Managing wealth: A new approach

This paper investigates how well ‘mid-worth’ individuals are served by the financial services industry in the UK. It defines and analyses the new phenomenon of ‘mid-worth’ individuals: the rapid growth in the number of people with significant liquid assets available for investment. It then considers how well these individuals are served by the most common investment products and concludes that most individuals are so poorly served that the result is seriously damaging to their long-term financial health. The paper investigates the main reasons for this: a lack of understanding of the relationship between risk and return, and what can only be described as a conspiracy of ‘mystification’, resulting in customers standing even less chance of understanding the risk-return relationship. The consequence of this is that investors end up paying far too much for ‘heavily packaged’ investment products with the result that they may find they have much less money available to them when they need it most—in old age. The research for this paper was sponsored by Close Wealth Management.