I’m writing this fresh out of a meeting, where I thought the person sitting opposite me wanted to speak to a Financial Planner, and she thought I was a Wealth Manager.
It’s got me thinking. I know some Advisers who wouldn’t blink at the term. Might even encourage it actually. I’ve even (until relatively recently) worked under a Company that had ‘Wealth Management’ in the title, something that bugged me every time I handed out a business card.
So it’s important to know that this isn’t necessarily a view shared across the whole Profession, It’s really just my opinion when I say that I don’t identify as a Wealth Manager in the slightest. Some might say it’s a matter of semantics but it feels like an important differentiation to me. So here’s how I would explain my job.
What is wanted from a Wealth Manager
Going back to this meeting, the individual wanted me to review her pension in isolation, (which was being managed by a Wealth Management Club), and give her alternative options to achieve a better return.
There are so many ways in which that’s not my job:
- I don’t give returns-driven Advice. My advice comes down to what an Individual wants to achieve. What are their goals? What do they need that money to do for them to provide for the future they want? What are they working towards and how can I help get them there? I’m not spending my days looking for whizzy investment opportunities to outperform the market, they are spent instead talking to my Clients about their dreams for the future and whether they are on track. To re-iterate, I’m a Planner, it’s in the title.
- Equally, my performance as a Planner isn’t rated or determined on the returns delivered by my Client’s investments. Would they be disappointed if their investments are down? Of course. But would they understand it’s short-term volatility on the road to a longer-term goal? Absolutely, it’s simply the nature of the beast.
- I can’t (and wouldn’t) give advice just on one area, in this example, pensions. Imagine this for a conversation. ‘I have some chicken. I’m not going to tell you what kind of food I like, or what other ingredients I have available, but I’d still like you to tell me the best thing to cook’. Pretty impossible to offer a good recipe, right?
I USE Wealth Managers
I outsource most of my Client’s investments to Wealth Managers (or Discretionary Fund Managers). This is because, I don’t track the market day in day out, nor am I an economic expert. It’s my job to understand risk and reward, how this sits with each of my Clients and communicate this accordingly. It’s also my job to make sure the investments being used is appropriate for them and their timeframes. I use Wealth Managers because they are experts in this field and their ultimate goal is to outperform the markets (and their peers). I regularly review the Wealth Managers I recommend and it’s my job to make sure that they keep doing THEIR job well. If they don’t, I review my use of them with Clients.
The meeting was a short one. I explained the above, we went our separate ways and if nothing else, it’s given me the opportunity to clarify my thoughts on something that’s bugged me for years.
