Wealth
Management

Wealth management is a term used widely in the financial services industry, however, it is often misunderstood or misinterpreted. Wealth Management is not limited to financial planning, asset management or investment advice, it is the holistic practice of overseeing and directing an entities wealth, be that of an individual, family or an institution.

There are a few perceptions that should be addressed for the client/advisor relationship to succeed.

BIAS

It is essential to keep an open mind and embrace many sources of information in order to maintain flexibility throughout the decision making process.

Unbiased advice is hard to find yet invaluable to any meaningful advisory relationship.

JUDGEMENT

A few of the most common reasons wealth is eroded or mismanaged are overconfidence, unconscious bias and herd mentality.

As Gandhi once said,“It’s better to walk alone than with a crowd in the wrong direction.”

BEST PRACTICE

Clients need to know that their interests are being served by competent and caring individuals.

In order to ensure the motives behind any professional relationship are not self-serving, the relationship needs to be collaborative, transparent and focused on the identified needs and agreed goals.

Advisory vs. Discretionary

Before you decide, there are some considerations to note.

Many things need to be considered when engaging a Wealth Manager to oversee your investment portfolio. One of the most important factors is, will you be looking at an Advisory or a Discretionary mandate? The difference between an advisory and a discretionary mandate essentially lies in the final decision-making process.

In an advisory structure, an investment professional or Relationship Manager discusses questions you may have pertaining to investments and provides suggestions to enable you to make the final decision.

Investment
Knowledge

Do you take an interest in financial news, asset management and follow investment markets in general? If so, an advisory mandate could be a good choice. On the other hand if you have limited knowledge of the investment spectrum, or need something more bespoke, likely a discretionary mandate will be more suitable.

Time
Allocation

If you are willing to set aside time to speak with your investment manager to receive advice and reports regarding your portfolio then an advisory structure is more apt. If you prefer to have things done for you without much hassle, then a discretionary structure is more relevant.

Reachability

Considering a point of time when the financial market fluctuates and concerns your investments, will you be reachable? If so, then an advisory mandate works. However, if you travel very often and have endless meetings due to the nature of your job, then a discretionary mandate could work more in your favour.

As for a discretionary structure, once the mandate has been agreed a portfolio manager sees to the management of your portfolio and makes investment decisions on your behalf.