Top 10 wealth management mistakes

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: during an equity boom this may change to a 90-10 ratio.”

5. Panic / greed

Wealth management is a long term process and there will be times, especially in the bull-run, when you would be tempted to risk more. These are the times when long and detailed wealth management plans are often shelved, sometimes broken down to indulge in speculation. “One of my clients actually broke our relationship and placed all his wealth on the markets, he even borrowed and took large positions. And when the markets started to tank, he panicked. But then, around 30% of his wealth was washed out in three months,” says a relationship manager not wanting to be named.

It’s first greed and then panic, he adds. You might want to keep some funds aside for speculation, but do not interfere with your wealth management capital and your life goals, unless any of them have changed.

6. Communication hassles

Wealth managers usually will keep sending you a lot of mailers and documents to keep you abreast of your wealth position. Now, there could be an information overkill situation. However, you need to be clear about where your funds are being allocated and how are they being monitored. And this relationship should be clarified at the very beginning of the association. Moreover, it is prudent to work with those who ensure maximum confidentiality and address your communication needs.

7. Protection

Often enough, wealth management is considered to be just about growing a set capital and then deciding how to distribute these monies. Many times, the aspect of protecting and covering assets and lives is not looked into. And many wealth managers, especially those attached with broking firms, tend to overlook this factor as well, or would include this in the investment basket, by using the unit linked route.

This is a grave mistake. You need to insist to your wealth manager to include the insurance aspect as well. And it is most likely that your wealth manager will actually provide you with some sound advice here. “The commissions from life insurance are quite attractive,” says Nikam.

8. Neglecting succession/estate planning