Navigating investment opportunities

Bavina Sookdeo

In light of the evolving post-covid19 investment climate, many people are looking to bolster their financial portfolios and make informed investment decisions.

Business Day spoke to several institutions on their financial products and services to help people achieve their investment goals and secure their financial future.

Additionally, the financial institutions were asked how they are embracing digital transformation, upcoming innovations, technologies and changes in service delivery.

The Unit Trust Corporation (UTC), a key player in the country's financial landscape, emphasised the importance of sustainable financial planning.

With the prospect of some people receiving backpay and potentially depositing large sums, the question of how to effectively manage newfound wealth arises.

UTC offered its advice on how to manage this.

"If you have any high-interest debt, such as credit-card balances or personal loans, consider using a portion of your lump sum to pay it off. This can provide an immediate return on investment by saving you money on interest payments. Establish a budget to ensure you are managing your expenses effectively. Knowing your spending habits can help you allocate your lump sum wisely and avoid overspending," UTC said.

UTC added that investments should be based on one's financial goals and risk tolerance.

"A good long-term goal is saving for your children’s future education or your own retirement. Both these goals require a medium- to long-term investment vehicle with a growth component. It is important to be disciplined and leave the funds invested."

In assessing the investing landscape locally, UTC remains optimistic about the market's potential.

"The recent listing of the $400 million National Investment Fund (NIF2) bond on the TT Stock Exchange further underscores the promising future of the investing landscape. With an impressive individual investor oversubscription rate of 184 per cent, this event highlights a robust investor appetite and confidence in the local market. Such enthusiasm bodes well for capital market development, paving the way for increased participation and accessibility for investors."

Market volatility, which refers to the constant changes in the prices of investment options like stocks and bonds, influenced by factors such as economic fluctuations and global events, can significantly impact investment outcomes. Additionally, geopolitical risks, including trade tensions and regulatory changes, may add another layer of complexity to investment decisions.

Staying informed about global economic trends and developments is equally vital for effective risk management. By monitoring macroeconomic indicators, geopolitical events and market sentiment, investors can anticipate potential risks and opportunities, allowing for timely adjustments to investment strategies.

"Overall, while specific outcomes are uncertain, staying informed and adapting to changing market conditions will be essential for investors to capitalise on opportunities and mitigate risks in the future," UTC said.

Asked how the institution is embracing digital transformation, UTC said, "This is something we are very excited about. Digital transformation enables us to not only enhance internal efficiency but also extend these improvements to customers, thus providing them with a better experience."

A new technology platform implemented in 2022 allows for a paperless environment, new ATM services, contactless customer service via digital channels, aligned product offerings, re-engineered business processes and rigorous adoption of global regulatory practices.

UTC said digital enablement is fundamental to its growth, and hence keen focus is being placed on traditional and emerging digital trends and how they will drive product and service innovation.

In today's digital age, safeguarding customer financial transactions and personal information is paramount. UTC said it maintains a comprehensive security system, implementing various layers of cyber security to protect customer information and financial transactions. Proactive monitoring of the cyber threat landscape enables UTC to adapt and respond appropriately to emerging threats and risks, ensuring the integrity and confidentiality of customer data.

Scotiabank also provides an array of financial products and services. One of the primary avenues for investment is through term deposits, offering risk-free investments with guaranteed interest rates and principal protection. Whether saving for long-term goals like retirement or short-term endeavours such as buying a home or a car, term deposits offer flexibility to meet various financial needs.

Another prominent investment avenue offered by Scotiabank is mutual funds. These are professionally managed investments that pool funds from multiple investors to buy a variety of securities such as stocks and bonds.

"Scotiabank’s range of mutual funds can help you achieve your future goals so you can enjoy today without worrying about tomorrow," said Jarod Perryman, director, wealth at Scotiabank TT and managing director of ScotiaLife TT.

"Both US and TT-denominated mutual funds are available, depending on your investment objective, risk level and initial investment amount. Our qualified investment specialists are available to discuss your needs and help you determine which solution is best for you," Perryman said.

Additionally, Scotia Insurance offers customised solutions to help individuals plan for their financial future.

"We have several insurance solutions available. For example, Scotia Elevate is designed for people who are seeking insurance for the first time and those looking for enhanced benefits to complement their existing policies. Customers can continue to protect their loved ones while investing towards important financial goals, such as purchasing a home or funding their child’s education," said Perryman.

In 2023, the bank enhanced the promotion of its mutual funds and insurance offerings via its social media platforms, with advisers sharing insight and guidance on the various products and services.

Asked how the bank stays ahead of potential cyber security threats, Perryman said, "At Scotiabank, we're committed to keeping our clients’ accounts and financial information safe and secure. We do so through a number of robust measures: data encryption, multi-factor authentication, access restrictions, hardware and software currency reviews, transaction and security alerts, real-time notifications of account activity, enhanced card monitoring and controls and regular communication with clients."

