Asset management: the five most important steps

Many women feel a great need to have a stable financial situation in the long term – and that should indeed be the case. After all, the life expectancy of women in Switzerland is around 85.2 years – and rising. The UBS Investor Watch study nevertheless showed that women only marginally concern themselves with long-term asset decisions and, what’s more, are happy to leave such matters to their partners. But the subject is not actually all that complex, and the main thing is to simply get started. As a guide, asset management can be divided into three basic strategies:

1. Liquidity – for the next 3 years: the aim here is to cover short-term expenses whilst keeping a contingency fund. Make sure that you have sufficient liquid funds available for this purpose.
2. Longevity – from 4 years to a lifetime: with this strategy, it’s important to plan your long-term needs and your retirement. Ensure that you can maintain your standard of living in the long term.
3. Transmission – during a lifetime and beyond: decide how your assets can one day improve the lives of your family and others. Make sure that your assets will be passed on as you wish.
   

Being actively involved in your assets and their management is essential for a stable financial future. To find the right solution for your needs, the first step is to think about your financial goals and requirements. Asset accumulation does not begin in the world of equities, bonds and investment funds. It’s much more important to first address the issue of money. Women can take these five steps into account for their financial future before investing:

1. Take responsibility for your money: discuss how to handle money – from daily expenses to long-term investments. Change your attitude towards money matters and make a conscious decision to focus more on assets and financial investments from now on.
2. Define your goals: what do you want to use your money for? Are you planning any major expenditure in the near future? How do you see life in the near but also in the more distant future? What standard of living would you like to have? Use the three strategies described above. Defining personal and financial goals helps to structure your own assets and to choose different strategies for different goals.
3. Gain an overview: an integral asset management concept includes obtaining a clear picture of your own income and expenditure as well as of all the income and expenditure of your family or household. Even a simple Excel spreadsheet can help here. Realistic planning, including a reserve for emergencies and unexpected expenses, is the key to financial freedom. If you have a clear picture of your financial situation, you can also use your money to achieve your goals.
4. Make provision for the future: even if retirement still seems a long way off, it’s important to think about it early on. Take care of your pension planning at an early stage, for example by means of pillar 3a. Do you dream of taking early retirement? Then a pension fund purchase could be an attractive option to counteract the missing contribution years due to early retirement. And having your pillar 3a retirement assets in different accounts and withdrawing them in stages over several years will enable you to bridge your income gap whilst saving taxes at the same time. Another essential question is whether you would like to have your retirement capital paid out in one go or draw a pension for the rest of your life. These and many other aspects need to be considered at an early stage, because the sooner you start, the more assets you will have available in old age. The UBS Pension Calculator and the UBS page on pension planning can help.
5. Don’t just save, invest: do you have goals, a budget, a retirement plan and money in your savings account? Then you have successfully embarked on the path to long-term asset accumulation. Now it’s time to focus on investing. Because anyone who invests money in the long term can also benefit in the long term. It takes three pillars to invest successfully: analysis, strategy and discipline. Work out for yourself what kind of investment is right for you. An introduction to the topic can be found in the brochure “What does it take to invest successfully?” 
   

Many women put off the topic of financial planning. But you don’t have to be a professional investor to make smart decisions. It’s worth taking the time now to look at financial objectives and various investment options. Particularly when it comes to financial investments, more stable returns can usually be achieved with a long-term investment horizon – and this is especially advantageous for retirement planning. And you don’t have to go down this road alone: talk to your client advisor about these issues.