Financial planning key to weathering economic storm

Written by  //  June 12, 2015  //  Banking, Financial District  //  No comments

Juan Guerrero-Preston, executive vice president of Banco Popular’s Financial Services and Insurance Group.

Although the island’s economy is facing one of its most difficult moments, it is still possible to weather the storm with proper financial planning, executives from Banco Popular’s securities and insurance divisions said Thursday.

“The management of personal finances has changed a lot since the 80s. At that time, people made their investments mainly in brokerage houses, where a securities broker worked with them,” said Juan Guerrero-Preston, executive vice president of Banco Popular’s Financial Services and Insurance Group.

“When we decided to develop the offer for our customers, we did so based on the concept of financial planning, because we believed that customers were not getting a complete advice about their financial situation,” he said during a meeting with members of the media to mark three milestones for the bank — the the 20th, 15th and 5th anniversaries of Popular Securities, Popular Insurance and Popular One, respectively.

After decades offering investment tools, Banco Popular launched Popular One in 2010 to integrate banking, insurance and financial planning services under one roof. The division houses Wealth Management, Popular Securities and Popular Insurance.

“The idea was to offer a more complete advisory service to clients. Since our establishment, we’ve been launching new products, especially in asset management, making adjustments and learning a lot along the way,” he said.

Although there were initial “doubts and resistance”, over time Popular Securities has assembled different teams and currently offers advice and sells products and services through a team of some 100 professionals with expertise in various areas such as banking, investment, accounting, legal, insurance, among others, he said.

“This kind of platform was not there, and was been key to differentiate ourselves from the rest of the market,” he said.

Conceding that current economic conditions have somewhat changed the way customers manage their money, Guerrero stressed that whatever decisions they make should be done after careful planning.

“The situation is tough, but we’ve seen many in Puerto Rico and the U.S. over the past 20 years — an increase and drop in interest rates, wars, 9/11,” he said. “But what we ask for the most from our clients is that they plan. Regardless of their situation, that they identify risks and priorities so that we’re able to offer advice based on their personal situation.”

“But this time is different in Puerto Rico, because it has become complicated given what is happening with the island’s debt,” Guerrero said. “Many people had used Puerto Rico bonds for their retirement savings and investments, but we’ve seen how their value has dropped.”

“There will always be challenges, which is why we insist on planning, because we don’t know what’s going to happen tomorrow,” he said. “In the market in general there are fewer assets and people have lost money, but at the same time we have seen more customers embrace Popular One’s offer because they have realized that managing personal finances is far more complex than buying the product of the moment.”

“In this process, we must identify the risks, plan, be organized and diversify for long-term desired results,” he said.

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