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Meeting with your Banker! Lost in translation?

Updated: Nov 9



Photo credit: Chris Barbalis

So, on a very inspiring day, you probably made a firm resolution to manage your money, and in your determination, decided to naturally make an appointment with your banker or your relationship manager at your bank agency.

You had high hopes, thinking that you would be guided through the tangled tale of financial products, only to be bombarded with jargon that only a banker can express, and left with more perplexity.

Very often, you are presented with a large selection of funds (more likely in-house managed sicavs, right?), stocks, bonds, but rarely with the tools to understand the risks and constraints attached to them.

Why is it so that bankers take for granted that we know everything about finance?

Not only are we left alone in our lack of financial knowledge, but as women, we’re not taken seriously as investors.

Here’s what you need to know…

Firstly you need to consider the time horizon, that is the time you are willing to invest your money (money that should not be part of your emergency fund), this will determine the type of investment you can choose.

Secondly and most importantly, you need to determine the level of risk you are willing to take. This will both impact your performance potential but your loss potential as well in a very significant manner.

One other aspect to look at is fees (for funds for example, management fees, performance fees, tax), as this will reduce your net profit.

Thirdly you need to be clear about your investment goals: are you investing long term for your pension, or are you saving for a specific target (college funding for your kids) or for speculation (to make your money work for you)?

Do you know the difference between investing your money for a wealth preservation purpose and pure speculation?

I will develop these two different approaches in my next post.


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