Imagine you approach a national wealth manager. The odds are they are not independent. Thousands of investors don’t seem to care about independence. Why is that? These firms explain that they have an investment universe that has been selected from thousands of companies and funds. In fact, the range of options is significant. On that basis, an independent adviser might have access to more funds but in reality, they will limit the funds they use. The wealth manager is implying, there is no benefit in being independent.
I have to agree.
Some firms are independent but their business model is the same as the national wealth managers. They focus on persuading you to invest your money with them…to add your assets onto a platform..and then charge a % fee for managing your money. If this is what you want, I would argue independence does not really matter.
A better question is why are you independent?
The reason we are independent is we act for you and are paid by you. The wealth manager, who is not independent, represents the company they work for. Their objective is to sell investment choices and to charge based on the money you invest. In other words, irrespective of their rhetoric, any advice leads to you being sold investments by that firm.
When investors have clarity over the meaning of independence and are given the choice, they will always say yes to independence. Obviously.
The objective of national wealth managers is to use whatever marketing and selling skills they have at their disposal to persuade clients to join them. That is business. It is up to the end-user, the consumer, to have clarity over the proposition being recommended to them. If the consumer does not fully question the bias that exists, there is no responsibility on the wealth manager to phrase words in such a way it may not be able to sell its goods and services. The national wealth manager will not give reasons NOT to use them…it’s up to you to be curious enough to find the answers.