Often in the day-to-day rush, of earning a living & investing whatever one saves, a very important aspect gets missed out on - the unpredictability of our very existence.
Hence, the question "what-if something were to happen to me now, how do my loved ones get access to my investments, whom do they get in touch with, how do they even start ... " , gets very little consideration. Either we don't wish to discuss this subject, or we don't give it due importance.
Ideally, our wealth managers should be the ones who should ensure this aspect gets prioritized and dealt with, in the right earnest. But from what I have seen, it does not get much attention.
A few years ago, I came across a striking instance of an ultra-HNI with hundreds of crores in stocks and bonds who held their depository account in a single name, without a single nominee listed.
Ironically, the very Institution which made huge profits from this person during his lifetime, would have perforce turned their backs, post him.
Only in recent times, and largely due to regulatory pressure, this topic has got some attention. However, here too, the focus of the wealth management industry continues to be on products (wills / trusts) where there is money to be made. And the reason for that is the industry continues to be dominated by the commission-based approach, where the wealth manager earns only if there is an underlying product bought by the client.
On the other hand, this topic is one of the key focus areas for the fee-based wealth managers. As their focus is on covering every single aspect of their client's lives & their fee gets determined accordingly. Be it financial planning, investment planning, insurance planning, liability planning, and succession planning (what we, at Serenity Wealth refer to as what-if planning). Each of these subjects need deep conversations between the client & the wealth manager. It also necessitates subject matter understanding & well-defined templates / frameworks, at the wealth manager's end.
Hence, before one gets to instruments like wills/trusts, simple yet powerful concepts like (a) having an Asset Register & (b) ensuring the holding pattern is done well, get adequate focus.
The fee-based advisors see their role more as risk-managers, who need to keep asking "what can go wrong" & how to plan for those scenarios. This comes from a basic belief that returns are not in their control - that it is up to the markets and on the strategic asset allocation.
What is within control is how to protect our clients so that their hard-earned money does not get stuck, in case of any unforeseen eventuality.
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