Top 10 wealth management mistakes

Font Size

Print

Feedback

Email

Discuss

Related Articles

NSE, BSE to extend trade timings soonSix cos lose over Rs 19k cr in m-capJet Airways, Sesa Goa to raise $900 millionHow to pick a stock in a downturn?

: service you wish to buy, hence it is important to ask questions, determine what their plan of action will be and how your money will be invested. Prepare a list of questions you would like answered, to put forth to your wealth manager. Remember, being free and open about talking to your manager, being able to disclose everything and, most importantly, having a comfort level and rapport with him is a must.

3. Clarity

Lokesh Nathany, national head of wealth management, Almondz Global Securities feels “One of the most important parts of wealth management is asset allocation. This is a critical area where many people have made mistakes, by jumping around too much or not changing at all.” And this happens because there is no clarity in why the wealth manager was approached.

“We often get clients who have come to us because their friends told them at a party that our firm had helped them get some quick returns. So here they are,” says a relationship manager with a global wealth management firm.

Though not water-tight, you have to have some clarity on the broad goals that you want to achieve in your life. These goals could be in the form of your children’s education, buying a farm house, children’s marriage, retirement and even beyond your demise.

4. Revisiting objectives

Obviously, as life goes on, objectives and goals keep changing. And when these happen, the wealth manager or the relationship manager must be consulted to reset the entire portfolio. And this is a critical aspect many clients tend to forget, says a wealth manager. In case you have a marriage plan changed to a closer date than planned then you would might have to liquidate a few assets that you have kept for that date. Now, which are the assets that you would liquidate and how do you restructure the portfolio? Such decisions must be taken after great thought, reckon experts. But revisiting objectives just because market circumstances have changed and reshuffling the overall asset allocation mix at regular intervals might not be the right thing to do. But if there are compelling reasons, like the huge bull-run in the past three years (which is not exactly short-term), revisiting objectives and a reshuffle might actually work.