We have lost our way – Section A: The ‘Wealth Management’ moniker

Since emerging close to a decade ago, the expression ‘Wealth Management’ has become a kind of default moniker for a big selection of financial services and offerings, much like ‘climate change’, ‘fat-reduced’, and ‘social networking’. The expression has been used (and abused) by a lot of commentators on our industry, at times as if it described what all financial services professionals do for a living. I believe financial planners desperately need a better moniker. Unfortunately, within the eyes of most people, commentators and even industry participants, the core proposition of ‘wealth management’ has come to represent the endless and occasionally circular chasing of increased financial returns. Wealth management is way more than having the best financial returns and acquiring solutions at the cheapest possible price. Despite the equivalent amounts of capital being invested on financial products, they aren’t like the motor vehicles or properties we purchase due to the fact they don’t depreciate according to use. Instead, financial products depreciate depending on the known and unknown changes in our lives, and according to the unseen influences of legislation, markets, and also a active product development production line that is certainly hurried along by clever actuaries cramming extra profits from better products. The core promise of wealth management need to be the delivery of greater financial certainty, as opposed to acquiring today’s least expensive or top performing products. Getting well-performing products at competitive pricing could be very important, but only from the context that the premiums paid and products delivered deliver purchasers with increased certainty in their financial lives. In up coming instalments of this series of posts, we’ll talk about: ·why product rates and performances are not enough for wealth management (part 2); ·what decent finance specialists truly do (part 3); and ·what type of new moniker the financial advice market needs (part 4).