Wealth management is increasingly seen as a profitable new arena for non-wealth firms. While technology companies are the obvious candidates to branch into the wealth management space, media companies that are known for their print journalism are showing signs of taking the lead. Will print journalism, seen by many as a rapidly declining industry, sustain the move into wealth and gain the status of a regulated advisor?

Both technology and print journalism have loyal customer bases and strong brands. But print journalism has the additional advantage of being able to avoid some of the privacy concerns associated with large technology companies.

Meet the newsmaker-turned-wealth-manager
The print journalism foray into wealth has so far used two models: partnering with an asset management firm or delivering wealth services under their own brand name.

The Times Wealth Management, for example, is structured as a new wealth management business. It positions itself as providing a range of services, from D2C (direct to customer) platform for DIY investors, to a managed portfolio service. It becomes clear to the customer that they have paired with BestInvest only when the customer clicks to purchase a product e.g. open an ISA.

The Telegraph, on the other hand, chose to team up with St James’ Place as its investment partner. The Telegraph supplies the educational element (e.g. wealth and investment seminars and guides) while St James’ Place does the wealth services bit. To the customer, Telegraph Wealth and Asset Management Services and Telegraph Money Services more broadly look like another Telegraph’s online news page. The presentation could be setting up the expectation that the content has no commercial bias.

In practice, the firms in both examples rely on their solid, trusted brand to provide exposure for their relatively less well-known wealth partner. This partnership of media and wealth raises concerns when you consider the implications for advice and bias.

Whose side are you on?
Journalism is an industry that informs. Arguably, to inform well, the industry players must be impartial and, to an extent, unbiased. Ofcom, the UK regulator for communications providers enshrines as a principle that ‘news, in whatever form, is reported with due accuracy and presented with due impartiality’. This is an interesting position when you consider newspapers using the strength of their brand and customer base, thereby making themselves good business-partner material.

Concerns around impartiality and bias arise whenever there is a new commercial interest in press companies, particularly with equity ownership. Nevertheless, partnering with a money firm on the very basis of a trusted information-provider brand is a completely different ball game.

(Don’t) take my advice
At present, UK newspapers are, rightly, not considered to be dispensing FCA (Financial Conduct Authority) regulated advice when they circulate articles about the relative advantages of specific wealth management firms or, indeed, specific investments.

But as the FCA concentrates increasingly on what advice means, particularly in the D2C context, will media firms partnering with wealth management firms fall under the FCA’s remit? And will that make them the next point of contention?

References

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