Since emerging around a decade ago, the term ‘Wealth Management’ has become a sort of default moniker for a wide range of financial services and offerings, similar to ‘climate change’, ‘fat-reduced’, and ‘social networking’. The term has been used (and abused) by many commentating on our industry, often as if it described what all financial services professionals do for a living.
I believe financial planners desperately need a better moniker.
Unfortunately, in the eyes of most consumers, commentators and even industry participants, the core proposition of ‘wealth management’ has come to represent the endless and often circular chasing of better financial returns.
Wealth management is much more than getting the best financial returns and buying services at the cheapest possible price.
Despite the similar amounts of money being spent on financial products, they aren’t like the cars or houses people buy because they don’t depreciate according to use. Instead, financial products depreciate according to the known and unknown changes in our lives, and according to the unseen influences of legislation, markets, and a hectic product development production line which is hurried along by smart actuaries cramming more profits from better products.
The core promise of wealth management should be the delivery of greater financial certainty, rather than purchasing today’s cheapest or best performing products. Purchasing well-performing products at competitive pricing is very important, but only in the context that the prices paid and products delivered provide purchasers with greater certainty in their financial lives.
In following instalments of this series of articles, we’ll discuss: