, at least Tom has experience...(er...does running his mouth count?)

I can understand someone that has been in the business for awhile as an employee being grandfathered in. But to allow anyone without experience at all to go ahead and BUY a license defeats the purpose.

Florida is way different:

1. You must be a florida resident for at least 3 years.
2. You must show prior experience for a minimum of 5 years.
3. You must have an active corporation on file with the state.
4. You must show proof of general liability insurance, workman's comp, vehicle insurance, and a valid tax id & resale number on file prior to being accepted to taking the exams.
5. Upon license renewal, you must take state required continuing education courses, and provide updated proof of insurance etc.

This has just about eliminated all the fly-by-nighters here.

Jim Rojas

RHC: One of the other things it tends to do is keep pricing higher. With no trunk slammers giving away service, prices are going to remain high.

I helped a friend down in Panama City shop for an alarm contractor. My expertise came in only in so far as to know the proper questions to ask about the contractor, the system and adequate design. The company he chose did a decent job, using Ademco equipment (albeit with a lot more wireless than I would have used, but then attics are no fun to crawl around in....:((..) He chose a small company out of Destin, Florida to do the job....

However, the final price was almost four times what it would have been here in Canada for exactly the same system in our unregulated environment here in Ontario......

I doubt regulation was a factor in the increased price

RHC: Mark, what would you say would be the reason for such a drastic difference in pricing ?

It seems to me, with no trunk slammers forcing things to the bottom, existing companies are only too happy to charge "what the market will bear" knowing full well that customers can't get lower pricing anywhere else. Over time, this would certainly tend to keep pricing way up there. True fair market competition has always tended to force pricing down to more reasonable levels all other things being equal. For example, here in Canada, cell phone pricing is astronomically higher than in the US, due to lack of government regulation and an inherent level of collusion between network suppliers. Suppliers claim it is because of the unique geography of our country, but that rings pretty hollow to most people. There is no real competition !!

With nothing to force pricing to more reasonable levels (competition or regulation), the consumer is always going to end up getting it in the ear, in the drive to "maximize corporate profitability"

Up here, there is always someone right around the corner giving away alarm services, making it somewhat more difficult to charge a fair market price (not impossible mind you, only needing a different marketing approach to be successful.....)

Then how do you deal with; "I set my alarm off accidently, why didn't you call, my alarm's not working...I want to cancel service" Its much better to just train the client correctly to call or wait for the call. To add another 30 seconds to the 30 second entry delay seems really reallly dumb.

RHC: Crash, I don't disagree with you. However, it does make more sense when you remember how poorly most alarm users remember their initial training. Hell, after two years or so, a great many of my customers seem to barely be able to remember how to use it, let alone remember such esoteric features as cancel codes. I drill it into them, and explain in detail how this can prevent a false alarm fee, but they still call thinking their alarm doesn't work. And when they call with a question, most don't have a clue even what make of panel they have in service.

You can train till your blue in the face but a lot of people just don't get it.

First thing they always lose is the user manual

THIS!!!!!!!!!!!!!! is exactly why I don't participate in all of this crap that they keep trying to jam down our throats about training and delays and delays on the delays, and auto rearm and cancel codes and anything else to stop the alarm system from working. When the alarm gets tripped, central calls and that's all the customer wants to know and no matter how much time you spend teaching them all of the intracacies of the system it's only natural ..... after a year or more, of simply having to arm and disarm the system , not ever having a false trip..... they don't even remember how to bypass a zone, much less what a cancel code is ...... or why or what it's for.

How may times ..... after spending more than an hour with three or four people in the family training after the install, that you get a call a couple of years later .... "my alarm wont arm because it says something about the living room windows ..... so I haven't been arming it". And then when you get there, you find that it says living room windows because that's the zone they had a false alarm on and all they had to do was push the reset button to clear the screen or there really is a problem but they don't remember that they can bypass a zone.

I still spend the time training but I know, in my heart, that 90% of what I'm telling them is going to be forgotten along with where they put the instruction manual.