Private Bankers (with open architecture)
Examples of Conflicts
- Banker is incentivized to sell products that are proprietary while the client believes he provides objective advice on a broader array of products and services.
Questions Wealth Owners Should Ask
- What are the limitations of the advice you are able to give me?
- What services are provided for the fees that you charge? Do you charge for these services separately? Do you charge flat/fixed fees or just AUM based fees?
- How does the bank make money on non-proprietary products?
- What percentage of the products that you recommend are non-proprietary products?
- When offering non-proprietary products, does the bank receive any compensation from the product group (referral fees, trading or custody with the bank, etc.)?
- Is your ability to recommend non-proprietary products dependent upon the client account size?