Choosing between prospective wealth manager can be a nuanced process, but these handy tips will help you zero in on the factors that matter most.
Many different types of institution come under the umbrella term “wealth manager” and there are many different flavours of firm within each sub-category. Making a choice is far easier, however, when you know what matters most to you in your particular circumstances.
Wealth managers fall into several broad categories, with each having distinct features which will help inform your choice.
Investment advisers (IFAs) are many investors’ entry-point into professional wealth management, helping clients to identify their financial objectives and creating a long-term plan for achieving them (such as working out your risk-profile and the asset allocation which would suit). While some do offer full-service wealth management, many stop short of actual running investments – meaning it’s likely you will need to access these separately at additional cost (or pay an additional layer of fees for outsourcing).
An investment manager will manage your portfolios, with some also offering financial planning (often via a subsidiary or associate firm). You might recognise some of the higher-profile investment management brands, but some even quite large firms remain relatively under the radar. Many investment managers function as “one-stop-shops” for wealth management, but like boutiques, clients will have to go elsewhere for banking services.
As the name suggests, boutique wealth managers are smaller firms which often focus on tailoring bespoke investment portfolios for their clients. Many boutiques have developed a particular investment style or specialise in particular markets or asset classes, meaning that they may be better placed to meet any special requirements you might have. Boutiques also tend to lead on superior service standards.
Private banks offer normal banking facilities, specialist ones for affluent individuals and often the full spectrum of wealth management services too. As well as investment and financial planning advice, private banking clients can also often benefit from specialist mortgages, access to private equity deals and private client lending facilities like Lombard loans. Higher asset thresholds and exceptional service standards are the hallmark of private banks.
Most of the large banking groups have specialist divisions for wealthy individuals – and in fact often several to deal with different levels of wealth. Clients of the big banks benefit from access to the full spectrum of investment products and services, as well as normal banking capabilities. This kind of offering can be particularly helpful for clients with complex, international financial affairs due to big banks’ size and reach.
As will now be clear, much of your choice of wealth manager will be determined by the services you need. Our smart online tool will clarify these in fewer than 15 questions, or you can talk to our expert team to discuss your requirements.
Level of wealth is another key factor our matching process filters providers by. Some boutiques are targeting larger clients, while others cater for those at a more modest level of assets; on the flipside, big brands aren’t necessarily limiting themselves to the biggest investors. It is often unclear from firms’ marketing literature alone where you will be most at home, which is one of the primary reasons our service was launched.
Location is another significant consideration. Some clients prefer their wealth manager to be quite close to their home, while others are happy to travel to London or another big city for periodic meetings. The wealth managers on our panel have offices throughout the UK, meaning that we can match you with both boutiques and big brands whichever your preference.
Qualifying factors taken care of, the choice between a boutique or big brand wealth manager then becomes more subjective.
The size of the organisation is important to consider. Some clients may feel that a smaller provider will be able to offer more in the way of personal service and durable relationships with advisers. However, others may derive comfort from knowing that their wealth manager has a very large client base including many other investors similar to them.
Ownership structure may also be important. Boutiques tend to be privately owned, often in part by management. You may feel that this represents greater stability and the freedom for the firm to be client-centric as there are no shareholders to answer to. Yet on the other hand, you might feel reassured that a big brand wealth manager is part of a wider, high-profile corporation.
Technological capabilities are also something our users increasingly focus on. Big brands naturally have larger technology budgets, so if having access to an app or client portal where you can view your investments is important to you that may help guide your choice. Many smaller organisations can have cutting-edge capabilities due to being more agile, however, so don’t dismiss boutiques out of hand on the basis of assumptions.
Along with service standards, investment performance and the costs incurred to deliver it will of course be your top concerns. Again, don’t pre-judge here.
Big brands may leverage their profile to charge slightly more than smaller firms, but then again, their size may deliver efficiencies that allow them to cut costs. Similarly, boutiques may charge a premium for more tailored services, but could also have more freedom (and desire) to be flexible on price.
When it comes to potential investment performance and cost, much depends on the type of portfolio a wealth manager will put together for you. Those desiring a truly bespoke – as opposed to model – portfolio may be better accommodated by a boutique, particularly if they wish to access alternative investments to target higher returns. But bear in mind that increased tailoring often comes at higher cost, which will mean greater investment returns will need to be on offer. Your net gains should always be the focus.
Our service is designed to match users with a shortlist of institutions which are all a good fit based on the facts of their situation and requirements. This is so that you can then meet with providers to discover which one feels right for you, safe in the knowledge they could all deliver what you need.
It may be, then, that you are matched with boutiques alongside big brands. In this situation, we would advise keeping an open mind and asking the same questions of all potential providers to ensure you are comparing like for like. Our guide, How to interview a wealth manager outlines the process step by step.
Finding the perfect wealth manager is based on a range of objective and subjective factors, so when it comes to large or small, boutique or big brand, there are really no right or wrong answers. We work with over 30 leading institutions of all kinds, meaning that whatever your preference we are sure to be able to offer a great match.