Wealth management

Can I add an additional amount to my Wealth Management Portfolio?

You can add an additional amount to the Wealth Management Portfolio. You can transfer this amount yourself via the secure website. Select the Wealth Management Portfolio via ‘My investments’ and click the ‘Add additional amount’ button at the top of your Wealth Management Portfolio overview. The minimum amount is € 5.000.

How can I benefit from wealth management?

Through financial planning, you can increase the likelihood of achieving your financial goals within your preferred time horizon. In order to make the best use of our wealth management tools, you will need to be realistic about your goals and resources and to update your plan on a regular basis to ensure that it takes into account changes to your personal or financial circumstances and to your risk preferences. In today’s turbulent economic environment, financial planning makes even more sense as it allows you to create a long term plan to face future events in a more predictable way.

What is a risk profile?

An investment plan is the starting point for the management of your wealth. It is therefore important that you invest your capital in a way that suits your personal and financial situation. By setting out your risk profile, you exercise control on how much risk you are willing and/or able to take and avoid investments that are not suitable or appropriate for you.

My portfolio has fallen in value; why don’t you take any action?

The portfolios are designed as long-term investments and we will only react to short-term drawdowns in exceptional circumstances. At MeDirect, we believe that the best way to protect against future volatility and capital losses is to diversify, or spread the risk of the portfolio, across multiple types of investments. As market conditions change, so does the performance of this diverse range of asset classes, and this can help protect investments. We also believe in keeping turnover low and investing for long-term. Short-term trading involves market timing which is extremely difficult to do. Market timing requires two decisions, when to sell and more importantly, when to get back in. Very few investors, if any, have been able to consistently deliver a successful market timing strategy. When markets turn, they turn quickly, and a recent study by Fidelity Worldwide Investment shows the dangers of missing out on market bounces. An investor in global equities (MSCI World) would have generated a return of 68.95% between 31 December 2002 and 31 December 2012. Missing the market’s best 10 days over this ten-year period would have led to a return of -4.64%, while missing the best 20 days would have led to a loss of 32.19%. Our portfolios are built around the principle of ‘buy & hold’ as we look to maximise an investor’s time in the market, rather than try to time the market.

My portfolio is not performing very well while I have a portfolio at another bank which has been performing a lot better over exact same period. Why is that?

It is often too simplistic to compare the returns of two portfolios without undertaking an analysis on their risk profiles and investment universe. At the very least, an investor should look at the equity weight of the two solutions, however other factors such as currency, credit rating, stock concentration, volatility and usage of derivatives should also be considered when comparing the performance of two portfolios. The MeDirect portfolios are designed to offer the optimal investment profile for a given level of risk and as such should be measured against their custom benchmarks and Morningstar peer group averages.

How are these transactions executed for my Wealth Management Portfolio?

If you would like to add an additional amount, this amount will be composed in accordance with your pre-established investor profile, and not according to the current composition of your Wealth Management Portfolio. Because of the market conditions, it is possible that the funds in your portfolio have, meanwhile, a different weighting. The big advantage is that less operations are needed during the rebalancing every quarter. This way, you pay less tax when you sell. If you would like to withdraw or add an additional amount, this amount will be composed according to the current weightings of the funds in the Wealth Management Portfolio at that moment. The percentage distribution per fund is rounded down, without decimals. For example, 9,63% will become 9%. The remaining amount will then be added to the largest fund in the Wealth Management Portfolio in order to always make up a total of 100%. When you have confirmed the order, it is sent for processing. You must take into account that funds do not always have the same processing time. When all orders have been processed, you will receive a confirmation of execution via the mailbox of the secured website. The amount will be paid into your cash account.

How can I put my financial plan into action?

After opening an account with MeDirect, you can invest in the portfolio we proposed after you entered all the information. You have to make sure the balance on your MeDirect Cash Account is sufficient. You can then track the performance of your recommended portfolio via the secure site.