Raising standards in wealth management
Ultra-high net worths have not been served well by some parts of the wealth management industry, and that needs to change, says Wael Al-Nahedh, CEO, Spearvest
For ultra-high net worth (UHNW) individuals, choosing the right wealth management partner can be a complex process, with many key factors for consideration. Whilst on the one hand the ability for a provider to successfully preserve and grow capital is a key performance indicator, there are also many other factors to be taken into consideration.
Following a tidal wave of global political uncertainty alongside fresh public scrutiny of how and where capital is invested, the importance of a provider that upholds the highest standards of practice is paramount. Against the backdrop of a wave of new industries, rapidly emerging markets and a digital revolution, there are more options on the table than ever before. What is key is choosing a wealth manager who can advise on selecting the suitable investment strategy objectively, with aligned interests and above all – trust.
There is also a new wave of regulations to comply with, an ever-rising need for thorough due diligence which must be carried out and the constant need for risk management.
We founded Spearvest to offer a fresh approach to wealth management services. There are no internal incentive schemes to cloud our judgement, we focus our ability on delivering value for clients, whatever their circumstances or experience in investment practices.
This approach will be encouraging for UHNW individuals, many of whom are waking up to the fact that established providers aren’t necessarily putting their needs first. The outdated culture of excessive fees and questionable internal incentive schemes risks undermining the essence of the industry.
There are many other reasons why the wealth management industry has to change. A new generation of UHNW individuals and entrepreneurs are seeking partners to manage and grow their wealth, bringing with them different values and concerns. To ensure Spearvest meets these high standards, we have pledged 5% of our annual net profits to charitable causes, meaning that those who work with us can be certain they have a partner that gives something back.
This new generation, also values advisors with aligned interests. That is why we provide a co-investment model, allowing Spearvest to partner with its clients on investments such as property deals to ensure a mutually beneficial and fruitful collaboration.
A wealth manager should also invest the right amount of time into each of its clients. As mentioned previously, each investment opportunity nowadays must be extensively assessed with reasonable due diligence, expertise and insight. Whether it’s a new Markets in Financial Instruments Directive (MiFID) or Money Laundering Directive (MLD), the landscape and language of the investment world is always changing, and it is important that a wealth manager keeps an ear to the ground and advises their clients accordingly.
However, good practice and a change in attitude isn’t enough to instantly regain the trust of clients. The wealth management industry requires urgent reform and true accountability of its actions. We also know that clients are keen for us to demonstrate more transparency, and a desire to match the ethical expectations of clients, regulators and shareholders.
Similarly, wealth management firms which have not already, should consider introducing technology into its service, allowing clients the opportunity to view the status and performance of their investment portfolios in real-time with detailed analytics. This creates a truly holistic, transparent wealth management experience, where UHNW individuals can rest assured that their assets are not just pieces on a playing board for the benefit of wealth and asset managers but the result of independent thinking, real collaboration and unbiased advice.