Good housekeeping is one area that could bring immense value to the investor. The number of financial products held by an investor these days is getting unwieldy. Documentation, preservation, operational issues and consolidation of holdings needs a lot of attention. An advisor who can lend a hand is bound to present himself as an invaluable partner. Here are some of the things that an advisor can do to enhance the lives of his clients.
1. He should inform his clients of the several investment avenues available and should advise them against getting into any sort of “mad rush” for investing in a specific investment. He should make it clear to his clients that there are several opportunities in the market and there is nothing like “the last big opportunity”.
2. The advisor can also help his client consolidate his documents into a single demat account, a single mutual fund folio per fund house, a single trading account, a single bank account, a single credit card etc so that it becomes easier to monitor and manage his assets.
3. He can guide his clients in standardizing details such as address, e-mail, phone numbers, bank account details etc. This would help in simplification of paper work and avoid errors during future transactions. Standardized and updated information take away the hassle of hunting for documents in the event of a scrutiny etc.
4. He can help by verifying the names of the first, second and third holder and thereby standardize the same in keeping with the client's needs. Some accounts may have minors as first holders and that causes the account to freeze the moment the minor ceases to be one. In case of demat accounts a fresh account needs to be opened when the minor turns adult. Many times the investors may have written the in names wrongly. If such things are brought to the notice of the client, he would always remain grateful to the good counsel received.
5. It is vital to have the names of nominees in all financial instruments. The adviser can play an important role in checking and rectifying the names as the case may be. Sometimes the names of parents may appear as a nominee which may need to be changed post marriage. Again in the case of separation, nomination in the name of the spouse would need to be changed. By ensuring that the nominations are in correct names, the advisor can ensure that the investor is worry free about inheritance matters.
6. He can check the details of the client in all the documents in terms of spelling etc and certify that they are correct. Such gaps could create a crisis at some point in future.
7. It is important to ascertain the various insurance products associated with debit and credit cards and help create the necessary documentation to ensure that they remain valid and available when required. It is also important to inform the investors about such insurance products because many times clients are not aware that they own such insurance products.
8. It is also imperative that the advisor helps the investor write his will and help register it so that after death, there is no dispute between children with respect to the family wealth. Leaving documents without documented bequest can lead to disputed and tedious legal procedures.
9. The advisor has a vital role to perform by advising an investor not to allow his tax planning to drive his investment planning. Tax planning and investment planning have different objectives and hence need to be seen distinctly without influencing one another. Thus the advisor can play a key role in making sure that his client is able to protect, consolidate, preserve and bequeath his assets in the manner that is most suitable to the client.
Most people need professional help in “Personal Finance” howsoever intelligent they may be. Personal finance management may be simple but certainly not easy. Both human psychology and lack of housekeeping can wreck havoc and make one's personal finance go awry. If the advisor focuses on this, he would be able to prevent the weathering of client’s his investments by several percentage points over his lifetime. This would certainly make a significant difference to the client's life in the long run. We therefore believe that the time for NextGen Advisory has come and a huge opportunity is knocking at our doors. Whether the advisor pays heed to the knocking or turns a deaf ear to it is a choice available to him.