A model story from practice. This story brings together several situations we deal with repeatedly. It is not about one particular client.
In the folder her father left there were fourteen statements and one business card.
The client was around forty, had two children and inherited investment assets in the range of fifteen to thirty million crowns from her father. She knew he had invested over many years. How the portfolio was built, and why he owned the individual investments, they had barely discussed.
She said what worried her most within the first few minutes: “I do not want to ruin something my father spent his whole life building.”
The assets were spread across several institutions. Some of the investments she understood; with others, the statement did not even make clear what they actually invested in. Some had been set up many years earlier, others added along the way.
So for the first few weeks we bought nothing new and did not start rebuilding the portfolio.
First we needed to find out what she had actually inherited.
Understand first. Decide after that.
For each investment we went through its structure, costs, liquidity, currency and regional exposure, and risk. We also wanted to know where the individual positions overlapped and whether several different products were in fact delivering very similar exposure.
When the wealth sits in several countries, the same review also covers the currency the client will need the money in and how portable the whole setup is, which we go through in investing in the Czech Republic as an expat.
Gradually, the fourteen statements turned into one clear picture of the assets. And with it came an important finding.
The portfolio was not badly built. It was built for someone else.
For a person at a different stage of life, with a different investment horizon, different experience and a different idea of what their capital is for.
The fact that the strategy worked well for her father did not mean his daughter should take it over unchanged.
Inheritance transfers the assets. The strategy has to be thought through again.
Individual funds, shares or bonds do not change when the owner changes. What changes is the person the portfolio is meant to work for.
The client had her own income, other assets, two children, a different horizon and a different attitude to risk from her father.
So we did not start building the portfolio from scratch. For each part of it we first asked whether it also makes sense for the new owner.
Some investments fitted the new strategy unchanged. In others we adjusted the weight. And part of the portfolio needed its structure changed to match the client’s situation and her long horizon better.
The result was not a new Melior Invest portfolio. The result was the client’s portfolio.
Part of what it holds came from her father’s decisions, part we adjusted over time. What now connects all of it is a strategy built around who owns the assets today and what they expect from them in future.
Not everything old has to go
This was one of the most important moments of the whole case.
Several investments we left exactly as they were. Their structure and costs made sense and fitted the new strategy well.
In others we found overlap. The portfolio was spread across several institutions and at first sight looked well diversified. On closer inspection, some of the products delivered very similar exposure.
So we reduced the number of institutions step by step.
The point was not to get everything into one place. The point was to remove needless complexity and keep a structure in which every part has a reason to be there.
What we did not do, and why
We did not rebuild the portfolio from the ground up simply because it had changed owner. For each investment we first wanted to know what it actually does in the portfolio and whether it makes sense for the client.
We also did not move all the assets to one institution just to simplify the paperwork. Several accounts or providers are not a problem in themselves. The problem starts when it is not clear why the individual parts exist and what they add to the overall strategy.
And we did not rush the decisions. The client did not need to do something with the inheritance as quickly as possible. She needed to get an overview first and understand what she had taken on.
What changed
She no longer sees the portfolio as fourteen statements left by her father.
She has her own investment strategy and understands why some investments stayed, why we adjusted others and why some left the portfolio over time.
And she changed one more thing. She started talking about investing with her children.
Taking on assets she did not understand at first showed her that one day she does not want to hand the next generation only statements, contracts and passwords. She wants them to know the context as well, that is why the individual decisions were made and what the assets are for.
What to take from this if you have inherited investment assets
- The first step does not have to be a change. First you need to know what you have actually taken on and how the individual parts work.
- A good portfolio need not suit its new owner. An investment strategy belongs to a particular person, their goals, their horizon and their attitude to risk.
- More funds and accounts do not automatically mean better diversification. What matters is finding out what the individual investments actually hold and where they overlap.
- There is no need to change everything. Some inherited investments may be worth adjusting. Leaving them exactly as they are can be just as good a decision.
- It is worth passing on the context along with the assets. It helps the next generation to know not only what they own, but also why.
Inheriting a portfolio does not mean inheriting the strategy of the person who created it. The new strategy has to fit whoever owns the assets today.
