This approach has become a major issue for clients. Not only can they often not see clearly enough how their portfolios are performing, but they have had very little, sometimes no, idea of how much they are being charged and the impact of these charges on their financial outcomes.
A change for the better, shaped by our experience
When Thomas Salter and I founded Netwealth after years of working in financial services, we knew enough to realise that there was no provider in the market that could meet our expectations of a modern wealth manager.
We didn’t want anything particularly special. Simply a professional, transparent investment service that would help us reach our individual financial goals – as well as potentially those of our parents and broader family members – with access to regulated advice should we need it. And, all of this enhanced by great technology and at the right price.
With the recent advances in technology, and a small team of outstanding professionals who shared our vision of what modern wealth management should look like, we were able to design our service from scratch and focus on what really matters to clients. So what are these attributes?
Our clients reasonably expect there to be no compromise in terms of what Netwealth can offer versus traditional IFAs or wealth managers. So let’s instead examine three key factors which make us different:
1. More control over your money
Time and time again, in surveys we have seen or conducted ourselves, a service that is easy to use is one of the most important attributes for individuals. As in all aspects of life, we want things to be simpler – investing wisely can be complicated and frustrating, so we have addressed how to make it more accessible and user-friendly by:
- Creating an intuitive approach to satisfying each individual investment goal such as retirement planning, paying for school fees or simply just investing.
- Making planning simpler – our powerful investment tools allow you firstly to track your wealth across all your accounts, regardless of provider, and then to plan for a variety of financial goals such as regular payments, significant outgoings or a pension income. These tools mean clients can clearly see the potential outcomes that the combination of their investment pots such as pensions, ISAs or a general investment account might deliver.
- Providing easier access to your portfolios – finding information about your account, such as costs or performance detail is just a click away. The latest technology powers a user-friendly interface, so accessing all your important data is effortless.
2. True transparency and lower fees (leading to higher performance)
Transparency is not a cliché to us, it is fundamental to our service: how and where we invest, our investment process, our clients’ portfolio performance and how much we charge. This is a vital component of how we communicate and manage relationships with our clients.
Once things are transparent, it’s all the simpler to understand costs, and we know that lower fees matter greatly to investor outcomes. This comes as no surprise given the remarkable impact of lower fees over the long term, a tailwind that has enabled a sustained advantage of up to 1.5% per annum in our higher risk strategies – evidenced by our recent 7-year performance figures.
We make it our business to ensure all-in charges are fully transparent and are delighted to be much lower cost than traditional providers whilst offering a directly comparable service.
3. Sharing economies of scale via the Netwealth Network
For Netwealth’s clients, having a wealth manager that extends the benefits to their family and friends is a dramatic step forward. We offered the Netwealth Network from the outset with a view to helping families drive economies of scale – a feature unique in the UK.
Clients can invite up to seven people to join their Network, while each account remains independent, so Network members can pursue their own unique financial goals. Once invited to a Network, members can start from as little as £5,000, while fees are calculated on the total amount invested by their group and therefore the aggregate assets collectively help to reach the lowest fee band.
The Network is proving extremely popular, with over 70% of our clients having taken up the service to share the benefits with those they care about.
How we think about money
Earlier we addressed why we set up Netwealth, which was to revitalise the outdated wealth management experience. It is also worth summarising two key aspects to our overall approach: Controlling the Controllables and how your finances should ideally be apportioned with the Three Pot Theory™.
When investing there are many factors we can’t control, such as inflation, the ebb and flow of markets, and the economic outlook. So when we talk to clients we always recommend an approach we call ‘Controlling the controllables’.
While it pays to be mindful of the factors we can’t influence, and prepare where we can, it is better to focus our energy on the controllable areas that have a material effect on our capital such as fees, staying invested and being well diversified.
We should also think about the ideal allocation of our finances, a philosophy we put into practice using what we call the Three Pot Theory™ and which we examine in detail here.
In a nutshell, the theory helps to make managing our money easier by allocating different pots for our funds: 1. For our everyday expenses; 2. For our long-term stable investments or ‘sleep well’ money; and 3. For our passions and less liquid investments (such as holiday properties or private equity holdings). Netwealth’s focus is on Pot 2, to provide a stable core to your overall investments.
Human input whenever it’s needed
Technology brings all sorts of advantages; however, when things don’t fully go to plan, or when there are life decisions to be made, it’s important to know you can talk to someone, whether for less formal financial guidance or for fully regulated financial advice.
Our team of qualified advisers are available either in person, or via phone or video, to provide advice as and when required. We don’t charge for advice unless it is formally sought, and then there is a choice between paying for it on an ongoing annual basis or taking one-off hourly advice instead. We also frequently hold online and in-person events where you can meet different team members and get a sense of whether we might be a good fit to help you achieve your financial goals.
What makes Netwealth different is based on the way we designed our business – a truly hybrid model combining decades of financial and wealth management expertise with cutting-edge technology. This approach allows us to meet the needs of time-poor professionals and their families and to deliver wealth management as we believe it should be.
Please get in touch to find out how we can help you.
Please remember that when investing your capital is at risk.
Netwealth offers advice restricted to our services and does not provide independent advice across the market. We do not offer advice in relation to tax compliance, personal recommendations with regards to insurance and protection, or advise upon the transfer of defined benefit pensions.
