Iqbal Mohammed felt that the engineer in him was getting lost in the typical IT job he held for over 10 years when he decided to go his own way and focus on what he knows and loves best. Semnox Solutions Pvt. Ltd was born in 2008 and is a global revenue solutions provider for the entertainment industry. Even though he was confident of making a success of his business venture, he was not as sure that his financial life was on the right track.

While there was not much to save in the initial years of employment, once his finances stabilised and there was a surplus, like all young people, he gravitated towards the two asset classes with the most bragging rights: equity and real estate. His portfolio was a motley collection of products that were sold to him with no alignment to goals or needs. “There was a lot of needless activity in my portfolio with funds being moved from one product to another without any reason," said Iqbal.

He was perceptive enough to identify where he was going wrong: there was no disciplined approach to investing and the portfolio was skewed towards risky asset classes. “In hindsight, it feels as though the entire approach was short term. If some of my investments were held till date, I think there would have been tremendous gains on most of them." With the realisation of the errors came the feeling that his financial situation would be better served with professional management and that is when he got in touch with Naveen Julian Rego, registered investment advisor and certified financial planner.

Iqbal’s brief to Naveen was clear. He wanted to address the risks in the portfolio and set it on a growth path with focus on goals. Iqbal and his wife Sarwath want to provide the best possible education to their two children Sahim, 15, and Shahan, 11, and a retirement with no compromise on their comforts or desires. Iqbal and Sarwath want to give back to society too in a significant way and are still searching for a cause that speaks to them.

Rego did a thorough analysis of Iqbal’s holdings and classified the investments to give Iqbal a good perspective of the risks and shortcomings in the portfolio. “The lack of a coherent asset allocation in the portfolio and significant concentration in asset classes and securities was what struck me immediately," said Rego.

Rego also focused on de-risking the portfolio from the effects of a downturn in equity and real estate markets and bringing balance.

As a first step, Rego advised terminating a slew of Ulips that were not adding any value either to the protection needs or to the investment needs of the family. The next was to reduce the proportion of real estate and equity in the portfolio and to make allocations to debt to diversify the portfolio and protect downside risks. Since exiting real estate cannot be done at short notice, it was proposed to be done in a phased manner as was the exit from ESOPs to reduce the concentration of equity allocation in the portfolio to a particular security. Rego created a model portfolio that was suited to Iqbal’s financial needs and set in motion a long-term systematic investment that would get Iqbal to his desired allocation.

A good income and prudent spending habits of Sarwath and Iqbal meant that the household did not have to cut back on current expenses to find the savings for the goals. Mutual funds are the preferred investment vehicle for equity and debt investments, though there are some direct equity investments being made too.

“He spoke less about returns and more about building wealth over a long run by appropriate asset allocation. It was simple to understand and yet had the maturity and wisdom," said Iqbal about Rego’s approach. All investment decisions are mutually decided between them after discussions in two reviews each year.

“It is important to get good financial advice early in life and someone in the family can play the role initially," said Iqbal. “Knowing that my finances are in professional hands gave me peace of mind. I feel secure in the hands of an able advisor," said Iqbal.

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