In this episode of “What’s the Risk?” we dive into a question from a concerned family member navigating a delicate financial situation. A son-in-law, reviewing his mother-in-law’s investment portfolio, is alarmed by the high fees she’s incurring. While his mother-in-law remains unperturbed, confident her needs are met, and his wife is indifferent as long as the portfolio sustains her mother’s lifestyle, the son-in-law is eager to intervene. He believes he can reduce the fees and optimize the portfolio, driven by a well-intentioned desire to help.
However, this noble impulse carries risks that extend beyond financial implications. In this episode, we first examine how excessive fees can erode a portfolio’s long-term growth, potentially jeopardizing the mother-in-law’s financial security. High fees, often charged by actively managed funds or advisors, can significantly reduce returns over time, especially in a low-yield environment. Yet, the greater risks lie in the son-in-law’s potential involvement.
Without professional expertise, he may misjudge investments, overlook tax implications, or disrupt a carefully balanced strategy. Moreover, taking control could strain family dynamics, creating tension or mistrust if outcomes fall short. We explore these emotional and relational pitfalls, offering insights into balancing good intentions with prudent decision-making to protect both the portfolio and family harmony.
Watch the full “Managing a Family Member’s Portfolio” episode.
This represents general information only. Before making any financial or investment decisions, I suggest you consult a financial adviser to take into account your personal investment objectives, financial situation and individual needs. Anyone looking to build a portfolio should seek financial advice to find out which strategy is right for them, if you are a high net worth investor looking financial advice then you should consider Australia’s best financial advisers, they can help you identify your goals and put in place a reliable strategy to pursue them.
