Market Activity
It Has An Incentive Problem.
June 18, 2026
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Whenever I criticise parts of the wealth management industry, some people assume I'm attacking advisers.
I'm not.
In fact, I've met hundreds of advisers throughout my career.
Most are hardworking.
Most genuinely care about their clients.
Most want to do the right thing.
That's why this article isn't about advisers.
It's about incentives.
Because after more than 25 years in financial markets, I've come to a conclusion that many investors never consider:
The biggest issue in wealth management isn't intelligence.
It isn't effort.
It isn't competence.
It's incentives.
And incentives drive behaviour.
Every single time.
There's a saying in business:
"Show me the incentive and I'll show you the outcome."
It's remarkably accurate.
Think about any industry.
Salespeople are rewarded for sales.
Estate agents are rewarded for transactions.
Recruiters are rewarded for placements.
Technology companies are rewarded for growth.
People naturally focus on the things that drive rewards.
The investment industry is no different.
Yet many investors assume wealth management firms are primarily rewarded for generating the best possible returns.
Unfortunately, the reality is often more complicated.
Let's imagine you're running a large wealth management business.
What drives your revenues?
Performance?
Not necessarily.
In most cases revenue is driven by:
Assets under management.
Client retention.
Recurring fees.
Business growth.
Gather more assets.
Retain those assets.
Collect recurring revenue.
Repeat.
From a business perspective, it's a fantastic model.
Predictable.
Scalable.
Valuable.
Investors love businesses with recurring revenue.
The challenge is that these incentives don't always align perfectly with client outcomes.
And that's where problems begin.
This is an important distinction.
Growing a wealth management business and growing client wealth are not always the same thing.
One focuses on gathering assets.
The other focuses on growing them.
The two often overlap.
But they are not identical.
A firm can continue growing successfully while delivering average investment results.
Why?
Because clients rarely leave.
Changing advisers feels difficult.
Investment performance is often hard to measure.
Many investors don't know what benchmark they should be comparing against.
And most firms are extremely good at client retention.
As a result, average outcomes can persist for years without being seriously challenged.
This is one of the industry's biggest open secrets.
Nobody gets fired for being average.
Think about it.
If your portfolio performs roughly in line with everyone else's portfolio...
Nobody stands out.
Nobody looks dramatically wrong.
Nobody takes excessive career risk.
The explanation is easy.
"Markets have been difficult."
"Volatility has been elevated."
"Long-term investing requires patience."
All of which may be true.
But average outcomes become remarkably easy to defend when everyone is producing similar results.
Trying something genuinely different?
That's where career risk appears.
And many institutions are designed to minimise career risk, not maximise investment performance.
Look at almost every industry over the last 20 years.
Technology transformed retail.
Technology transformed media.
Technology transformed travel.
Technology transformed communication.
Technology transformed banking.
Yet much of wealth management still looks surprisingly familiar.
Why?
Again, incentives.
If a business is already generating predictable recurring revenues, there is often less urgency to innovate.
Less urgency to challenge existing models.
Less urgency to rethink assumptions.
The system is working exactly as designed.
The question investors should ask is:
Working for whom?
When investors meet a potential adviser or investment manager, they often ask questions like:
What funds do you use?
What's your investment process?
How often do you rebalance portfolios?
Those questions matter.
But there may be a more important question.
How are you incentivised?
What behaviour does your business model reward?
Because incentives shape decisions.
Always.
If a firm's revenue grows regardless of performance, that matters.
If a firm's success depends on retaining assets rather than outperforming, that matters.
If a firm's commercial objectives are disconnected from client outcomes, that matters.
Investors should understand those dynamics before making decisions.
When we built TPP, we spent a huge amount of time thinking about incentives.
Because incentives drive behaviour.
And behaviour drives outcomes.
We wanted a business that challenged many of the assumptions embedded within traditional wealth management.
A business built around transparency.
A business built around technology.
A business obsessed with accountability.
A business where clients can clearly see what is happening.
Most importantly, a business focused on helping investors grow wealth rather than simply gathering assets.
Because in our view, investors deserve more than a comfortable status quo.
They deserve innovation.
They deserve transparency.
And they deserve a business that wakes up every day thinking about investment outcomes.
Not just asset retention.
I don't believe traditional wealth management disappears.
Far from it.
Many firms will continue to do excellent work.
But I do believe investors are becoming more informed.
More curious.
More demanding.
They're asking tougher questions.
They're comparing outcomes more closely.
They're questioning fees.
They're embracing technology.
And that's healthy.
Because competition improves industries.
Innovation improves industries.
Transparency improves industries.
Ultimately, investors win.
The wealth management industry doesn't have a performance problem.
There are plenty of talented people managing money.
The industry doesn't have an intelligence problem.
Nor does it have an effort problem.
What it has is an incentive problem.
And until investors understand incentives, they'll never fully understand how the industry works.
Because incentives sit behind every decision.
Every business model.
Every recommendation.
Every strategy.
Every outcome.
The good news?
Investors have more choice today than ever before.
And that's exactly how it should be.
If you've ever wondered whether your current portfolio is truly aligned with your goals, or whether your existing arrangements are delivering the outcomes you deserve, get in touch for an absolutely FREE consultation call...
No pressure.
No obligation.
Just an honest conversation about your investments and the options available to you.
Thank you for placing your trust in us.
You already understand the importance of transparency, accountability and alignment.
We're incredibly grateful for your support and we're excited about what comes next.
The mission remains exactly the same:
To challenge the status quo and build something better for investors.
Have a great day everyone...
TPP strategies trade leveraged instruments, including equity index futures. Leverage magnifies both gains and losses, and the value of your investment can fall as well as rise. You may get back less than you invest. Capital is at risk.
*TPP client accounts have returned an average of 16.02% year to date, accurate as of 31 May 2026 and referring to the average of all client accounts. Past performance is not a reliable indicator of future results.
Disclaimer: The views expressed in this article are the author’s own and should not be considered to render any legal, business or financial advice. Opinions and estimates offered constitute our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions.
This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. This material has been prepared for informational purposes only.
Past performance may not be indicative of future results. Therefore, you should not assume that the future performance of any specific investment or investment strategy will be profitable or equal to the corresponding past performance.
TPP is a trading name of UCapital Asset Management LLP. UCapital Asset Management LLP is authorized and regulated by the FCA - Financial Conduct Authority - with registration number 477155. Registered Company number OC333807..Our past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any investment strategy or product made reference to will be profitable, equal any corresponding historical performance or be suitable for your portfolio. There is a substantial risk of loss in trading financial markets. Past performance is not indicative of future results.
“TPP might just be about to revolutionise investment for the retail market.”
- London Stock Exchange 2020
