Is a wealth manager worth it?

What you need to know

‘Price is what you pay, value is what you get.’
- Investor Warren Buffett

We all like to achieve good value for money, but it's particularly important when choosing a wealth manager.

You are entrusting someone with you and your family's financial future, so you need to be confident they can preserve and grow your wealth in line with your long-term goals.

If the fees charged by a manager are too high they could eat into your overall returns, but pursuing the cheapest option could also have a negative impact if investment performance is below par. Over time, each of these factors can have a significant impact on your overall wealth.

It can be hard to compare fees, so in this article we discuss how to approach conversations with wealth managers, and how to achieve value for money.

Understanding fees

Wealth management fees can be complex and confusing. The annual management fee is typically the headline figure, but it may not include everything.

Additional costs and charges may be applicable, such as:

• Third-party fund manager fees
• Transaction fees
• Broker fees
• Taxes

To provide clarity around costs the financial regulator, the Financial Conduct Authority, has launched Consumer Duty rules which require financial services firms to be more transparent and justify how much they are charging clients.

Having a good understanding of what fees are common and the different fee structures that a wealth manager may use should help you make more informed decisions.

We recommend asking for a wealth manager's total costs rather than their annual management fee. This will give you a more accurate figure to compare between different firms.

Also, be aware of any entry fees or exit penalties when choosing a wealth manager, as high or punitive charges could change the attractiveness of a particular firm.

Compare apples with apples

Knowing what fees you must pay and how much they will cost may give you a better idea of which wealth managers are better value for money. However, in keeping with Warren Buffett’s words of wisdom, this doesn't necessarily mean you should go for the cheapest option.

Some firms may charge lower fees than their peers, but do they provide the same level of service? In other words, are you comparing like for like?

For example, the fees for passive management – in which your portfolio mirrors an index, such as a stock market – are usually lower than with active management, where portfolio managers use in-depth research and analysis to choose investments on your behalf.

Lower fees are undoubtedly attractive when times are good. But during periods of market turbulence, when human emotions often take over, it can be reassuring for clients to have an experienced investment team and trusted advisers at the helm to navigate challenging investment seas.

Understanding what services you may need both now and in the future can help you compare apples with apples. This should give you a better idea of which investment approaches you prefer, as well as which wealth manager is the right fit for you.

The whole package

We don't deny that portfolio performance is important for achieving your financial goals – and at Rothschild & Co Wealth Management, we are proud of our track record in this regard.

But for wealth managers, the aim isn't simply to maximise investment returns. Instead, a wealth manager takes a more holistic view of you and your family's wealth. This involves helping define your long-term financial and lifestyle objectives, as well as developing a plan to help you achieve them.

Because preserving your wealth is always a priority, we also work closely with our clients to prepare future generations for the legacy they are set to inherit. And we hope to do the same for their children, and their children's children.

Wealth managers can also act as a sounding board for ideas, as well as offering advice about your finances and lending options.

We have delivered strong investment performance for our clients while carefully managing risk, ranking top quartile for performance amongst our peers by the leading independent industry consultant over three, five, ten and 20 years, to December 2023.

However, we don't pretend to be all things to all people. We prefer to concentrate on doing a few things really well. So if something falls outside of our specific areas of expertise, we gladly put our clients in touch with trusted contacts from across our extensive network who are best positioned to help them.

Find a firm that puts you first

Many companies claim to put their clients first, but how many walk the walk?

At Rothschild & Co, we invest alongside our clients, so we experience the good times and the bad times alongside you. That means when we invest, you can trust that our interests are fully aligned with yours.

With regards to fees, we aim to make our charges transparent and easy to understand. For greater transparency, all our performance data are quoted net of fees.

Our advisers also do not receive bonuses or commission tied to selling certain 'products' or for making introductions to contacts within our network. This avoids conflicts of interest that could otherwise influence our advice.

Ultimately, we strive to embed a culture of service throughout the business that puts our clients at the centre of everything we do.

We pride ourselves on our exceptional client service that helps drive industry-leading levels of client satisfaction. Every two years we conduct an independent survey of our clients to help maintain our focus on client service and satisfaction. Our latest survey, carried out by market research firm Savanta, found that 94% of clients described themselves as satisfied with their service from Rothschild & Co Wealth Management.

It's important to us that our clients feel comfortable picking up the phone and telling us what they need, whatever that may be as it’s in these day-to-day interactions where we believe the true value of a wealth manager really shines through.

^{Past performance is not a guide to future performance and nothing in this article constitutes advice. Although the information and data herein are obtained from sources believed to be reliable, no representation or warranty, expressed or implied, is or will be made and, save in the case of fraud, no responsibility or liability is or will be accepted by Rothschild & Co Wealth Management UK Limited as to or in relation to the fairness, accuracy or completeness of this document or the information forming the basis of this document or for any reliance placed on this document by any person whatsoever. In particular, no representation or warranty is given as to the achievement or reasonableness of any future projections, targets, estimates or forecasts contained in this document. Furthermore, all opinions and data used in this document are subject to change without prior notice.}