Episode 43: The Philosophy of Profitability of Wealth Management Firms

Christopher Tan

In 2007, our then Head of Client Relationship Management asked: Chris, do we make more money from clients by going through all the trouble doing this (introducing new investment portfolios to the clients)?

Chris smiled at her and replied: No, we don’t. In fact, we may make even lesser because of the higher operational costs.

Why then do we do this? She asked.

In this episode, I will share our philosophy of profitability and why we have transited to using low-cost instruments such as ETFs, index funds and evidence-based funds from Dimensional Fund Advisors for all our investment portfolios.

Important note: Low-cost investment instruments have proven to better deliver the expected returns for our clients than high-cost actively managed funds.

View the full list of podcast episodes published here.

The host, Christopher Tan, is Chief Executive Officer of Providend, Singapore’s first fee-only wealth advisory firm and author of the book “Money Wisdom: Simple Truths for Financial Wellness”.

Music courtesy of ItsWatR.

For more related resources, check out:
1. Providend’s Money Wisdom Podcast Episode 35: The Best Way to Get Investment Returns
2. Evidence-based Investing – Why Is It Important?
3. The Reason Why I Left the Insurance Agency

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