Confessions of an ex-wealth adviser

Wealth management is an honourable profession. If you serve your clients well you will likely establish a lifelong relationship with them. You can serve as their close adviser and that trust is gratifying.

I speak from first-hand experience having worked as a relationship manager and an investment adviser for prominent financial institutions in India, followed by extensive interaction with the wealth management industry in Hong Kong as a journalist covering private banking. Even though I have moved on from mainstream wealth management, I take pride in maintaining strong relationships with key clients whom I served as an adviser.

Sadly, for many wealth managers, this is not as straight forward as it sounds. The fiercely competitive world of wealth management creates intense pressure to generate sales, compelling advisers and relationship managers to push investments and generate commissions.

This is a high-cost industry involving grade A office space, large sales teams and lots of marketing. Many of these organisations' basic services are hard to distinguish from their competitors'. This means they rely heavily on their client relationships to generate sales.

The reality of this arrangement is that such staff, be they relationship managers at private banks or investment advisers at the big consumer banks, have to hit aggressive sales targets.

One has to wonder whether these incentive structures give rise to a conflict of interest.