One of my earliest client when I was starting in PAMI way back in 1995 was a lady who keeps telling me she is a conservative investor, she asked me which among the mutual funds we offer is the most appropriate for her
with this information, I promptly recommended our bond fund - a fund that invests primarily in high grade corporate bonds and government securities
I visited her in early 2020 just before the lockdown to give her an update, I happily reported that the 500,000 she initially invested in 1995 in the bond fund is now worth 1.3 million - a 166% GAIN!
Leaving her office a thought came to my mind, considering her long holding period (25 years), what if I recommended the equity fund instead?
Lesson learned : as financial advisors it is important that we ask all the appropriate questions during our interview, aside from knowing a client's risk preference, we should also try to find out the client's intended holding period among others, combine these information together to come up with a more market responsive financial advice
#acgadvice
No comments:
Post a Comment