Independence in the financial sector has become rare – and family office services are no exception.
When banks have to sell their own products and asset managers are interested in commissions, the question arises: who is really advising in the client’s best interests? Novum Partners SA Geneva has found an answer to this dilemma.
The multifamily office Novum Partners SA, Geneva, is deliberately positioning itself as an independent player in the Swiss financial landscape. With no financial products of its own and no ties to specific banks, the company, founded in 2018, focuses exclusively on the interests of its clients. This philosophy seems to be working: with over 5 billion Swiss francs under management and recently named ‘Switzerland’s best wealth manager’ by Euromoney, the Geneva-based company has established itself as a serious alternative to traditional providers.
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Why independence is so hard to find
Imagine you go to a car dealer. Of course, they will sell you the car they have on their lot. Not necessarily the one that would be best for you. Much of the financial industry works in a similar way. Banks sell their products. Asset managers collect commissions from fund companies. Independent advice? Rarer than you might think.
That’s because of the system. Anyone who offers free advice has to earn their money elsewhere. Often by selling high-margin products. Or through commissions from product providers. Both models lead to what economists call ‘conflicts of interest.’
The hidden costs of dependent advice
Conflicts of interest cost money. Sometimes directly through overpriced products. Often indirectly through suboptimal investment portfolios. An example: Structured products often have high profit margins for the bank offering them. Accordingly, they are popular. Whether they are optimal for the customer is another question.
Novum Partners SA, formerly known as Novum Capital Partners SA, has deliberately chosen a different model. No proprietary products, no commissions from third parties. Instead, transparent advisory fees. Sounds expensive? It is often cheaper than you might think.
Independence: a luxury or a necessity?
Some clients ask themselves: Do I really need independent advice? The answer depends on the complexity of the situation. Those who only have a simple portfolio managed may not notice the difference. For complex family office services, however, independence becomes a decisive factor.
A wealthy entrepreneur is selling his life’s work. The bank offers him three different investment options. All three are in-house products with corresponding margins. An independent advisor looks worldwide for the best solutions. Who will achieve the better result?
Asset allocation strategy without product pressure
What is the optimal asset allocation? Experts have been arguing about this for decades. There is no answer. But there are bad answers. For example: ‘Buy our new product, it’s right for you.’
The agony of choice as an opportunity
The multifamily office can choose from the entire market. The best equity funds from the US, innovative bond strategists from Europe, alternative investments from Asia. Sounds like more work? It is. But it leads to better results.
A practical example: A family wants to invest in emerging markets. Their house bank has its own fund. It costs 1.8 per cent per year and is average. There is a fund on the market for 0.8 per cent that performs significantly better. Which would you choose?
Diversification across providers
Independence also means not putting all your eggs in one basket. This applies not only to asset classes, but also to providers. If you have all your assets with one bank, you are at the mercy of its business policy. What if the bank decides to shift its focus? Or is taken over by a competitor?
At Novum Partners SA, investment portfolios are deliberately diversified across different providers.
Custodian banks for safekeeping, specialised asset managers for individual asset classes, alternative providers for niche areas. More complicated to coordinate, but safer for the client.
Transparency as a side effect of independence
If you have nothing to hide, you can be transparent. Those who collect commissions or sell their own products are less willing to talk about costs. Logical, isn’t it?
Cost structures in comparison
Transparent costs are often lower than hidden ones. That sounds paradoxical, but it can be explained mathematically. Here is a practical example:
- Bank with ‘free’ advice: 1.5% total annual costs due to expensive products
- Independent advisor: 0.8% advisory fee plus 0.2% product costs = 1.0% total costs
- Savings: 0.5% per year with better quality advice
With assets of 100 million, that equates to 500,000 Swiss francs per year. Relevant? Absolutely.
Reporting without embellishment
Independent advisors have less interest in concealing bad news. If an investment is not working, this is communicated openly. It’s not nice, but it’s honest. And it forms the basis for improvement.
