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One third believe independence in wealth industry is achievable


Although 73 per cent of private clients believe independence is of high or medium importance, only 32 per cent feel it is achievable in a wealth advisory relationship, according to a paper from SEI.

The paper, entitled Independence: The New Gold Standard?, is the result of a series of interviews carried out in conjunction with the Scorpio Partnership, which compare the views of 25 private clients and 25 wealth management firms.

Thirty two per cent of private clients shared the common view of independence being more of a hope than an expectation. The remaining 68 per cent believe that it is not achievable at all or through a single adviser.

Joseph P. Ujobai, executive vice president, SEI’s private banks segment, says: "Whilst it is clear from these survey results that both private clients and wealth managers put independence high on the agenda, their assumptions on how this is attained and the likelihood of achieving full independence are quite different. Interestingly, when clients were asked to compare financial services with other industries, the majority did not regard independence as a principle to which any profession can consistently adhere.

"Though previously the issues of independence and fees have been closely intertwined, the FSA is looking to introduce a clear separation between independence and adviser charging. Interestingly, our findings show that as yet advice-based fees are rarely mentioned as a way to demonstrate to clients that advisers are acting independently. Furthermore, private clients do not like paying fees, so how do you make a fully fee-based model look more appealing than a commission-based or -offset model, where costs are not as transparent?”

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