Wealth Management Blog

Thoughts on Wealth Management for 2013

Posted by Shalom Cohen on Wed, Apr 24, 2013 @ 08:04 AM

In today’s challenging investing climate, people are understandably anxious. Uncertainty is about the only thing markets seem to deliver with any consistency.

managing money imageBut even so, wealth managers can set themselves apart by offering proactive and insightful guidance to clients and investing in the skills that nurture long-term relationships.

The main focus points in 2013 are:

The stability of the financial institutions

The experience of the last few years has shown that the size of a financial institution is no indication of its stability. Banks and investment houses both in the U.S and Europe have gone into bankruptcy or have needed massive government aid to keep their head above water. The first and most importing stage , when looking to enter a wealth management relationship , is to verify the stability of the financial Institution.

Fixing the level of risk that one is willing to take

In order to find the financial instruments best suited to the client it is essential for the wealth manger to determine the risk profile and capacity of the client. Through a series of carefully phrased questions the manager gauges the level of risk that the client wishes to take with his wealth.


The process of building a portfolio is called asset allocation.  In the most basic form, asset allocation is simply spreading your portfolio between 3 basic asset classes:  cash, bonds and stocks.The world has gotten a little more complicated and now each asset class has a variety of choice.  For example, with bonds, you can have government bonds, corporate bonds, high yield bonds, real-return bonds, short bonds, long bonds and even junk bonds.

On the stock side you have access to different parts of the world like US, Canada ,Europe, Asia and emerging markets. You can focus on specific sectors like health care, technology, gold, resource and much more.

Especially in the volatile climate that presently exists it is advisable ,within the framework of the risk profile ,to diversify ones investments to include various currencies , countries and investment tools.

Being ready for any scenario

Recent financial history has been full of events that happen quickly and are mostly unexpected .Whether it is a fiscal cliff, slowdown in world growth ,inflationary pressures, bankruptcy or a sudden turnaround in world markets one wants to be prepared. Since it is difficult to foresee these events one has to be ready for any scenario. By expert asset allocation the wealth manager can advise the client to adapt the portfolio to the events in real time.

Ensure that your financial planning is properly aligned with your life's plans

We're living much longer. This is good news, but it can strain your finances. People spend more time in retirement than in the past. Pension funds only cover a part of the last salary earned. You need to take action if you want to avoid the risk of a liquidity squeeze. The earlier you set a budget and savings targets for yourself, the more freedom you'll have to enjoy your retirement.

To learn more, read about how and why you should be investing your wealth in 2013. 

Topics: Wealth Management, Private Banking