The Geneva-based company produces reports that also contain uncomfortable truths. Underperformance is analysed, not hidden. Risks are identified, not downplayed. Trust is built through honesty, not through sugar-coating.
Alternative investments without sales pressure
Private equity, hedge funds, direct investments – alternative investments are complex. And lucrative for providers. They are therefore often sold aggressively. Sometimes too aggressively.
Due diligence without time pressure
Those who earn commissions want to sell quickly. Those who receive consulting fees can take their time. For due diligence, comparisons, second opinions. This takes longer, but leads to better decisions.
Novum Partners takes this time. Months to analyse a private equity fund? Normal. Compare several offers for similar investments? Standard. Protecting clients from a bad deal?
Our most important job.
Access to institutional offers
Independent multifamily offices often have better access to institutional products. Why? Because they are not in competition with the providers. A bank that sells its own hedge funds is unlikely to offer the best competing products.
This provides access to offers that are otherwise only available to pension funds or insurance companies. Lower costs, better terms, exclusive strategies. Advantages that are reflected in performance.
Credit consulting without product ties
Independence also makes a difference when it comes to financing. Those who are not tied to specific lenders are in a better position to negotiate. And achieve better terms.
Competitive financing structures
The multifamily office Novum Partners, formerly known as Novum Capital Partners SA, works with various banks. Each financing is put out to tender. Lombard loans, real estate financing, corporate loans – it’s always about finding the best solution for each individual case.
A concrete example: A family needs a loan to purchase a property. Bank A offers 2.8 per cent interest. Bank B offers 2.5 per cent, but with poorer repayment options. Bank C offers 2.6 per cent with flexible terms. Which solution is best? It depends on the circumstances.
International financing options
Wealthy families often live internationally. Their financing needs are correspondingly complex. A loan in Switzerland, secured by real estate in Germany, for the purchase of a yacht in Italy. Sounds complicated? It is.
Independent advisors have access to specialised international lenders. They understand such structures and can offer appropriate solutions. House banks are often overwhelmed by this.
Advice on new yachts as an example of independent consulting
Buying a yacht is an emotional decision. But it is also a business transaction involving many conflicts of interest. Brokers collect commissions from the seller. Banks want to sell their financing products. Insurance companies want to sell their policies. Who represents the buyer’s interests?
Independent expertise with no interest in selling
Novum Partners SA, Geneva, works with yacht expert Benedetta Iovane. Her job is to find the best yacht for the customer. Not the most expensive or the one with the highest commission. But the right one.
This starts with an analysis of requirements. How will the yacht be used? Mediterranean or Caribbean? Family or business? Charter or private? The recommendations change depending on the answers. And so do the optimal financing and ownership structures.
Structuring without conflicts of interest
Buying a yacht is rarely just about buying a yacht. Tax optimisation, choice of flag, ownership structures – everything has to be thought through. Anyone who has to coordinate different service providers, all pursuing their own interests, has a problem.
The solution? An independent coordinator who has only the client’s interests at heart. Someone who manages the various specialists instead of being managed by them.
Investment portfolios without blinders
In the end, it always comes down to the same thing: finding the best solution for the client. That’s easier said than done when conflicts of interest lurk everywhere.
Global perspective instead of in-house opinion
Novum Partners SA Geneva thinks globally. The best equity managers may be in New York. The most innovative bond strategists in London. The most interesting private equity funds in Singapore. Why limit yourself to Switzerland?
This openness requires more effort. Research in different markets, evaluation of different legal systems, coordination across time zones. But it leads to better results.
Long-term partnerships instead of transaction business
Independent advisors thrive on satisfied customers, not high transaction volumes or expensive products. This fundamentally changes the incentive structure.
Instead of selling as much as possible, the focus is on building long-term relationships. Performance becomes more important than commissions. Customer satisfaction is more important than quarterly results.
Independence has become rare in the financial industry. Commissions are too tempting, and proprietary products are too convenient. But for clients, it makes all the difference. Between good and optimal advice. Between acceptable and excellent results. Sometimes between success and failure.
