Live life your way after retirement: How to manage your funds based on needs

FOR many Singaporeans today, a common concern is planning for retirement and beyond. For Standard Chartered's regional head of wealth management (ASEAN, South Asia and Singapore), Eugene Puar, it is no different.

"One of my 'Tomorrow' goals is to grow my retirement nest egg, and hopefully, attain the freedom to pursue the things I want to do during retirement," he says. "This involves building a well-diversified portfolio that not only accounts for inflation, but also any potential risks that may derail my progress towards my retirement goal."

The "Tomorrow" goal Puar refers to is part of Standard Chartered's approach to breaking down financial goals based on when you'll need the funds: "Today, Tomorrow and Forever". Simply put, "Today" is about having the means to meet your near-term needs and lifestyle, "Tomorrow" looks at your future and ensures you have sufficient wealth to meet longer term aspirations, while "Forever" is the financial legacy you want to leave behind for future generations.

Achieving this may sound complex, but it is actually not, Puar explains. "The process is very much simplified when we follow our five guiding wealth principles - discipline, diversification, time in market, risks and returns, and protection." He shares more about how this approach makes it easier to manage and grow your wealth over time.

How does breaking down a person's financial needs into "Today, Tomorrow and Forever" help them more effectively reach their wealth goals?

Most of us would like to grow our wealth over time. To achieve this, it is important to have clearly defined goals that will anchor your investment decisions. It is also important to realise that your financial needs will change over time.

To help our clients better define their goals as they go through different stages of life, we have broken down their financial needs into the three tenets of "Today, Tomorrow and Forever". This approach helps support clients' wealth needs by distinguishing the assets intended to be used in the near term, from the assets that are to be used over the decades.

What makes this approach different from what other banks are offering? This approach is about providing financial advice based on a client's needs, and not pushing products. To do this, we employ our proprietary SC Wealth Select advisory framework, that focuses on three P's: purpose, principles and process.

This involves first understanding the purpose of wealth by taking the time to understand why clients are investing, so that they can make informed and responsible investment decisions to deliver on his "Today, Tomorrow and Forever" goals.

We then apply key wealth principles to guardrail their investment decisions; and finally follow a robust five-step advisory process focused on understanding clients' needs, tailoring a portfolio aligned to their preferences, goals and risk tolerance, and monitoring to ensure clients remain on track.

Why is this advisory process better suited to help clients meet their "Today, Tomorrow, and Forever" goals?

It prompts our relationship managers and clients to kickstart critical conversations over what they want to achieve financially at those three different stages, if they have not already done so. As for those who have already put some thought into the matter, and started making some plans, this framework guides the clients to periodically revisit their goals, and check if their current positioning best aligns them with those goals.

The "Forever" aspect of the approach involves issues such as legacy and the transfer of wealth to the next generation. In practice, how does this work?

We have a client in her 60s with two grown-up children. She runs a successful business with her husband and daughter, while her son is working as a musician and is self-sufficient. She draws a small salary from her business, and prefers to reinvest most of the profits back into their business. The couple also own investment properties for their retirement, and are still servicing a loan.

Her "Forever" goal is to transfer her wealth to her children, without passing on any liabilities. After going through our advisory process with her, we determined that the best way to help her achieve this was to structure an insurance plan that can offset all debts when she passes on.

We have also had clients in their late 60s or early 70s who wish to pass their wealth on to their grandchildren. In those cases, we proposed creating income plans under their children's and grandchildren's names, but with the policies assigned back to them. In this way, our clients can enjoy the monthly income payouts for their retirement, and when they pass on, the policies and benefits will be passed down to the next generation through a will.

For more information, visit Standard Chartered.