Srikanth Matrubai, SriKavi Wealth Advisors
I met a long lost college friend in a coffee shop. Over a few cups of coffee, we updated each other on our lives. When I told him that I was in the advisory profession, he became very keen that I go through his portfolio. For this, we set up a meeting at his office for a later date. As I started reviewing his portfolio, I found that he had a good blend of blue chip company stocks and FDs. I also discovered that he was losing a lot of money on his life insurance policy. He had taken an endowment cover of Rs. 50 lakh and was paying an annual premium of Rs 10 lakh. His insurance agent had told him that this plan of insurance would be an investment.
I made him realize that he had taken the wrong decision and to avoid further loss, I asked him to surrender the policy. Though he could not recover his past premium amounts but he could definitely avoid future losses. My next action was to get him the same cover of Rs. 50 lakh for the premium of Rs. 15,000 annually through a term plan. I also made him get another term cover of Rs. 50 lakhs with a premium of Rs. 25,000 to ensure that he was adequately covered.
So now, he has 2 term plans in his kitty where he pays a total premium of Rs. 40,000, thus saving him Rs. 9.6 lakh as he was earlier paying Rs 10 lakh for a single cover. I ensured that the saved premium is invested in a mix of equity and balance funds since he had a long-term horizon.
Later, I got many HNI referrals from him. This was one of my biggest client success stories.
Nisreen Mamaji, Moneyworks Financial Advisors
A divorced working woman approached me a few years back. Since her ex-husband was not financially settled, she was not receiving any alimony or monthly maintenance from him. With her salary of Rs. 50,000 she was not able to save since she had to take care of her two teenage daughters. Fortunately, she had life insurance policies but the maturity date was a year later.
I advised her to save, no matter how small the amount and invest in debt funds. This continued for a while when finally we had a lump sum amount to invest which we put in an ELSS scheme with a dividend option. Later, when she got the maturity amount from the life insurance policy, I told her to invest immediately in a mix of balanced and diversified funds.
Though her initial years were a bit rough, we managed to sail through. In order to buy a new house, she took the loan against her existing property. With a combination of increase in her income and returns on mutual funds, she repaid her instalments successfully.
She is the proud owner of a flat. Her elder daughter is now working and has started her own SIP. They still don’t live a lavish lifestyle but are far more comfortable than what they were a few years back. With proper financial planning and handholding, our relationship strengthened both professionally and emotionally.