The overnight collapse of the Silicon Valley Bank (SVB), a bank servicing venture capital companies and early-stage businesses, and the stock crash of Credit Suisse, the second largest lender in Switzerland, caused widespread concern among investors and had a ripple effect on markets all over the world by causing bank stocks in the US, Europe, and Asia to crash.
The SVB and Credit Suisse struggles highlight the risks associated with the “one-stop” banking model that encourages customers to put all their financial assets and liabilities under one roof, including loans, corporate banking, and wealth management. Unfortunately, many families and business owners compromised the fundamental security of their assets by adopting this paradigm in favor of the alleged ease of working with a single organization.
While the crisis is concerning, maintaining a proper asset allocation with an independent financial advisor can help investors weather similar storms. Below are a few strategies that protect investors’ assets and wealth:
Choose a wealth manager that can serve your goals, independently from the lending banks. A good wealth manager assesses your financial objectives and risk appetite, then proposes a holistic investment strategy to protect and grow your wealth.
Maintain a proper asset allocation in accordance with your risk profile. No matter how markets are performing, investors must always maintain the right asset allocation for their level of risk tolerance, especially if they have concentrated portfolios or positions.
Beware of banks that offer high interest rates on your deposits. This may reflect liquidity issues and depositors may lose their wealth should the bank fail.
Even in an increasingly unstable world, you can still preserve and grow your wealth by diversifying your investments over assets, geographies and sectors, with the help of an independent financial advisor that aligns financial strategies with your goals.
The Family Office has helped its clients preserve and grow over $2 billion of wealth since 2004. We customize a strategic asset allocation mix according to the risk tolerance and time horizon of each investor. Our global reach and scale help you access asset classes that were once available only to the largest investors, such as private markets investments.
Call us today to learn more about protecting your wealth and diversifying away from the one-stop-shop banking model.
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