Negative real interest rates, elevated equity valuations, sizeable swings in commodity prices: the challenge presented to those charged with the stewardship of others’ wealth is a considerable one, indeed.
Political decisions made half a world away or the ivory tower prejudices of the central bank academics who are empowered to create trillions of dollars of new money and who try to move currencies up and down, almost at whim, exert an extraordinary influence on both short-term asset prices and longer-term economic reality.
Financial markets themselves have become both more prone to discontinuous movements and more acutely vulnerable to the herding behaviour which has been the result of algorithmic trading on the one hand and of the predominance of ‘blind’ ETF investment on the other.
On top of this combination of heightened market risk and a lowered capacity to generate income, wealth managers also face intense competition – not least from the seductively cheap ‘passive’ approach – together with an increasingly onerous regulatory burden which brings with it ever greater operational costs.
Faced with such intense commercial pressures, it is imperative that there must be an ever-greater focus on maintaining and expanding the client base. For many, time spent away from the care of the existing client – or from the cultivation of new ones - is all too obviously time wasted, in the present environment.
How, then, to ensure that such a necessary concentration on the core tasks of the firm does not lead to a loss of understanding of the trends developing in the wider world?
How can the harassed wealth manager avail him or herself – in a cost-effective manner – of the kind of unbiased market insight, independent investment counsel, and compelling source material for both report-writing and marketing when the permanent staff of analysts and strategists who used to provide this has become an unaffordable luxury?