02...02 insider’s guide to wealth management a value checklist to help you choose or review your...

02I N S I D E R ’ S G U I D E T O W E A L T H M A N A G E M E N T

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02Insider’s Guide to Wealth Management

A value checklist to help you choose or review your Wealth ManagerThe term ‘Wealth Manager’ incorporates a diverse range of advisers, including Financial Advisers, Asset Managers, Private Bankers and Stockbrokers.

This guide is designed to help you navigate some of the potential pitfalls when deciding to appoint or review a Wealth Manager.

The UK wealth management industry plays a vital role in delivering financial services to individuals and trustees. Wealth management firms provide a range of services, including financial planning, investment advice, investment management and stockbroking. According to the FCA, the industry manages over 1.8 million portfolios for customers in the UK and has over £600 billion of their assets under management(*)

With a complex legislative backdrop, combined with challenging financial markets and the introduction of new technologies, it has never been more important to work with the right Wealth Manager. In such an environment, many people who would normally do it themselves are also employing a Wealth Manager because of the added value they can, but do not always, provide.

With over 30 years of experience in the Wealth Advice Sector, here are some of the insights on the market, including 8 essential questions to ask, to ensure you end up with the right adviser.

If you have any comments, questions or feedback then we would be delighted to hear from you. You can email us at [email protected] or call us on 0333 323 9060.

Best wishes,

* FCA report on Wealth management firms and private banks: suitability of investment portfolios (December 2015)

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Stuart PhillipsCHIEF EXECUTIVE THE PRIVATE OFFICE

Alistair CallanderCHIEF EXECUTIVE THE PRIVATE OFFICE

We have looked at the market and spoken to Wealth Managers to get the inside track and here are the results...

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Eight...4 Insider’s Guide to Wealth Management

Eight essential questions you should be asking either your existing or your prospective Wealth Manager, to make sure that you get the best value from them.


Ask yourself first: Am I investing in markets because I need to or because my Wealth Manager wants me to?

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Do you need to invest in markets or risk assets? If you can achieve your goals without taking risk, why take it? Investing in cash deposits might be the answer. Does your Wealth Manager really understand what you are trying to achieve and can they advise on cash, for example through a cash management service?

Did you know that the most typical method of charging amongst Wealth Managers is still to derive their income based on the value of investment assets which, in many cases, may not be appropriate.

Do you even need a Wealth Manager?

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Ask yourself: Why is my money invested and what is it there to do for me?

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02Insider’s Guide to Wealth Management

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Do they provide investment management only, investment management first with financial planning second or financial planning first with investment advice only if appropriate?

Following recent legislative changes, navigating a more flexible investment and retirement world, where more investment freedoms lead to increasing complications, the impact of getting it wrong has never been greater.

Are they just selling you products or is it true financial planning?

Therefore it is imperative that you get independent financial planning advice, before deciding your investment strategy.

What services are they providing to you?

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Does my Wealth Manager give truly independent and impartial financial advice before telling me how to invest?



03

A frighteningly large number of Wealth Managers only offer focused or restricted advice.

To reach the most appropriate outcomes, you may prefer a WM who can guide you based on analysis of a sufficiently diverse range of the relevant product solutions available on the market - only a completely independent financial adviser can truly deliver this.

A restricted adviser may be constrained by product, provider or solution, and by definition will face some limitations in the scope of advice or service they can offer.

After all, if your adviser can’t put every option on the table in the first place, how do you know that you are consistently being given the most suitable solution for your needs?

How impartial are the solutions?

If your adviser can’t put every option on the table in the first place, how do you know that you are being given the most suitable solution for your needs?


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Can you see what you are paying in pounds and pence?

Too many clients cannot clearly see the total fees that they pay their Wealth Manager and often there are ‘hidden’ costs such as custody, product, underlying manager and transaction fees. These are all paid for by you.

Do you know what you are paying your Wealth Manager in total?

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Ask to see your total fees in pounds and pence and remember to check for ‘hidden’ costs. Ask for your Ongoing Charge Figure


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This is about pounds and pence again. Percentages are a hangover from the days of commission.

Should someone who has £2m of wealth under management really pay twice as much as someone with £1m?

Is the job twice as hard or does it take twice as long? Most probably not.

The pitfalls of percentages


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Ask your Wealth Manager if they will structure their services on a fixed fee basis.

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Can anyone provide bespoke advice and service anymore?

I am a name, not a number!

Remember the days of the local bank manager? The days when someone actually knew your circumstances, you trusted them and respected their knowledge?

Many organisations have grown to such a size that personalised service can no longer be efficiently provided, due to a drive for standardisation.

Not everyone is a balanced risk investor or wants to be invested in a model portfolio. Some people wish to be seen once a year but others wish to be seen more regularly.

Are you getting advice from a team and not just an individual? Small things missed can lead to big problems.

Will your Wealth Manager tailor their services and advice to you and your family?


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Life goals are rarely to outperform a specific market benchmark.

This type of benchmark might be useful to tell you how your investment has performed relative to other investments or a market, but it probably says little about how on track or otherwise you are to meet your unique personal ambitions.

Advisers could use cash flow forecasting to create a personal benchmark , i.e. income and capital requirements and time horizons, linking this to your specific objectives and then regularly measure your position against your previously set personal benchmark. This can be often referred to as Lifetime cash flow analysis.

How should success be measured?


Will your Wealth Manager create a personalised benchmark for you?


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Life happens and your situation will evolve.

Your requirements as you head into your spending phase of life will be very different from your growth phase. You may have surplus wealth and wish to spend more or passing on and protecting your wealth may be more attractive. Pension and investment funds acquired may need to be spent.

Does the way you pay your Wealth Manager allow for your evolving circumstances?

Is your adviser’s income contingent on you investing money into risk-based assets?

If your adviser is remunerated on the basis of keeping funds under management, there may be a fundamental conflict of interest.

Does your wealth management evolve with your situation?


How will your Wealth Manager’s services and charges adapt to changes in your lifestyle?


If you have any comments, questions or feedback then we would be delighted to hear from you. You can email us at [email protected] or call us on 0333 323 9060.


The Private Office and TPO are trading names of The Private Office Limited, authorised and regulated by the Financial Conduct Authority, firm reference number 789482. Registered in England and Wales at 2 The Bourse, Leeds LS1 5DE, company number 10226899.

The Financial Conduct Authority does not regulate tax advice or Trusts.

The entry may be checked on the Financial Services Register by visiting www.fca.org.uk/register.

The value of your investments can go down as well as up, so you could get back less than you invested.

© 2019 The Private Office.

04/2019 FP: 031916

Leeds | London | Bath

Head Office

No 2 The Bourse, Leeds LS1 5DE

T: 0333 323 9060E: [email protected]: theprivateoffice.com

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