Managing wealth: A new approach in the U.K

In this article, I investigate how well the investment management community serves 'mid-worth' individuals. I begin by defining and analyzing the new phenomenon of 'mid-worth' individuals – the rapid growth in the number of people with significant liquid assets available for investment. I investigate just how well the most common investment products serve these individuals. I find that most individuals are so poorly served and that the result is seriously damaging to their longterm financial health. I find that the main reason for this is a lack of understanding of the relationship between risk and return, and what can only be described as a conspiracy of 'mystification', resulting in customers standing even less chance of understanding the risk-return relationship. The consequence of this is that investors end up paying far too much for 'heavily packaged' investment products and as a result find themselves in a situation where they have much less money available to them when they need it most — in old age. In addition, I review a new approach to low-cost wealth management that has been introduced into the U.K. market by Close Wealth Management (CWM) and other companies, which is likely to produce much better returns over the long term for most investors. I investigate some of the issues involved in managing financial services customers, and use QCi’s Customer Management Assessment Tool to assess Close Wealth Management. The conclusion is that Close Wealth Management has made a classic start, with a very strong focus on a customer-friendly proposition, and strongly targeted marketing. However, if it is to remain true to its charter of offering very good returns combined with excellent service, Close Wealth Management’s service processes will need to be tightened up as its customer base grows.