How to use private bankers

In some countries, financial advisers or private bankers can advise their wealthy clients on tax and estate planning, so that they can minimize the tax payable on their income or on the estate that is transferred to the dependants.

It is difficult for these advisers to help their clients in market timing or stock selection - as this is speculation and a zero-sum game. In fact, after allowing for the cost of transactions and fees, it is a negative sum game for the clients.

The best way to get a good yield on the investments is to invest in an index fund and to invest for the long term - to average out the good and bad years. There is little that the advisers can help the client to achieve a better yield.

I have seen many cases where the investor who had relied on the financial adviser to pick the manage the investments on their behalf - only to be disappointed with the bad results. The financial adviser probably did their best, but when the market is volatile, some investors will be at the wrong end, and the results can be disastrous. For each winner, there will be a loser - and after deducting fees and expenses, most investors (actually speculators) will be worse off.

To avoid speculation, you should learn how to invest for the long term. Read my book on financial planning (www.tankinlian.com/ishop) or attend the financial planning talk organized by FISCA (www.easysearch.sg/fisca).