Julius Baer is a global wealth manager. There are many similar firms that operate throughout the UK and internationally. They all have similar websites and say broadly the same things. Here is one thing Julius Baer says “The products and services offered depend on the domicile of the client and the legal entity of Julius Baer.”
What does that mean? At first sight, the focus is on your tax jurisdiction. But actually, the important words are “products and services offered “
In essence, Julius Baer offers both products and services. What is the difference between products and services?
A product can be a fund. For example, the Julius Baer Multi-Manager Fixed Income. A service might be portfolio construction.
If you are a potential client, are you looking for a firm that will focus on your best interest? Most will say yes. Yet whilst national and international institutions want to look after you but they also want to sell you products. This must inevitably lead to bias.
If a firm is selling products, I imagine as an investor you want a product to be the best possible option. You certainly don’t ask for the poorest-performing or average-performing product. You’ll want a fund that is outperforming. Perhaps the product offered is outperforming. But with so many competing firms selling similar products, is it possible one firm is always outperforming? Unlikely.
Could you, therefore, conclude that selling you investment products has a bias in favour of the firm? It seems likely that selling their own products is more profitable. Otherwise, why bother?
Thankfully, I’m not picking on Julius Baer, but all similar firms. There are plenty of them saying and selling the same things.
The rhetoric on these firms web sites is excellent. But they only really explain what they want to explain. It is up to investors to ask better questions about the firms they employ. Can you through the marketing hype?
We suggest using service-only wealth management. It makes sense when you ask the right questions.