What is there to be re-imagined in the wealth management industry ?
Would love to get feedback and feel free to add if I have missed any important aspect .
1. Re-imagine the structure:
Make it wealth-manager centric (bottom-up) from the present top-down system. I am a firm believer in the adage employee-first, customer-second* and if there is one industry where this applies to the hilt, it is the wealth industry.
2. Re-imagine the role of wealth managers:
Presently they function as agents of the firm (they work with) whereas they ought to be agents of their customers. As their primary role/responsibility is to help their customers take ownership of their financial futures. The firm plays a supporting role in helping them discharge their responsibility.
3. Re-imagine the importance of asset allocation:
While all the marketing decks actually say that it is all about the customer’s asset allocation**, this statement needs to be pulled out of these decks and put into practice. Presently it is all about schemes and markets, with scant attention being given to the process of arriving at the asset allocation.
4. Re-imagine the semantics:
Semantics matters, at-least in the wealth industry.
4a) A person who earns by way of commissions from the schemes he pitches to a customer, cannot call himself a wealth manager. Now, the law is also very clear about this – they are distributors of investment products. Period.
4b) This is trickier: A person who earns by way of fee from the client, but the firm he represents is forever churning out in-house schemes***, needs to declare – that he is an “advisor albeit conflicted”.
The raison d’etre of a wealth manager leaves very little scope for conflict of interest. And if there is a conflict, it ought to be stated upfront in BOLD.
