There seems to be a common misconception among many non-financial sector: Your money is safe at the bank. In fact, your money is safer with the industry giants, with a number of smaller players, and no case of Merrill Lynch and Lehman Brothers.
There are names like Charles Ponzi Bernard Madoff and scare people from boutique investment firms, but the fact is, you can secure your money in these institutions than they are when investing with a large financial institution. Boutique investment firms offer a significant competitive advantage compared to industry giants, especially the banks.
Although definitions vary, a boutique investment firms usually have less than 2 billion assets under management. They are mostly owned by its employees with the employees of the major investments are major founder or owner. So, because the investment manager to have personal ownership of the company, tend their interests closely aligned with shareholders.
This article includes six competitive boutique investment firms have advantages over banks and large financial institutions.
Benefit # 1: Continuity and consistency of investment:
One of the reasons large companies store offers a better performance because they tend to be owner operated and offers more continuity. Portfolio manager at investment firm or large banks tend to be promoted, get recruited by another company or leave, so that your investment to another manager of ideas and different strategies. This is much less likely to occur with an owner-managed funds. In fact, 11 of the 20 best performing equity funds in the last 10 years, led by their founders.
Benefit # 2: Agility and Flexibility
Since the companies are small businesses, they have to meet the agility and flexibility, quick decisions that firms no longer important, because they are burdened by the layers of management and bureaucracy. Small businesses are able to fully on investment management. They are less on the personal and bureaucratic problems that come with a focused large companies.
Benefit # 3: Personal Service
For many retail banks that offer private banking, private wealth management is only one of its divisions. Often share the legacy systems, enterprise policy and relations with customers, making it difficult for them to process, claims to measure. Boutique banks are built to serve several large customers. IT business model of the system, culture and service are to be designed to meet the needs of a demanding clientele.
Benefit # 4: Trust
Boutique banks tend to treasure their relationship with the customer, as they account for more than it does not break the bank. To maintain many private bankers to business boutique strong relationships with customers, where the sale is secondary to maintaining long-term relationships. Many private-banking clients, then make decisions with their bankers, instead of just the market place orders through them. Private bankers usually have a thorough knowledge of their clients, family history, risk tolerance and investment philosophy, these kinds of views not typically offered by consultants in retail banking.
Benefit # 5: No conflict of interest
Large retail banks will often get you into their own products, such as mutual funds and growth funds, not because it is in your best interest, but because the bank receives a management fee of portfolio management at a time and resource management. With boutique investment firms, the selection of investment products based on what is best for you.
Benefit # 6: Operating expenses
Since boutique investment firms have less overhead, less paperwork, less bureaucracy and that the commercial banks or investment firms are important, they can usually a competitive investment management fees. Not only that customers receive outstanding service and know-how but also costs less.
Many see the recurrence of the holding company as part of a natural development. As we emerge from this recession, the federal republic, the mega-financial institutions that are not sustainable and not necessarily in the best interest of society. Nimble, concentrated, high-touch businesses are the bedrock of capital formation and not “too big to fail” financial institutions.
