The 10 Worst Cliches of Wealth Management

Do you get the sense wealth management is turning into an echo chamber of sheep? Products and services vary dramatically. But industry competitors are repeating the same tired phrases to describe what they do.

It’s a problem. Hollow refrains cheapen important discussions about compensation or expertise. If an entire industry is going long on fiduciary claims but short on substance, the words are little more than empty sales pitches.

Some of the following clichés are stock phrases about compensation and investment performance. They highlight our industry’s need to swap assets-under-management fees, which have become catchall remuneration, for retainers tied to specific expertise and services.

Others are noble concepts. But some industry competitors are hijacking phrases about fiduciary duty for marketing purposes, a practice that will fester until regulators eliminate the need to make distinctions from the nonsensical “suitability” standard.

1. “We sit on the same side of the table as our clients.”

This line is classic. Investment professionals use it to promote fee-only pricing over commissions.

But this line is false. As a veteran of several wirehouses and registered investment advisers, I report with confidence that conference tables are not long enough for salespeople and prospects to sit on the same side. (Yes, I believe all investment professionals are either salespeople or out of work.)

Just be direct. Explain why your compensation is reasonable payment for the expertise you provide.

2. “We win if you win.”

No, you don’t. If you charge fees, you make money, period. What is it about compensation that generates such frivolous platitudes from brokers and RIAs alike?

Maybe we should call it “compensatan” and get real about the economics…