Introduction to MBMG for those that don’t know MBMG Investment Advisory
Who is MBMG Investment Advisory?
Get to know us : https://mbmg-group.com/investment-advisory
MBMG Investment Advisory is approved by the Securities & Exchange Commission of The Kingdom of Thailand (SEC) to provide investment advisory services under licence number ด06-0055-21.
This license permits the Company to give advice to the public, whether directly or indirectly, about the value of securities or the suitability of investing in those securities and the purchase or sale of any securities, assets or currencies. There are various different ways of describing what we do – fee-only advice, asset consulting, fiduciary but the short version is that our clients pay us to provide advice and, because we don’t have the conflict of interest of being paid by product or service providers (something of a problem throughout financial services) then we’re not exposed to conflict of interests (see fee-based advisory on the following pages).
Investment advice overlaps many other areas, such as taxation advice and compliance, where we also draw on the expertise of other parts of the MBMG Group, such as MBMG Corporate Solutions, which incorporates legal, accounting and audit experts. Chinese walls separate our entities which comply with strict data management and conflict of interest policies and regulations.
Our Global Reach across 126 countries
The MBMG Group is a member of the invitation-only Geneva Group International (GGI) Alliance, the largest global multidisciplinary alliance of independent accounting, audit, law and consulting firms, with almost 30,000 employees in 870 offices spread across 126 countries, enabling access to worldwide expertise and know-how.
The MBMG Group specializes in providing professional services to our personal, corporate and institutional clients as well as government agencies and organizations.
These include digital and cloud accounting and management systems for business of all sizes as well as corporate legal and advisory services, with particular expertise in due diligence and valuation services, feasibility studies and start-up, tax advice, planning and compliance, corporate secretarial, legalization and visa issues, risk management, insurance, and M&A advisory and transactions.
Our personal advisory services include risk management, offshore trust, business and family asset structuring, broker account, private bank and investment account analysis, asset and currency allocation advice, inheritance planning (including. wills/trusts), insurances, tax planning and compliance plus real estate and residency services.
Fee-based approach and why it saves money
| Fee-Only Charging a flat rate for services | Commission – Based Compensated with payment on investment transactions | |
| Income | Earned entirely from fees paid by the client, in line with a published price list. | Earned entirely on the products sold (i.e. insurance packages and funds) or the accounts opened for clients. |
| Suitability (SEC) | Suitability alone is insufficient as that is exceeded by the fiduciary standard. | Must follow suitability standard requiring recommendations to be made based on client’s personal situation and needs, but no obligation to act in line with client’s best interests. |
| Fiduciary (SEC) | Must follow fiduciary standard requiring clients’ interests to be placed first, with advice solely for the benefit of the client as opposed to profit for the advisor. Duty to clients over any duty to a broker, dealer, or institution. Must conduct a thorough analysis and must both disclose any conflict of interest and also indicate the best execution or terms in any advice given. | No fiduciary standard applies to brokerages or banks (other than through any affiliated investment advisor entities, operating as fee-only investment advisors). |
| Strengths | A greater degree of objectivity due to the method of compensation, unbiased by conflicts of interest. A far greater opportunity set encompassing the entire global universe of stocks, bonds, funds, deposits, investment platforms, property, businesses and management & advisory services. Fixed fee advice creates a greater transparency that also places transparent limits on the fee levels, resulting in a very cost-effective service. Homogenous fees across client types makes fixed fees even more cost-effective for larger portfolios. The best execution savings that can be generated from external product and service providers (such as institutional fund classes) often generates a portfolio fee saving exceeding the fixed advisory fees payable – whilst it would be misleading to describe the service as free, some, most or all of the service cost, or more, can often be recouped in savings. | Suitability ensures a range of appropriate investments from a universe regulated or approved by the SEC (in some cases under IOSCO passporting). Regulation of suitability ensures that advisors are obliged to adhere to standards. Some clients like the, admittedly false, perception that if the fees are all embedded or hidden, they are getting something for nothing. |
| Weaknesses | Fee-based services can appear relatively expensive, as commission-based services embed fees in a way that can hide or disguise them and encourage investors to believe that they’re getting something for nothing. Fiduciary services generally don’t include execution fees or external product or service costs which have to be paid in addition. The provision of professional services on a fee-only basis means that while this favours larger investors, it can be increasingly expensive for smaller investors (with say less than THB 1 million/£20,000/US$30,000 in advisable assets). | Many commission based advisors are only nominally employed by the firms whose cards they carry. Their remuneration can be significantly or even exclusively driven by commission earnings like self-employed, contractors to the firm. The best interests of the individual advisor and the firm might be realized by maximizing commission income through highly remunerative investment products, exceptionally high product fees, excessive trading frequencies and churning. Clients under common misconception of receiving free services face a lack of transparency in identifying or controlling hidden costs. Unlike the fiduciary model which requires costs to be minimized, the suitability model creates an incentive for costs to be maximized. |
“The big difference between a fee-based advisor and a commission-based advisor is that the former collects a flat fee (a flat retainer, or an hourly rate) for investment advice or a percentage of assets under management, while the latter receives payment upon opening an account for a client or on the sale of a financial product by the company offering that financial product.”
– Jason Van Bergen, 13th April 2018
Commissioned services may very well be the most suitable for some investors, particularly in the case of a smaller portfolio where less active management is required; paying the occasional commission is probably not going to be the downfall of the portfolio’s returns over the long-term. Yet for anybody who has a larger or more active portfolio to manage, whose investment objectives necessitate frequent trades and active asset allocation, the rise of the fee-only investment advisor has been described as “akin to portfolio nirvana”. It allows investment professionals to do well for themselves while taking their clients’ best interests to heart.
While commissions remain the primary means by which investment firms make money, and it’ll likely stay that way for the foreseeable future, the Company has adopted a fee-only business model. Within this approach, the first step is to agree and specify client aims from a point of view of life goals and obligations, or specific financial planning scenarios in terms of areas such as taxation planning, currency management, liquidity requirements and appropriate levels of risk/reward.
Having done so, we then produce a proposal, such as this one for you, outlining what we understand the scope of work to be. If you agree and wish to proceed, we then invoice for our services and produce the report and then support that with any ongoing explanations, further information or other assistance to enable you to act on the report.
“[MBMG] will listen to what a client’s goals are, analyse what the client has to do to achieve those goals, and then, based on reasonable probability, tell them what they need to be investing yearly, how much they need to be earning and how much they need to be saving. Paul says in some ways it’s a boring approach, “What we do is very practical, it’s not very exciting, it’s not very sexy. We don’t go around saying ‘this investment could be the hottest thing in the next twelve months.’ We tend to focus on the risk side of things while coming up with reasonable, practical solutions.”
– Interview with MBMG Co-founder, Paul Gambles, July 2015
Contact MBMG Investment Advisory for more details
: info@mbmg-investment.com
Please Note: While every effort has been made to ensure that the information contained herein is correct, MBMG Group cannot be held responsible for any errors that may occur. The views of the contributors may not necessarily reflect the house view of MBMG Group. Views and opinions expressed herein may change with market conditions and should not be used in isolation.
