- Client Background
Our client, a retired IT professional residing in Mumbai, approached us for assistance with his investment portfolio. In fact I approached him and was the first few clients when I was starting up my practice. Despite being a do-it-yourself (DIY) investor, he faced challenges due to the complexity of his portfolio and limited guidance provided by bank relationship managers. His investments were scattered across a higher number of schemes, including overlapping and close-ended ones, indicating a lack of strategic planning. Moreover, asset-level diversification was not adequately considered, and his investments were not aligned with specific financial goals.
- Challenges Faced by the Client
- DIY Investor with Bank Assistance: The client managed his investments independently but also sought advice from multiple bank relationship managers, leading to a disjointed and inefficient portfolio.
- Overlapping and Close-Ended Schemes: His portfolio comprised a higher number of schemes, with overlapping and close-ended ones, resulting in redundancy and complexity.
- Lack of Asset-Level Diversification: Asset-level diversification was not properly considered, exposing the portfolio to unnecessary risk and volatility.
- Absence of Goal-Based Strategy: The client’s investments were not aligned with specific financial goals, lacking a structured and purposeful approach.
- Solution Provided
- Comprehensive Portfolio Analysis: We conducted a thorough analysis of the client’s existing portfolio, identifying redundant schemes and evaluating their performance relative to market benchmarks.
- Streamlining Investments: Based on the analysis, we recommended consolidating the client’s investments into a more streamlined and efficient portfolio. We eliminated overlapping and close-ended schemes, focusing on diversification across asset classes and investment styles.
- Asset-Level Diversification: We emphasized the importance of asset-level diversification and reallocated the client’s investments to achieve a balanced and diversified portfolio. This included exposure to equities, hybrid funds, and liquid funds, tailored to the client’s risk tolerance and financial objectives.
- Goal-Based Investment Strategy: We worked with the client to establish clear and measurable financial goals, such as retirement income, healthcare expenses, and legacy planning. By aligning his investments with specific goals, we developed a goal-based investment strategy to ensure that his portfolio served his long-term objectives.
- Professional Portfolio Management: We provided ongoing portfolio management services, including regular performance tracking, rebalancing, and adjustments based on changing market conditions and the client’s evolving financial needs.
- Educational Support: The client was financially literate, and had ample time to evaluate our suggestions. Therefore, we offered factual data and guidance to empower the client to make informed investment decisions.
- Outcomes
The client's investment portfolio was streamlined and consolidated, reducing complexity and redundancy.
Asset-level diversification was achieved, mitigating risk and volatility while enhancing potential returns.
Investments were aligned with specific financial goals, ensuring a purposeful and strategic approach to wealth management.
With ongoing portfolio management services, the client benefited from expert oversight and proactive adjustments to optimize performance and meet evolving objectives.
Through educational support, the client gained a deeper understanding of investment principles and strategies, empowering him to make more informed decisions and take control of his financial future.
- Conclusion
By addressing the challenges faced by our client and implementing tailored solutions, we successfully transformed his investment portfolio to better align with his financial goals and objectives. Our comprehensive approach to portfolio management, combined with ongoing support and education, empowered the client to navigate the complexities of investing with confidence and clarity.
* We take our clients’ confidentiality seriously. While we’ve not disclosed their names, the results are real.
