Time for a paradigm shift in Wealth Management? Choice – the key dynamic for Relationship Managers and Wealth Owners

Key points from the WELREX® launch event 13/10/22, which included presentations from Founder and CEO Yevgeni Agerd and Investment Director Stephen Ashworth. 

The WELREX® team recently held its official launch event which addressed the current key dynamics in Wealth Management from the point of view of both Relationship Managers and Wealth Owners. An engaged audience from private banking, relationship management, wealth owners, introducers and UK business press heard WELREX Founder and CEO Yevgeni Agerd summarise the genesis of the WELREX business concept and its platform capability, with Investment Director Stephen Ashworth describing its more detailed functionality, set in the context of the current vectors impacting the investment environment. A lively Q&A session followed. 

Edited highlights are available here.

The WELREX® proposition 

WELREX® was created to fill an obvious Wealth Management market gap whereby Relationship Managers (RMs) are not able to deliver what they want and their clients are not getting what they need. 

Despite statements to the contrary, the traditional industry paradigm is not serious about delivering a service model which provides optimum value to Wealth Owners and enables Relationship Managers to develop their own successful business. 

In short, Wealth Management firms have been failing good RMs on a number of fronts: RMs don’t legally own their client book; they may be overworked with ever-rising targets; they may feel underpaid and that their bonuses are subjective anyway; they may lack flexibility to focus on what matters most to them; and they may feel hamstrung by internal politics and bureaucracy.  

WELREX® has addressed this opportunity by conceptualising “Wealth Management as a platform” and delivering clear benefits for both Independent Relationship Managers (IRMs) and their clients (Wealth Owners). 

IRMs benefit because they: 

• Legally own and protect their client book 
• Get compensated purely on delivered results 
• Work how and where they want  
• Set their own targets  
• Focus on servicing and growing their client book more productively 

Wealth Owners get: 

• Seamless access to the best institutional wealth management solutions  
• Investment management capability with performance-linked charges  
• Curated products and pricing usually reserved for Ultra High Net Worth individuals  
• Unique hybrid model of modern technology and human advice to make better decisions  
• Improved control and greater satisfaction managing their wealth. 

WELREX® is the only player in the market aspiring to become a digital Wealth Management marketplace of choice for IRMs and their HNW clients. WELREX® helps RMs become independent and more financially secure by redefining how their clients make choices about where to place money, how to transact at optimal cost and how to invest institutionally with the best possible outcomes. Clients (Wealth Owners) get a better user experience and an expanded offering with transparent pricing. 

In the words of founder and CEO Yevgeni Agerd: “With WELREX® both IRMs and their clients save time, money, and effort and get to focus on what matters most to them.”

The WELREX® platform 

Across traditional, alternative, and digital asset portfolios, WELREX® provides a combination of curated in-house and third-party solutions, with discretionary and advisory mandates. The platform is a turn-key solution that handles everything from digital client on-boarding to consolidated reporting – with a portfolio management system, order management system and sophisticated analytics in between.  

Unlike traditional models which start with asset classes or geographies, the WELREX® platform uses a framework of 7 key exposure factors to maximise the flexibility of building a portfolio, and around which investment and risk management processes have been created.  

The 7 WELREX® factors – Cash – Income – Real Assets – Growth – Value – Alternatives – Crypto – deliver maximum flexibility since every possible investment can be classified into one of the factors. More importantly, each factor has a proxy risk measure meaning risk, correlation, and relative valuation metrics can be constructed from standard analytics. Allocations to the 7 factors are top-down based on market conditions/macro drivers and then optimized for desired risk using traditional mathematical approaches.    

Each exposure factor then has its own bottom-up portfolio – making it easy to efficiently scale to the risk appetite of each investor within the same overall framework on the platform.  This thinking around risk exposure also ties into a behavioural finance screening process which is used when onboarding investors.  

The exact instruments for each factor portfolio are decided by the WELREX® Investment Committee from a short list identified from the possible universe of instruments after a quantitative screening for fundamental and technical measures. In addition, flexibility can be applied to which instrument sits in which factor bucket, very useful as market conditions change. 

Risk management is critical to and embedded in the whole process. Risk analysis determines how and why positions are selected but also identifies when course correction may be needed. Each position has a stop loss set with reference to recent price action and the logic for it being included. (If such a stop is triggered this would indicate the rationale for it being in the portfolio was incorrect). 

Overall, the approach means WELREX® portfolios have greater flexibility and can be adapted faster to changing market conditions, with the objective of delivering better overall returns and with the added advantage that portfolios and changes can be more easily explained to clients. 

Investment Director, Stephen Ashworth, summed up with a simple message: “The current extraordinarily challenging market conditions may not seem ideal for launching a wealth platform but by bringing together thinking from different investment disciplines in a flexible and adaptive framework, WELREX® enables IRM’s to offer their clients a new and different investment approach to ride through current and future market turbulence.” 

If you would like to receive a copy of the event presentations, contact Joe Clift via joe@welrex.com.

Register now to see how WELREX® can help you develop your business. Or connect with our founder and CEO Yevgeni Agerd yevgeni@welrex.com to learn more.