When You Should Review Your Wealth Strategy
There are some things that never go out of style. Crisp white linens on a table setting, bubbles with a celebration, handwritten thank you notes, pancakes on a rainy morning. Then there are the things that aren’t forever, my financial planning strategy being one of them.
People know me first and foremost as a chef, and they’re not wrong, but I’m also a business owner and, like anyone else, someone who wants to make sure their money is doing the most for them. That’s why I like to look at and revisit my financial planning every few years to ensure I’m on the best path for me and my financial goals. But with so many options available on the market and a fair bit of fine print to read through, it can all feel a bit overwhelming at times, which is why I like to consult with financial professionals when I feel a bit stuck.
Pravesh Sunker, CEO of RMB Private Bank, recently spoke with me to share some insights on personal wealth management, the importance of a wealth strategy, and when it’s time to change it.
How has managing personal wealth changed or adapted over the last two years?
In the past, a client’s wealth plan was reviewed from an investment and insurance perspective to provide clients with investment advice and help them manage their risks. Over the last two years, we’ve adapted our approach to take a more integrated view – looking at both sides of our clients’ balance sheet. So we’ve shifted our focus to providing integrated financial advice across the transact, lend, invest and insure capabilities.
How do you know it’s time to review your wealth strategy as a client?
Clients go through different life stages – from wealth accumulation to wealth preservation and retirement. It’s important that a client reviews their wealth strategy at each life stage. At the same time, there are circumstances that trigger a review of this strategy. For example, getting married or divorced, buying a home, buying a car, the birth of a child, children going to university or when a child starts working.
As a private advisor, we normally engage with our clients and together with them determine what their individual wealth strategy should be. If there are no triggers then, as a minimum, we review a client’s strategy once a year. There should be no reason for fundamentally changing a strategy, unless there has been a life-changing event, like the examples mentioned previously. Even a global pandemic, a war or a financial crisis shouldn’t impact the strategy significantly. Where the change comes in will be the assets chosen to help our clients achieve their goals – for example whether to switch from equities to bonds.
Ultimately the strategy should be sound enough to withstand any global crisis.
What are the other reasons why private wealth clients should review their portfolios now?
Any of the life events mentioned above would be a good reason for a client to contact their private advisor. For example, buying a new home and taking a bond against it changes the client’s risk profile as well as increases the client’s assets. This will trigger a review of the strategy.
Equally, if a client believes that something has fundamentally changed in their life that wasn’t previously disclosed or wasn’t considered as part of the initial strategy, it would be a good idea for them to contact their advisor and request a review.
Why should a client have a wealth strategy?
Simply put, everyone should have a wealth strategy in place and the reason for that is to ensure that we are able to retire comfortably and realize our life goals. That means different things to different people but everyone should have a strategy in place.
The role of the private advisor is to put that strategy in place to help a client retire comfortably in terms of what that means to that client. The private advisor will take into account the client’s risk profile, their standard of living, their income potential, their level of debt, their goals post retirement and more.
What are some practical measures or steps Private Wealth clients can adapt into their portfolios to capitalise on the most effective strategies?
I believe that developing a wealth strategy should be done with the help of their private advisor, who are trained and qualified in this field and are experts at what they do. It’s a big risk for clients to assume they can go it alone.
The truth is you only reap the benefit of good advice at the end when you retire. Which is why it’s important to partner with an expert.
NO TWO WEALTH JOURNEYS ARE THE SAME
Which is why, in the tradition of trusted advice, we’ve reinnovated the classic Private Banker role to bring you Private Advisors. Our Private Advisors are accredited to offer strategic banking, money management, lending, investment and insurance advice – the holistic private advisory services you need to effectively grow and protect every aspect of your personal wealth.
In the tradition of trusted advice, we’re going to be innovating a classic – doing things differently, because no two wealth journeys are the same.