Scotiabank says it is embracing digital transformation to enhance accessibility and convenience for its clients.

"We continue to invest heavily in technology and processes designed to meet the current and future needs of our clients," said Gayle Pazos, senior VP and managing director of Scotiabank TT.

During 2023, Scotiabank continued its digital focus on how banking can be made easier and simpler for customers.

“Seventy-two per cent of our clients have enrolled in our digital platforms, with digital adoption at a record 54 per cent. We saw digital transactions increasing by 2.8 million. These metrics are a true testament to our clients’ confidence in our digital platforms," Pazos said.

Sana Ragbir, general manager of retail and commercial banking at First Citizens Bank, said, "First Citizens offers a number of options to meet our customers’ needs and risk appetite."

The most common, she explained, are savings accounts which are structured to pay higher interest rates once higher balances are achieved.

"This serves to encourage customers to save more," Ragbir said. "Another option would be mutual fund accounts where customers can invest small amounts of money each month at attractive rates of return through three TT-dollar-denominated accounts –Abercrombie, El Tucuche and Immortelle – and one US-dollar-denominated account, Paria."

Additionally, through its brokerage services, First Citizens offers stock brokerage accounts to allow customers to invest in the TT Stock Exchange with little to nominal starting balances.

“For customers who can accept more risks and have funds in international currencies, they can access our international trading platform, through our Global Investment Solutions and build international stock and bond portfolios. Customers who meet a certain threshold value can also access our managed account products where their portfolio will be customised based on their ability to take risks and their financial goals and targets," Ragbir explained.

As for educational and advisory services, Ragbir said strong emphasis is placed on providing educational resources, advisory services and personalised consultations to empower customers in making informed financial decisions. She said customers can receive financial advice from private and personal banking officers at branches and investment associates at investment services offices. Additionally, the bank's website offers information to guide customers on their financial journey.

While mutual funds may be unfamiliar territory for some, Ragbir said they are explained in detail through presentations at various events and an informative website.

She said First Citizens ensures accessibility and understanding by simplifying the account-opening process, similar to regular savings or chequing accounts.

As for how it's embracing digital transformation and enhancing accessibility, Ragbir said, "Our approach is to educate our customers by showing them how to use the easy banking digital channels and ensuring that they are comfortable.

"However, even with digital transformation, it is important for us to be there for our customers and so we will continue to have physical branches and our staff available for all of our customers as they need us."

Asked if customers can tailor their investment or savings plans based on their specific requirements, she said, "All customers have the flexibility, of course with the financial advice of our team, to choose the right mix of products from our suite of products and services that will meet their financial goals.

"For those customers who meet a minimum dollar balance, they may qualify for one of our customised investment portfolios."

Rhand Credit Union, another stalwart in the local financial landscape, said it stands ready to guide its members through a range of financial solutions tailored to diverse needs and goals.

The credit union actively engages with the community to promote financial literacy and awareness.

The institution’s marketing team explained, "Financial co-operatives (credit unions) like RHAND are guided by seven co-operative principles, the fifth of which is 'education, training and information.'"

This means that it emphasises educational campaigns to demystify the financial options of saving, borrowing and investment.

Most recently, Rhand concluded a pilot online seminar, which targeted its millennial members and the public, on financial literacy.

"At Rhand, we pride ourselves on our commitment to understanding and addressing the unique financial needs and goals of each member. Our approach is rooted in providing customisable financial solutions on a case-by-case basis. We recognise that one size does not fit all when it comes to financial planning and our dedicated team works closely with members to tailor solutions that align with their individual circumstances," it said.

While not all Rhand’s savings or investment products are customisable, its flex deposit is tiered to allow access for a much wider cross-section of the public.

For younger members, Rhand focuses on initiatives to support the education of youths and working Gen Zs.

“For those in middle adulthood, our credit union offers a range of lending products, including home loans, car loans, and education loans. The supporting educational content acknowledges the various life stages and financial milestones necessary for building personal wealth as well as the need for the right knowledge to make the most of the journey."

On security measures, Rhand said, "We’re always monitoring and upgrading our security protocols and real-time fraud detection systems to ensure the security of financial transactions. We prioritise member security through robust encryption protocols, secure servers and regular stress tests and security audits. Additionally, there are strict privacy policies which govern the handling of customers’ personal and financial information."

Rhand also said it seeks to enhance accessibility and convenience for its members. Enhanced mobile apps, online account management systems and user-friendly digital interfaces form part of its digital strategy.

Moreover, Rhand has partnered with local and international agencies to develop a digital wallet platform for the local credit union movement, reflecting its commitment to innovation and member-centric services. Anticipated innovations include advanced mobile banking features, AI-driven financial advice and financial transactions and improved online service platforms.