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More than a People Business – The Values That Should Underpin Wealth Management

The expression “this is a people business” has become something of a mantra within the financial services industry. You’ll hear it skip from the lips of relationship managers working for high street banks. Spend any time talking to Venture Capitalists and they’ll probably tell you that any decision to invest in a company is driven by “people” and relationships. And it’s certainly true that in the wealth management sector, the “people business” concept has a special resonance. A wealth manager might be talking to a client about “goal-based investment” or “asset allocation” but unless there is some kind of empathy or connection at a personal level, the professional relationship is unlikely to flourish.  

While wealth management is, undoubtedly, a people-oriented business, a successful working relationship between an advisor and his or her client requires much more than an easy chemistry to between the parties. The relationship side is important because helping a client achieve financial and life goals requires a holistic understanding of the individual, both in financial and personal terms. The two parties don’t have to be best friends – that’s not the nature of the relationship – but there does have to be a genuine meeting of minds when important financial issues are being discussed.  

So yes, it’s “a people business.” But only up to a point. A successful working relationship between wealth manager and a client is actually only an indicator that deeper and more important principles are at work. A good relationship must be underpinned by solid values, knowledge and expertise.  

But what does that mean in practice?  

The Importance of Professionalism

One of the key pillars of successful wealth management is – purely and simply – professionalism.

That should come as no surprise to anyone. In any kind of commercial or transactional relationship – whether it involves buying an expensive laptop from a specialist shop or discussing tax-effective investment strategies – we all expect a high degree of professionalism.

But what does that mean exactly? Well, clearly it is partly about knowledge and expertise. We expect a computer salesman to be able to explain why one laptop rather than another would be right for a particular purpose. We expect a wealth manager to have a thorough working knowledge of – for example – tax-friendly EIS, SEIS and VCT schemes in terms of how they work and the opportunities that are available.  

Equally important, professionalism is about the ability to take a clear and unbiased view of the needs of each and every individual client and recommend a course of action on that basis.

Casting Aside the Jargon

There is a risk that professionals – and again, this can be true in any walk of life – get a little bit caught up in their own rather enclosed world in which matters are discussed via a rich vocabulary of jargon and acronym. This can spill over into the client relationship. Perhaps the professional assumes that the client will be up to speed with the latest terminology or market trends. Or perhaps the use of expert jargon keeps the advisor in control of the situation. Either way, it’s a bad thing.

A successful wealth management relationship should be jargon free, with all concepts explained in terms that clients will understand. That doesn’t mean talking down. It is a matter of being straightforward and clear in all things. As such, it is a cornerstone of trust.

A Progressive Approach

The world of financial services is changing rapidly. That’s true at the level of a high street bank and its true for wealth managers and private banks.

It’s not simply that new products are coming on stream. Customers are changing too. High Net Worth millennials are now an important part of the wealth management client base, and they, arguably have a different set of values and expectations from their parents or grandparents. The differences can be seen not only in terms of their investment strategy but also the nature of their relationship with advisors and the expectation that technology will play a greater part in helping them to manage their finances.

Investment concepts are changing too. For instance, what we in the industry are seeing today is a shift towards goal-based investment. Essentially, rather than starting a conversation by talking about appetite for risk and the income/growth balance, a goal-based approach will take the life objectives of the investor as the starting point. The financial plan will be mapped onto the all-important life goals.  

Meanwhile, new types of investment are coming on stream.  Witness the rise of the private debt market, which is now much more accessible to High Net Worth individuals.

These are trends that progressive wealth managers should be factoring in.

The Personal Relationship

None of this is to say the personal relationship between wealth manager and client isn’t important. The ability of the wealth manager to take a genuine interest in the aspirations of the client and translate that interest into sound advice is vital.  

The Trust Factor

Crucially, all of these elements – professionalism, straightforward communication, a focus on the individual and a willingness to embrace change –  feed through to what is arguably the most important pillar of all: Trust between the wealth manager and client.

The Route – City wealth club seeks to put all these pillars at the heart of its offering to Members. It’s a genuinely bespoke service, based on the principles of goal-based investment, with two financial reviews every year to ensure objectives are aligned with an investment strategy. And in addition to a full range of investment products, The Route offers its innovative Private Debt Platform to all qualifying members, providing a means to lend directly to entrepreneurs and developers. Tax advice and estate planning is also part of the mix.

To find out more about Membership, please call: 020 3141 9040


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