Financial advisers look at investments as a way to achieving goals rather than chasing returns. Recently, at the second Wealth Management Conference in Mumbai, hosted by CFA Society India, Jean LP Brunel, managing principal of Brunel Associates LLC, a US-based firm that serves ultra-high net worth individuals and their advisers, said, “The single most important retirement goal that individuals have is that they don’t want to change their lifestyle, in a way that (my) neighbours will notice.”
While institutional investors can have a single major goal of maximizing returns, individuals can have multiple subjective goals with varying time horizons. Hence, the approach to investing also needs to be different and account for a lot more than just maximizing returns.
Brunel advocates adapting changing the approach to risk-return processes—when it comes to individual portfolios—rather than following traditional finance theories, which work better for institutional portfolios. Here is a look at this different approach towards determining the risk-return balance for individuals.
