"It helps to keep the beneficiaries and a well-wisher informed about your investments"
Mark Twain has often been quoted as saying -- "Everybody talks about the weather, but nobody does anything about it."
Now, replace the word 'weather' with 'record keeping' and you will come to know what I mean. There must be thousands of articles written on record-keeping, lots of preaching and teachings given by our elders on it. But, over a period of time and, to my surprise, many of my prospects, clients and friends have not done any record-keeping and even if they have, they are not in order. In layman's language, record-keeping is to know and keep track of all important documents. Now, let me explain why it is so important.
Being in the financial planning industry for over a decade, I have come across one of the most tragic and sad events of my life, which has compelled me to think very strongly about record-keeping.
One of my prospects' family suffered for not keeping records properly. Mr and Mrs VIP, a family of four, had settled in Dubai. Mr VIP was in his early 40s, wife in her late 30s and had a seven-year-old son and a three-year-old daughter.
In January 2006, as a routine, I started calling up all my prospects to greet them for the New Year and also fix up appointments.
When I called up Mr VIP, the receptionist at his office said he had passed away. The news was shocking, but it was more shocking to know that his wife, who was an educated lady, did not know anything of her husband's investments and savings. I wondered why Mr VIP hadn't shared his investment details with his wife. To make the matters worse, he hadn't kept his important financial documents in a designated place. Mr VIP's wife was facing the consequences of not keeping records. Hithero, a homemaker, now she had to work to meet her family's expenses. I advised her to check the post regularly, as banks, investments and insurance firms mostly correspond throughpostal services.
We also asked Mr VIP's friends whether they had done any investments/savings/insurance/bank account, etc together. (as collegues often invest together in lucrative portfolios).
One day, while we were checking the mail, we got hold of some important documents regarding a FCNR deposit amounting to $50,000, which was about to mature in a month's time.
Now, the wife had to arrange and post all the relevant documents regarding the FCNR to redeem it. At this juncture, I really felt the importance of teaching banking basics to all family members, including children.
Finally, we did manage to get the money, but with great difficulties.The whole situation would have been easier if Mr VIP had informed his wife and a well-wisher of the family about his investment details.
The reason why a third party has to be involved is, because, we cannot rule out the possibility of husband and wife dying together.
As a financial planner, I would advise the readers to start making a note of all the important papers such as bank account details, fixed deposits, mutual funds folio number, insurance policy number, property papers, jewellery bills, etc.
Keep all the original papers in proper order and at the right place. It should be a rough version of a will.
I also advise to keep updating it every six months. Keep all the papers in a place, which is easily accessible to your beneficiaries. If possible, give a copy in a sealed envelope to one of your relatives or a well-wisher, who will act as an executor after your death and help your beneficiaries get the money.
One good thing in this country is that direct taxation compels an individual to keep records for the tax authorities, if not for the wife or relatives.
Keeping a record of your possessions helps us to be disciplined and organised. This exercise will give you peace of mind.
The writer is a certified financial planner and full member of FPSBIndia and a qualified member of the Million Dollar Round Table inDubai, UAE. FPSB India relies on its members' prudence, competence, and ethical standards to have submitted this write up in good faith in theirpersonal respective capacities. The article and the views are those of the writer and do not represent those of FPSB India. Readers are advised to consult their professional financial planners for advice.