Advisors And Wealth Firms: How Much Space Divides Them?

Ed Carey 15 November 2019


This article examines the boundaries that exist between the higher and lower ends of the wealth industry, and what that means for business models.

One of the more tricky subjects is to know what are the real differences between wealth managers advising those at the ultra-high net worth and upper reaches of the HNW spectrum, and those falling more in to the mass-affluent space? Perhaps more than some practitioners might want to admit, these areas of business have a lot in common, and, as we know, technology is commoditising some parts of the value chain, enabling developments such as mass customisation, efficiencies in data handling, and other trends. That said, it appears that even in this time of excitement (or dark fear) around the impact of tech such as artificial intelligence, there are limits and at the higher wealth levels, human contact is essential. And rising wealth does seem to involve rising complexity much of the time. The amount of labour required goes up. And that, of course, has implications for margins, fees and how one measures value for money.

To try and get a handle on some of these issues is Ed Carey, who is chief commercial officer at UK-based Multrees Investor Services, a firm working with wealth managers. The editors are pleased to share these views and invite responses. The usual disclaimers apply. Email and

The amount of clear blue water very much depends on where you look. At the top end of the wealth management space, which serves some of the wealthiest clients and families, there is almost no risk of convergence between advisor and wealth management firms. This is because an advisor firm would have to effectively transform its business in order to offer the true family office work and intergenerational management that is needed to meet the highly complex requirements of clients in this area of the market.  

However, when you start looking further down the scale, the gap between advisors and wealth managers is arguably the smallest it has ever been. Many wealth managers will have clients with assets of around £0.5-£5 million ($6.42 million) but advisors are also increasing their focus on this type of client.

So, who is more likely to end up eating whose lunch? Unlike wealth managers, advisors don’t typically specialise in some of the services and investments required by this type of client, such as direct equities, private equity or multi-currency cash management. But, clients with assets of this size are also likely to require, and value, financial planning – a core specialism of financial advice firms. By contrast, wealth managers tend to place much less emphasis on financial planning, if they offer it all.

Essentially, a firm must be able to offer clients of this size both the traditional wealth management range of services, as well as the financial planning services that IFAs provide. And one of the key components for advisors and wealth managers to achieve this balance is the flexibility of the platform services and technology they use.

By adopting a solution which lives and breathes the multi-custodian, multi-jurisdictional services in a way that the traditional, large-scale, retail platforms simply won’t, advisors can feasibly support the more complex investments required by wealthier clients.

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