Independent Wealth Managers vs. Wirehouses

If you had the choice, would you rather shop at a boutique or a chain store?  You know what you get at a chain store: pre-packaged products on shelves that meet most of your needs but no personal service.  A boutique provides you with a lot more product selection, a high level of personal service and saves you time in meeting your needs.

The reason that so many people go to chain stores for groceries, hardware and clothing is that they usually offer lower prices. The interesting thing about the financial services industry is that the “chain stores” (the industry calls them “wirehouses”) like Merrill Lynch, UBS, Wells Fargo are not cheaper than financial boutiques.

These boutiques go by other names such as “Registered Investment Advisors” (RIAs) or “Independent Wealth Managers.”   But they are all focused on satisfying their customers, not on the sale.  They are true servants to their customers.  While wirehouses give the impression of size, the are limited to selling the products they have on their shelves.  They can’t suggest you shop down the street for a product that’s better for you.  RIAs are fiduciaries, meaning they put their clients’ interests ahead of their own.  They focus on what’s best for the customer rather than the sale.

According to a survey by Cerulli Associates, over half of the ultra-high-net-worth clients still have their assets at wirehouses or bank trust departments.  That is changing as younger investors or the heirs of the older investors seek the kind of personal service that RIAs and Independent Wealth Managers provide.

If you’re looking for boutique service without paying more for it, contact us.

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