The Head of Wealth Management at the Standard Chartered Bank Ghana Limited, Setor Quashigah, has advised the investing public to assess their risk-appetite before signing up for any investment product.
She said, more often than not, people sign up for investment products without first checking their risk profile, and are found wanting when investment outcomes deviate from their expectations.
Mrs. Quashigah, speaking on the subject ‘Investment and Wealth Creation’, said: “We found out during the financial crisis that people, who probably were risk-averse, had put their monies in high-risk instruments.
“Everyone who wants to invest must check their risk-appetite; for example, how much drawdowns one can accommodate when markets get volatile? Because the higher an investor’s investment return expectations, the more likely they are to invest in riskier instruments,” she noted.
She said this is why at Standard Chartered, before a client signs up for any investment package, it is mandatory to first check the customer’s risk-appetite. “At Standard Chartered, even before we start investing for you, we will check your risk-appetite; and after checking it, we will also make sure the product we have displayed matches that risk-appetite,” she stated.
Investments are great
Mrs. Quashigah also noted that investments are great as they are among the ways of creating wealth, and therefore urged the public to invest. “Investment is great, and it should not be just the typical Treasury bills all the time but other investment products as well. You should be able to stretch your money or make it work for you even while asleep.
“At Standard Chartered, we have lots of other investment products in both foreign and local currency. We also have both local currency bonds and foreign currency bonds which our customers can invest in,” she said.
Mrs. Quashigah also admitted that the levels understanding in financial market investing are pretty low in the country – something, she said, that has contributed to people taking investment decisions which are not in their best interest.
She said this is the reason Standard Chartered continues to engage the market actively through financial seminars and other face-to-face means; such as the bank’s trained relationship managers and wealth advisors going out to meet and engage clients on investments.
She said the bank also organises financial seminars to guide clients through their investment journey. She mentioned that financial literacy is one of the bank’s community engagement initiatives, wherein staff volunteer to take young people through financial education programmes.
“There is still lots of room for improvement, but it is a journey we have started and we will continue to engage our clients and non-clients about financial services,” she stated.
Confidence in sector
Commenting on how to boost confidence in the investment environment, she said: “We are trying to win confidence back into the sector by engaging clients about opportunities in the market and the need for them to continue believing in the market.
“The good news is that people who lost money are recovering because some payments are being made; and these people will not do anything different as they still want to keep their monies somewhere, and we encourage them to come to Standard Chartered,” she said.
Patronise government securities
The Head of Wealth Management also suggested that the investing public should consider adding governments of Ghana local currency bonds and Eurobonds. “We have a long list of securities, both local currency and foreign currency. For the local ones, they are mainly government bonds – the ESLA bonds and cocoa notes.”
She said the country’s Eurobonds are very attractive, and therefore urged the public to approach Standard Chartered to find out how they can invest in them.
“There is a lot of confidence in the country out there, and this is reflected in the massive oversubscription of our Eurobond issuances by investors globally. I am therefore encouraging Ghanaian investors who have appetite for bonds to consider diversifying their portfolios with our highly demanded Ghana Eurobonds,” she noted.
She said favurable inflation analyses and relative strength of the cedi against major trading currencies so far this year make real returns on local currency bonds attractive, and asked especially people who are only invested in Treasury bills to stretch themselves to the longer ends of the yield curve to maximise their returns.
“I encourage every Ghanaian who wants to invest to maintain a well-diversified portfolio by buying securities with different maturities – some in local and some in foreign currencies if possible, in order to avoid exposing themselves to the credit of one or few institutions,” she stated.