Could do better? Why it pays to regularly review your relationship

Your relationship with your wealth manager may be ticking along just fine, but is that really enough? Regularly reviewing your provider could pay real dividends in terms of getting better investment performance, service levels and fees.

Inertia is real phenomenon in financial services. People tend to stick with providers that are just OK (or even downright disappointing) due to misplaced fears or lack of time, and so deprive themselves of far better results. Incredibly, research suggests you are more likely to get divorced than move bank accounts (average relationships stretch to almost thirty years, even where customers are unhappy).

We also see this in wealth management. Alongside newcomers to professional advice, a high proportion our users are existing clients interested to know if a better provider is out there. Often, they tell us they have been underwhelmed with their current firm for a while – sometimes even years – and have only been finally shaken out of their inertia by a “final straw” event. Others simply wish to confirm that they really are getting the best deal for their money.

Invariably, both kinds of individual are extremely happy they explored their options through us and put themselves on a fast-track to the kind of relationship they had been looking for all along.

Key Criteria to assess

We think of good wealth management relationships as being based on a triumvirate of Key Performance Indicators: investment performance, fees and service. If your wealth manager is truly satisfactory, they should be delivering well in each of these areas. And, while outperformance in one area can make up for a little slippage in another, you should not put up with consistently being disappointed. You should always seek the best – it is out there.

While outperformance in one area can make up for a little slippage in another, you should not put up with consistently being disappointed. You should always seek the best – it is out there

  • Are your investments performing as expected?

Your wealth manager should have agreed an investment strategy that is perfectly aligned with your profile and financial goals, and it should be delivering well against your expectations.

Don’t put up with sub-par investment performance as even small increases in yearly returns can make a huge difference to your financial position. Over 20 years, a £6,000 annual investment would compound to just under £240,000 on a 6% yield, but if returns were increased to 8%, you’d have over £300,000 – enough to buy a very nice car.

Don’t put up with sub-par investment performance as even small increases in yearly returns can make a huge difference to your financial position

Read Getting granular on investment performance: key questions to ask your wealth manager to make sure you are getting the results you are paying for.

  • Can you get similar results for even slightly lower fees?

It is very easy to think that half a percent difference in fees won’t make much of a difference, but you couldn’t be more wrong. Fees eat into your net returns at a compound rate, just as your returns grow in the same way on the flipside.

Trimming even a little from the fees you pay will make a massive difference to your wealth. If you invested £200,000 over 30 years, achieving an annual 7% return and your fee was 1.5%, you would eventually end up with almost £1m. If, however, you were paying 2.0% you would get closer to £864,000.

The number of people who must be losing out on hundreds of thousands of pounds because they continue to accept high fees hardly bears thinking about. Make sure you are not one of them by reading What to expect from wealth management fees.

  • Are the service standards good enough?

Clients of lesser wealth managers often feel like they’ve been mis-sold on the relationship side of things. They were promised a personal adviser and a high-touch service based on real understanding, but all too often find themselves battling against unresponsive staff, poor processes or a general lack of interest that simply doesn’t justify their fees.

Insist on great service, as it should be a given. As our People’s Choice Awards highlight, there are many firms going above and beyond to really delight their clients.

Top Tip

There are a plethora of reasons why regularly reviewing your wealth management relationship is an excellent habit. Better performance, value for money and service await. You have everything to gain and nothing to lose by exploring your options through our fast and free matching service.
Lee Goggin - Co-Founder

Lee Goggin

Co-Founder

  • Is the fit still right?

Companies can evolve rapidly and a shift in business strategy, offices or workforce could mean that your provider ceases to be a good fit quickly. You could equally detect a creeping change in ethos which eventually stops the relationship feeling right.

You must make sure that your wealth manager remains focused on serving you well at a time when some are choosing to concentrate on only the highest value clients. And, if there is a merger and acquisition, only stay if the qualities that initially attracted you to the firm remain.

  • Am I being offered everything I need?
Changing business strategy means that firms’ product and service offerings can alter dramatically. At the same time, your profile and needs will change a great deal over a lifetime, which is another compelling reason to regularly review your provider. Your adviser should know you and your goals well enough to make sure you have access to all the advice, services and financial products you need. This proves they are listening.
Your adviser should know you and your goals well enough to make sure you have access to all the advice, services and financial products you need. This proves they are listening
Bear in mind that wealth managers can assist in every element of your finances but there are huge differences between what firms can offer (which often depends on the type of organisation they are). Options like a Lombard loan could really boost your finances – assuming your provider can offer them.

How often should you review a relationship?

We would advise reviewing your wealth management relationship at least every three to five years, but also as a matter of urgency if there has been a significant change in your needs or the provision from your wealth manager.

We would advise reviewing your wealth management relationship at least every three to five years, but also as a matter of urgency if there has been a significant change in your needs or the provision from your wealth manager

Before our launch, there was no way for affluent individuals to efficiently find the right wealth manager for their profile and needs. Drawing up a shortlist of appropriate ones would require endless internet sleuthing, so it’s little wonder that investors were pretty reluctant to consider alternatives.

Today, investors are far better informed – particularly about fees – and they are becoming far less likely to stick with a lacklustre relationship when they can easily find well-matched alternatives.

Get a better deal for your money

Many people suspect they could be getting stronger returns, better-value fees or higher-quality service with another provider and, in our experience, they are very often right. It might even be that you simply feel a pair of fresh eyes could help you see where your money could be working harder. Again, this “refresh” is very often just what was needed.

Many people suspect they could be getting stronger returns, better-value fees or higher-quality service with another provider and, in our experience, they are very often right

If you are in either situation, you have everything to gain and nothing to lose by exploring your options through our fast and free matching service. Alternatively, if you would like our expert team to talk you through how today’s leading wealth managers are treating their valued clients – and what they could do for you – please don’t hesitate to get in touch.

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