In the US, Charles Schwab CEO Walt Bettinger said” Personalized investing is coming at all of us like a freight train,” At the Schwab Impact conference, he told viewers: “The idea that I’m going to take my money and simply turn it over to some fund or an ETF and just trust that that manager or maybe trust that that index is going to invest the way I want” is no longer realistic.
“I won’t go so far as to say those days are gone … but they’re going to be challenged because technology is bringing the opportunity for personalization to everyone: to large investors, to medium investors, small investors and the whole range of RIAs also,” he explained.
“The RIA is positioned incredibly well for the future… for high-net worth and ultra-high-net worth clients, particularly those with complex needs.”
What relevance has this for the UK?
In the USA a Registered Investment Advisor (RIA) is a type of financial company that provides its clients with financial advice. RIAs are a class of advisors who have a fiduciary duty to act in your financial best interest.
In the UK, the majority of wealth managers selling their services to you are NOT independent. There is NO fiduciary duty to act in your financial best interest. Yet, people seem comfortable buying from these institutions. Why is that the case? The answer is that investors haven’t really appreciated what good independent advice looks like. Instead, the story sold to investors by wealth managers is product-based. They tell the story that not only do they have access to most funds, but they also narrow down funds so investors don’t need to. They sell the story of cherry-picking the best funds out of all the funds available. That sounds no different from what IFAs can do. Yet, that’s not what good independent advice looks like. If you believe your interest should come first, which only IFAs can do, then why would you buy from the wealth managers selling their products?
The US experience shows ‘Personalized Investing ‘Coming at Us Like a Freight Train’ In other words, independent advice is coming to you like a freight train.
In fact, why would anyone not want someone acting in your best interests?
If you asked yourself, would I want to work with someone that acts in my best interests? The answer would be an unequivocal YES.