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A client started his portfolio with Truemind 4 years ago. His portfolio was earlier managed by the wealth management team of a big MNC bank in India. Because of a long-standing relationship with the relationship manager at that bank, he moved only 50% of the portfolio to us.
A few days ago, I got his call informing me that he is going to liquidate the entire portfolio with the bank and move it to Truemind. He himself gave me two reasons, which brought a lot of satisfaction to me and what we have built.
His first reason was that in the last two years, the portfolio with the bank hardly generated any gains despite 80% in equity MFs. Truemind, on the other hand, generated 15% CAGR in the last two years with only 50% in equity MFs. He said, “Even though the relationship is there with the person in the bank, in the end returns are also important.”
The client reminded me that initially, when we recommended percentage allocation to equity, debt and Gold, he asked us why our equity allocation is comparatively less, but now he understands the reasons.
The second reason gave me a chuckle. He said, “Whenever the bank RM asked for a meeting, I used to get very stressed about what he was going to sell and what changes he would make in the portfolio. “I was always worried and unsure about the suggestions I received.”
He also told me about his experience with us. “In the case of Truemind, we never have to worry about this. Whatever additional money we generate, we call you to suggest allocations. We know, unlike the RMs at the bank, Truemind doesn’t get any commissions, and hence, paying a fee is totally worth it. It gives me a lot of peace of mind.”
From this conversation, I realised that the costs many investors pay for saving on fees to professional advisors or by dealing with distributors with commission targets include lower portfolio gains and a lack of financial peace of mind.
Financial peacefulness can only be achieved when you know that you will achieve your goals comfortably without any undue stress. Deciding to engage with an investment advisor based on a few basis points of fee difference is not worth it in the long term. What should matter the most are better risk-adjusted returns and peace of mind.
BTW, the below sketch of mine was made free of cost. And of course, I am not happy with the outcome 😀
Originally posted on LinkedIn: www.linkedin.com
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