The Benefits of using a Fiduciary Financial Advisor vs a Large Corporate Bank for your Wealth


When deciding where to invest as an expat, safety and security are ultimately your first thought. You want to know that your funds are safe and secure. Therefore your instincts are that a large corporate bank with a strong balance sheet is a better choice to house your hard earned savings. Your thoughts are that there is much less chance of a large institution going out of business than a small company, right?

Perhaps it might be prudent to consider the following few points before rushing to your local bank to manage your investment portfolio;

Smaller companies don't touch or hold your assets. They are held with a custodian which takes the form of a stockbroker or indeed a much larger financial institution. That institution will provide the reporting and online functionality you would normally enjoy with your local bank.

Such accounts with custodians are Nominee accounts, held off balance sheet. This means that should the custodian go out of business for whatever reason then your account is segregated and cannot be affected. Your account could simply then be transferred to another custodian, who would report on the ongoing transactions.

Were the same funds invested with a Bank for example, then the institution may hold the funds on their balance sheet, meaning that they can loan against them and treat your account and its content as assets of the bank on which they could leverage for other banking operations. Usually this isn't a concern, but in the event of rogue traders, or mismanagement then your savings would be at risk. The cover for such losses would be only to the extent as that provided by the local regulatory authority, which is usually significantly less than the account balance.

Therefore, your funds are often safer with a Fiduciary Financial Advisor using Nominee accounts with a designated custodian.

Only the best employees set up firms providing competitive wealth management services in competition to their huge former employers.

Asset managers who have managed portfolios within large institutions garner the requisite level of experience and qualifications throughout their tenure in the industry but often feel hampered by bureaucracy and politics within a large organisation.

An unqualified, inexperienced individual would be ill advised to take on massive institutions, for if they did they would inevitably fail. However, the best performing staff often create firms in direct opposition to their former employers' as they feel they can provide a better service and better performance to their underlying clients.

Larger organisations are often beset with politics and bureaucracy.

In wealth management particularly the ability to manoeuvre is imperative to success. Spotting opportunities in the market and being able to take advantage is often paramount to success.

It is often the case in large organisations that an idea must be presented to an investment committee, reviewed and approved before being disseminated to the underlying portfolio managers for action. These delays can often lead to opportunities being missed or indeed reduced.

Larger organisations often use a benchmark on which they monitor performance. This can sometimes be an anvil to the prospect of taking an opportunity. If the benchmark has an exposure to Technology stocks, for example of 20% and the large organisation is bullish on technology stocks often they will only hold a couple of percentage points more than that of the benchmark, meaning performance will only ever be a few percentage points either side of the selected benchmark, which can produce very pedestrian returns.

The allocation of the benchmark is often met with the purchase of a collective for the purposes of diversification. This is a very safe strategy and requires little analysis and assessment of the underlying assets. Taking the time to carefully analyse individual components of a portfolio and populate it with carefully selected stocks can lead to superior outperformance.

Fiduciary Financial Advisors, they must go above and beyond with respect to service if they are to compete with their big name counterparts. This drive to compete often manifests itself in a better service delivery.

Similarly, smaller companies don't have huge marble corner offices to finance and they can charge a performance fee together with a far better service, which in turn equates to better returns over time.

expatwealthatwork are one such wealth management firm, we are managed by staff who excelled within their firms, have become highly qualified and apply stringent wealth management criteria to their portfolios.

This leads to portfolios comprised of carefully selected and assessed stocks and ultimately considerable outperformance, which we have realised since inception in 1994.

If you are interested in hearing more about our services and offering, please do not hesitate to contact us: