Private Client Group
| October 17, 2020
What are Private Client Group and how do they allocate assets?
If given a choice, would you prefer a
Ready-to-wear suit or a Bespoke one? Most of us will choose the latter because
of one simple reason, customization as per our needs. In the world of wealth
creation, such a professionally customized portfolio service is termed as
Private Client Group. The respective bank or professional advisory group offers
an exhaustive collection of research-based advisory services that are tailored
as per the client’s need. It is an exclusive service constructed to fulfill the
exceptional investing needs of privileged customers or high net worth
individuals having the capital of 25 lakhs and above.
The basket of investing funds can include
equity, derivatives, mutual funds, IPOs, or a combination of either asset
classes to take the best advantage of the opportunities in the market. The
special goals are achieved by optimal asset allocation which depends on two
Time: The prime most factor is to consider
the time frame within which the investor seeks to exit. If an investor has a
long-time horizon, they can opt for a higher potential return with probably the
higher risk. However, for a short-term investor, the investment choices have to
be evaluated based on market volatility.
Risk Tolerance: The risk tolerance factor
determines the extent to which the portfolio can take the risk. This can be
evaluated based on the investor’s economic/financial ability to tolerate risk
and their emotional/psychological ability to handle the unforeseen.
The major objective behind the asset allocation
is to combat any kind of losses arising from one asset class in the group with
another. In short, the portfolio of such superior clients is well-equipped to
handle risk in the form of a bear market or any sector-specific recession.