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Chris Budd

Wealth Management - What's In A Name?

There are many reasons why we give things names. One, for example, is so that everyone knows what we are referring to. Take the word ‘table’. Most people would probably think of four legs and a top upon which we could put a cup.

Another reason for giving things names can be to make other people think the object is something it is not. Suppose I put a table cloth on a rock and put a cup on top. Would that rock now be a table? Yes, if I call it a table.

This is one application of marketing.

Something similar has been happening in financial services. Wealth Management is a great name. It conjures up images of people managing wealth. But what does it actually mean?

The term originated in America. Wikipedia defines wealth management as an investment-advisory discipline, linking the investment needs of a client to the investment expertise of the company. It meant a firm with discretionary investment authority (Wikipedia ranks the world’s largest firms by size of funds under management, not turnover or profit or number of advisory staff). There is little suggestion of planning or personal financial advice.

And yet the term has been co-opted in the UK to describe a variety of services. We recently came across a client who was being courted by a Wealth Management firm from central London. The firm had expensive offices and a large entertainment budget. They talked about personal service and understanding their client. I think the word ‘holistic’ may even have been used at some point. They turned out to be a Discretionary Fund Manager. There was no financial planning service.

This firm was probably true to the label Wealth Manager, but they had blurred the definition by giving the impression of a more rounded, IFA-type service. Some might call this good marketing.

There are now IFA practices who are adopting the term Wealth Manager. The word ‘Boutique’ is also making an appearance. In this instance marketing is being used to create the impression of a top end, personal service. In practice, these firms generally offer nothing different than Independent Financial Adviser practices which do not have the words Wealth, Manager or Boutique in their title.

But marketing happens because marketing works, and there are undoubtedly clients to whom this image appeals.

So, what next? Should all firms adopt this marketing approach? I am reminded of the Monty Python film Life Of Brian, when Brian is standing at the window in front of the masses. “You’re all different. You’re all unique.” And the masses shout back in unison “Yes, we are all different. We are all unique.”

Ovation could adopt the term Wealth Manager, but it wouldn’t actually be accurate, as we don’t only provide investment advice. Planning is at the heart of our service, as how can we run our investment portfolios unless we have real clarity over client objectives and motivations.

Take a look at the other blogs in this section which outline what we actually do, and don’t let the marketing spin fool you.

Categories: Business CoachingOvation

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