Know when it’s
time to change
wealth manager

Wealth management is about long-term relationships, but clients should know the time for a change if they aren’t 100% happy explains Wendy Spires.

A large proportion of the affluent individuals who visit findaWEALTHMANAGER.com are looking for professional wealth management advice for the first time. Others, however, currently have a wealth manager and are looking at alternatives – either to diversify their wealth or because they are unhappy with their provider and are seeking a firm which is better suited to their profile and needs.

Our conversations with clients have revealed the presence of another large group of clients, however: those who are not particularly satisfied with their current provider, but have stuck with them out of inertia, fear of the unknown or a simple desire to avoid hassle.

findaWEALTHMANAGER.com regularly conducts surveys and interview studies with high net worth individuals in the UK to find out more about their wealth management experiences and preferences, so that we can help things work better for both clients and institutions. A large part of that dialogue focuses on how affluent individuals can engage the best wealth manager for their needs and then get the utmost value out of the relationship. We often hear that clients don’t feel they are getting exactly what they want.

As one might expect, lacklustre returns figure highly on the list of client complaints. At any reputable wealth manager clients go through an extensive process to ensure that the investments selected for them are appropriate for their circumstances and capacity to take on risk, and that their return expectations are set correctly. So, while it is not usually the case that expectations and reality are wildly at odds, we regularly hear that investors feel they could be doing slightly better.

It is important to only judge a wealth manager’s investment performance after a sensible period of time has elapsed. Some say it is only possible to make a true final judgement over the duration of a whole business cycle, which is about six years, but most would agree that investors should have a good notion of a wealth manager’s prowess after a year or so. It is also important to judge returns in light of the risk profile of your individual portfolio and the prevailing investment conditions, rather than how a friend’s investments have performed, for example. They may have a very different mix of assets to you, or have a far higher tolerance for risk.

If, having carefully assessed the investments returns you are seeing against an appropriate benchmark, you still feel that your portfolio could be delivering more, then that might well be the case. You may therefore find it helpful to discuss your existing investments with another wealth manager to explore what they might do differently to secure superior returns.

Push and pull factors

But while investment returns are the name of the game in wealth management, slipping service standards and relationship issues are also of course major causes of malaise. Clients tell us that a lack of responsiveness and proactive communication are big bugbears, but the biggest of all is frequent chopping and changing of advisers. This is something which all good wealth managers will do their best to prevent but which nonetheless can be common, particularly given the amount of M&A activity seen in the sector recently. Often, the departure of their regular adviser is the event which prompts our users to seek other options. But there is no need to wait for a natural break to emerge if you feel that you could get more out of a relationship with another institution.

Rising fees, declining service standards and sub-par returns are all push factors which can inspire disaffected clients to change firms. Yet there are also powerful pulls which may prompt a move to a new provider. It may be that a client has outgrown their current firm and now needs one with more extensive capabilities around financial planning or broader investment expertise. Alternatively, more practical factors could prevail. It may be that a wealth manager has established a regional presence which would make working with a new firm more convenient; equally, you may hear of a very tech-focused institution which appeals because you want to go paper-free and be able to access your portfolio via a smartphone or tablet. Myriad factor may be at play.

The point with all this is that wealth management is a premium service for which clients are paying a premium, so therefore they should not put up with a relationship which is not going as well as it might. There are lots of options available and the process of finding a wealth manager better suited to your needs is actually very simple using our unique matching methodology. Furthermore, the process of swapping firms may be a lot easier than expected and your new provider will of course make every effort to smooth the way.

There is little sense in changing wealth manager without due cause and you should try to flag up any issues so that the institution has a chance to make things better before making a change. However, there will always be instances when the fit between the client and wealth manager just isn’t right anymore and it is time for the investor to move on. Rest assured that there will be a variety of options out there, whatever your requirements.

Exploring your wealth management options via findaWEALTHMANAGER.com is easy; simply try our smart online tool and the best-matched firms will come to you. Alternatively, you can direct your questions to our experienced, independent team by clicking here

 

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