Looking for advice about managing your assets?
If we want to talk to someone about our finances and how best to manage our wealth or assets, some of us would go to a brokerage or a bank, while others might ask relatives or family members for advice. The choice of whom we talk to depends on our circumstances, the type of questions we want to ask, and the assets we want to discuss.
Make your choice based on the assets in question
The key consideration when thinking about how you manage your wealth is portfolio allocation (asset allocation). In other words, reducing risk by diversifying your assets. It is important to keep some liquidity in your portfolio, just in case you need access to cash at short notice. Liquid funds are assets that can be accessed quickly via sale or redemption without reducing your capital base significantly.
Once you have decided what proportion of your assets you want to keep liquid, you can think about what you do with the rest of your capital. If you want to invest in equities, you should talk to a brokerage. As well as straightforward equities, some brokerages give you access to a number of other products, such as mutual funds or bonds, as well as various types of insurance.
Because commissions vary and there is a range of different traded products on offer, it is worthwhile doing some research and looking at a few different brochures from different securities companies before you decide who to go with.
If you want to ask about loans as well, then you should talk to a bank. Banks also deal with investment trusts and insurance. Just as with a brokerage, you should do some investigation beforehand, to check the range of products and services offered, what interest rates are charged, and so on.
If you are planning for later life, it is also worth thinking about life insurance. You can discuss this with an insurance company or insurance agent. Insurance companies typically sell their own in-house products, just as brokerages and investment trusts do.
If you have real estate investment in mind, different operators have different areas of expertise: for instance, managing a single apartment building, or else a single or multiple apartments under joint ownership.
The company you consult will depend on the type of investment you are making. This is the first decision you have to make.
Who should I consult if I am a novice in terms of managing my assets?
If you know what you are investing in, you can consult the company in question directly as outlined above. But if you want to talk about allocating your assets proportionately across different types or classes of assets, it is hard to get comprehensive investment advice from brokerages alone, or banks, insurance companies or real estate companies.
In terms of diversified asset management, you need a neutral independent financial adviser who can discuss your financial requirements based on your own financial situation and requirements. Financial planners are not affiliated with any particular financial institution. They are investment professionals offering customers different options for managing their wealth across a wide range of financial products.
If you are a beginner, then you are better off consulting with a financial planner to get a clear, firm idea about the best way to manage your assets. They will give you impartial advice and be a reassuring presence, and can give you tips, for example, a recommendation on a seminar about how to open an investment account. If there are particular products or services you are interested in, you can discuss them with your financial planner. If you know what institution you want to deal with, you can deal with them directly. Otherwise if you want advice on different companies in a particular field or sector (for example, real estate) you should talk to a financial planner with expertise in that area.
Reviewing your own portfolio
If you are already experienced with managing your assets and want some specific advice on one aspect, or to check that you are doing the right things in terms of your portfolio, who is the best person to talk to? If you want a comprehensive review of your insurance and lifetime financial planning, not just wealth management, you should talk to a larger financial planning group which has a range of financial planning experts. These can often give you better advice than a single point of contact. Even if you feel that you just want a simple review of your financial planning, they may be able to recommend worthwhile changes or adjustments to make on your investments or investment strategy. A review with a specialist financial adviser can usually be very effective.