Do you trust bankers to help you?

Would you rather manage your own hard-earned cash or leave the “experts” to do the job for you. CashBench provides a subjective take.

Look at the ad above and you’ll be treated to stunning imagery of how a bank can help to build cities & bridges, and realize dreams for people around the world. Banks, just like any other businesses, are keen to project a positive image where they can do the hard work for you and meet your needs. More than many other companies, banks also need your trust to remain a viable business. Banks can collapse overnight when bad news send their customers queuing up to take out their money. Do you trust your bankers to meet your needs?

Among our many needs is the need for money for a whole lot of things. For those more fortunate, we have some idle money sitting around and can usually do one of a few things. You may continue to let it sit around and do nothing, or use it to invest and hopefully see the money grow into a bigger pile. You can of course just spend it too.

The tricky question to ask when you want to invest your idle cash is this: Do you do it yourself, or leave it to the experts? CashBench shares some tips for your consideration.

1. How much are we talking about here?

If you have at least S$50,000, the doors to personalized advice opens up, if not, there doesn’t seem to be a real choice to start with. Banks and investment advisory firms becomes increasingly more willing to talk to you when you have a larger base to start out with. The richer you are, the more options there are. Banks will typically require you to put up at least S$200,000 in cash and other assets for them to start offering more personalized services. DBS Treasures is one example. However, non-bank outfits may be more accessible. DollarDex for example only require that you start off with S$50,000.

2. Can you afford to spend time keeping up with your investments?

Some of us takes a much higher interest in money matters and actively understand the risk and rewards of the different types of investments available. For example, if you invest in shares of companies, and makes it a point to regularly read and understand the financial health of your invested firms through their annual reports, press releases and also follow general market news, it’s more likely that you will be better off managing your own investments. For others, they may be unable or unwilling to set aside sufficient time to do so and here’s where professional bankers can help.

3. How aware you are of your own financial goals?

To most of us, the more money the better, it’s a given! But, to bankers, they think in terms of mid-term to long-term financial goals and objectives. The clearer you are of what you want, the better they can assist in meeting your goals. Some of us may want to have enough money to fund our children’s university education, others may want to have sufficient cash to meet retirement needs. Having a banker around will help you plan to meet these needs or at least determine how likely you are to achieve them. If you are however unclear of what you need, bankers will probably give some general suggestions that may not be as effective in meeting your real underlying needs.

4. Are you willing to stomach losses?

When you are offered personalised service, the options available are unlikely to be completely safe and guaranteed. Be super cautious when you are being offered products that have a guaranteed profit of X%. Very few investment products are 100% safe and there are often conditions attached. Bankers do not make a living by just offering you fixed deposits and savings accounts. If you will have sleepless nights when your original investment shrinks during market downturns, you should only go to a banker if you know he can offer low-risk or no-risk products.

5. Can you trust your banker?

The ultimate criterion here is the need for trust. Bankers knows it, and you know it deep down too. For bankers to effective, they need to know you well. Right at the start, they will have a lengthy questionnaire asking for personal details, preferences and needs. Good bankers will also continue to keep in touch with you and find out if your needs has changed. If you are not willing to share such details or hold back important information, it’s less likely that you’ll benefit from his services.