A journalist obtained a copy of a St James Place contract and sent the story out on Twitter. There was the response from St James Place partners suggesting that why should such an agreement be made public. In the tweet, I suggested they should be disclosed to their clients. That point wasn’t appreciated by St James Place partners! One said, ‘Should I ask to see an employees contract of employment’ from Supermarkets was a reply. I said no because the feedback loop by making a mistake buying the wrong cauliflower, tin of bins, deodorant..was very small. If they were bad decisions to purchase, the feedback loop was small so you could decide whether you purchased the items again. Also financially, the impact on your net worth is irrelevant.
In the world of wealth management, investing, and pensions…the feedback is long. When I say long, it’s your investable lifetime. If you employ the wrong wealth managers, stockbroker, private bank, adviser etc, and don’t find out for 40 years, you don’t get another chance to set it right.
You, therefore, need to make sure you make the right decisions today. You then have to keep checking those decisions time and time again.
Most wealth managers, stockbrokers, investment managers have a sole aim; to manage your money. That’s how they get paid. So it’s vital you understand their incentives. And a contract can reveal much an investor may not like. Simply, as many firms need to sell products to survive. And those products may not be as suitable as you think. Of course, they will always appear suitable when you buy; because the packages are made to look attractive and every salesperson looks and feels trustworthy. Clearly, some are trustworthy, others are not. But you need a system in place that can differentiate trustworthiness. If not, you may end up making a poor decision that will cost thousands, if not hundreds of thousands, over time.