There is a huge disparity between private
clients’ and wealth managers’ views on transparency in the
industry, according to research.
When asked whether the wealth management
industry was transparent, 100 percent of clients answered “no”,
while 100 percent of wealth managers said “yes”.
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The result shows that what clients want in
terms of transparency and what they receive, according to the
report, are two different things.
“What clients want is openness,” said the
report, conducted by consultancy Scorpio Partnership on behalf of
SEI.
“Not just with transactions, performance and
charges, but more broadly how and why decisions in the portfolio
have been made, on what basis and how they fit in with client
goals.”
Clients identified several themes which should
be at the heart of their relationship with a wealth manager:
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By GlobalData• Open communication about the financial
markets and the client’s portfolio;
• A written summary on quarterly activity that
provides headline information on what has been done relative to the
client’s objectives;
• Sharing relevant market and product
information;
• Being able to access real-time information
about the portfolio when you want, how you want; and
• A simple, transparent charging structure
with no hidden extras, and a frank ongoing dialogue about what is
being charged and how it connects to value delivered.
There were also disparities between client
expectations in other areas. Portfolio reporting was considered a
high priority by clients but less important by the industry.
The desire for knowledge and client education
between clients and wealth managers were closely matched, but
clients placed less importance on available products and fee
structures than the industry.
The research is part of a series of papers on
the changing relationship between clients and their wealth
managers. It was a survey of 25 private clients and 25 wealth
managers.
It is the latest research by Scorpio
Partnership following its work earlier this year on Futurewealth
and asset allocation.
