Place/Date: - August 14th, 2018 at 9:41 pm UTC · 3 min read
Contact: Wealthman, Source: Wealthman
After a series of scandals this and the last year, Wells Fargo’s Wealth Management Division is now under Justice Department investigation, proving once again that Wealthman, the decentralized wealth management platform, is desperately needed.
On 27th July, The Wall Street Journal broke the news about the most recent scandal to hit the Wells Fargo [WSJ], this time in the Wealth Management sector for retail investors. A letter from two whistleblowers at the prestigious retail bank, Wells Fargo, has prompted an investigation from the Justice Department and SEC into bank’s dubious practices involving the wealth and investment management division.
The compensation structure and pervasive culture at WFC allegedly prompted brokers and advisors to commit a series of mal-practices including:
Imagine the loss of investors, given that Wells Fargo’s total client assets as a broker-dealer make up $1.6 trillion.
We think that the drawback lies in the current regulation of wealth management, which allows malicious practices triggered by incentives against the interests of the client.
The current regulation shows lack of requirements for brokers and wealth managers to disclose the effectiveness of individual investments. Clients are bound to believe the brand’s history, recommendations, and other kinds of irrational metrics which say nothing about the real competence of wealth manager or their incentive for achieving client’s financial goals.
We think that the investigation from the Justice Department will have a temporary effect especially because the share of assets on non-subordinated judicial system decentralized registries increases.
The real breakthrough lies in the creation of a Trustless environment for interaction between wealth managers and investors. Where the effectiveness of the wealth manager can be measured and disclosed, and it will be a market counterweight to the wealth manager acting against the client’s interests.
Wealthman is the first-ever fintech company that develops wealth management infrastructure, where investors are ultimately defended from malicious practices, including the full disclosure of management effectiveness as a one way of defense.
To do that, Wealthman platform evaluates wealth management effectiveness and excludes the involvement of designated parties in the sensitive processes like reconciliation of portfolio, asset exchange, data delivery, optimal portfolio computation, evaluation of wealth management effectiveness, etc. The stack technologies applied include the blockchain digital ledger, off-chain networks, cryptography, and many other innovative tools.
Wealthman team and the fast-growing community believe that decentralized wealth management services based on smart contracts will dislodge centralized robo-advisors, hybrid- and human-driven wealth management services and bring a new level of security and efficiency to humanity’s savings allocation.
For additional information about Wealthman, please visit: www.Wealthman.io