|Michael Zeuner Warns Investors About Their Advisors’ Sales Agendas
Clients seeking advice from their advisors are often unaware of potential conflicts of interest stemming from their advisor’s compensation model, which incentivizes the advisor to sell them certain products and services.
“This problem doesn’t just apply to UHNW families - lack of transparency and conflicts of interest are widespread issues in the financial industry as a whole. When clients seeking advice are instead sold products or services, it can be difficult to tell the difference. They trust their advisors but typically are unaware of how their advisor is compensated,” said Michael Zeuner.
|Michael Zeuner featured in the Wall Street Journal commenting on Transparent Business models
In the article, Michael discusses what he sees as a major problem the wealth management industry – in many cases (some might say the majority of cases) clients do not have a clear understanding of how their advisor or financial services providers are compensated. This has many implications, but the most critical is that if you do not know how they’re paid, how can you know whose interests they represent?<br>
|Cut Through the Clutter! (Part 2)
In the first white paper of this series, we introduced a framework for wealthy families to use to cut through marketing clutter that makes different wealth management firms look and sound alike. We also introduced the fundamental differences between three main kinds of advisors: manufacturers and distributors (i.e., those firms which provide or sell financial products and services); and independent, fee-only fiduciaries (i.e., those firms that help families select and purchase a mix of products and services but also have a fiduciary obligation to place the clients’ interests ahead of their own).
In this paper, we take a step further to help families differentiate between the various kinds of wealth management firms, and also to understand the practical implications of working with each of the three main types of advisors. Our objective is not to recommend one type over another, but rather to help families understand the business model and interests of each type so that their choice of which firm or firms to work with is an informed one.
|Cut Through the Clutter! (Part 1)
Open architecture. Conflict-free. Same side of the table. Fee-only. Profound concepts for wealth management, and in recent years, featured in everything from white papers to advertising to legislation. How is a family supposed to cut through the market noise and know with certainty what kind of adviser they are really working with? Or what kind of adviser they actually need?