Rising stock markets, soaring property prices and strong economic growth, not to mention jaw dropping bonuses paid out by thriving investment banks, have all helped fuel an explosion in the number of millionaires in the UK. There are now almost 500,000 people with $1m (£492,000) of capital, not including their homes, according to the latest World Wealth Report from Capgemini and Merrill Lynch.
With so much money swilling around, it’s not surprising that more and more private wealth managers are looking to provide a home for it.
What are private wealth managers?
Wealth managers are exactly what they say they are – they look after your wealth, and the more of it the better. They offer banking services, investment management and, in many cases, tax and legal advice. For most clients, wealth creation, or at the very least wealth preservation, is the key, so investment expertise is crucial, and particularly so with the proliferation of financial instruments offering so many new opportunities. With the growth of hedge funds, private equity, alternative investments such as art and wine, structured products and derivatives, good investment managers need to be fully aware of all the options available. Many from the more traditional old school may not be.
This is why more and more firms are using what they like to call ‘open architecture’, which effectively means using the best specialist fund managers in the market, regardless of where they work. This ‘best of breed’ approach is eminently sensible, as no single private bank or even investment house can claim to have expertise in all markets; but you need to make sure this is not used simply as an excuse for another layer of charges. And remember that you can always choose your own funds and save yourself a lot of money in charges (see page x). Bespoke portfolios of individual equities, bonds and gilts is where these managers can really justify their fees.
Personal servicing
No matter what the speciality of any individual bank, the most important thing is that it provides a service that is tailored to your individual needs. After all, this is what you are paying for.
This is the very essence of any private client service and means, at the very least, investing your money depending on the precise levels of risk that you are willing to accept, the level of income you need, and even your moral or ethical views. All these factors vary over time, and from one person to the next, so any wealth manager must have the knowledge, experience and resources to provide such a service. They must also offer instant access to someone who knows your circumstances intimately.
Many pride themselves on exclusivity, and this does not sit comfortably with any form of marketing, let alone advertising campaigns. Information, therefore, can be hard to come by. This can make finding the right manager rather difficult. Only once you have decided what exactly you want, and, therefore, what you are looking for, can you begin your search. Tru-Est offers an online service (www.pamonline.co.uk) that allows you to enter your specific requirements to obtain a list of the most appropriate managers for your needs. It also publishes the PAM Directory, so make sure you take advantage of our special offer below. Ultimately, however, simple word of mouth and personal recommendation remain by far the most reliable and popular way for any wealthy individual to find the perfect match.
