The Barron’s cover story says it all: most wealth managers and advisors offer little value for the money because they simply don’t perform.
Best of Breed
Private bankers long have prided themselves on doing it all. They’ll help you sell a company, write a will, and find an apartment in Paris’s 6th arrondissement. In the old days, they even brought you soup in the hospital. But the banks and others firms in wealth management have reached a game-changing conclusion: When it comes to picking investments for clients, long their core service, you might be better off with someone else.
That’s because the monied have turned smart. With a sharp rise in demand by sophisticated investors for niche global investments — such as local currency-denominated emerging-market bonds — coupled with an imperious insistence that they have best-in-class managers — the likes of Bridgewater Associates’ Ray Dalio — the big wealth-management outfits have reluctantly been building out “open architecture” platforms, the trade term for offering a wide range of investment products run by outside managers. “Many banks are loath to admit that somebody can manage investments better than them — it’s a cultural thing,” says Paul Ahern, a principal at Winslow Capital Group, a national banking-consulting firm based in Penobscot, Maine. “But now they realize their proprietary disciplines are not sufficient to be competitive.”
Instead of slashing fees, they distract with sideshows such as Barclay’s Little Book of Wonders and “money camp” for 6-11 year old scions. These should be benefits that come with a Centurion Card, you know what I mean?
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Sales Training 101
Read this, and ask yourself if you might be better off with something such as our all-weather survival strategies — or someone else. But not a Market Lizard. Note the word performance is only used twice in the entire discussion, and not in a good way.
[pdf width=”100%” height=”900px”]https://s3.amazonaws.com/wc-pdf/SPDR.Discussing-Fees-with-Clients.pdf[/pdf]
Other articles mentioned in today’s discussion include:
Why Selling in May and Going Away Was a Mistake
Dividend-Paying Stocks Continue to Garner Attention
Microsoft raises dividend 15 percent
Flying on Autopilot
Risk, Part 1 & 2 (podcast)