Future-Proof Your Portfolio: The Importance of Nomination & Succession Planning

Introduction:
Most investors focus heavily on returns, market timing, and tax-saving strategies. But there’s one crucial piece of the financial puzzle that often goes unnoticed—what happens to your investments after you? Nomination and succession planning might not be the most exciting topics, but they are vital to ensuring that your wealth benefits your loved ones—without unnecessary delays, disputes, or legal hurdles.

Unclaimed Wealth in India: A Silent Crisis

According to data from RBI and industry sources:
🔹 ₹78,213 crore lies unclaimed in Indian bank deposits, a 26% increase from the previous year, according to the RBI’s annual report.
🔹Over ₹80,000 is stuck in demat accounts and shares due to missing nominations.
🔹Around ₹24,000 crore remains unclaimed in mutual funds.
🔹 Over ₹2.38 lakh crore of physical share certificates are unclaimed and untraced.
🔹 Collectively, India has over ₹4 lakh crore in unclaimed financial assets.

These are funds that could have gone to families—but remain inaccessible due to a lack of nomination or succession planning.

Where Do Unclaimed Assets Go?

When assets are left without a nominee:

• They are marked as "unclaimed" after a period of inactivity.
• Funds from bank accounts are transferred to the Depositor Education and Awareness Fund (DEAF).
• Mutual fund and insurance proceeds are held by AMCs or insurers until claimed.
• Shares remain with the Investor Education and Protection Fund (IEPF).

While it’s possible to claim them later, the process is often long, bureaucratic, and emotionally taxing for families—especially in times of grief.

Why Is Nomination & Succession Planning Important?

 Ensures Continuity
Nomination is like a transfer switch for your wealth. In your absence, it ensures the assets are smoothly handed over to the intended recipient.

 Avoids Legal Delays
Without a nominee, legal heirs must prove their right through court procedures—sometimes taking months or even years.

 Empowers Your Intent
A well-drafted nomination or succession plan ensures your legacy goes where you want it to go—not just to the “default” legal heir.

 Peace of Mind for Loved Ones
Your family doesn’t have to worry about financial access during an already difficult time.

Common Mistakes to Avoid

🔸 Not updating nominations after marriage/divorce.
🔸 Assuming a will overrides nomination (it doesn’t always).
🔸 Forgetting to nominate in every investment—mutual funds, insurance, demat, PPF, etc.
🔸 Not informing family members about where documents and passwords are stored.

How to Avoid Unclaimed Wealth Scenarios

1. Review All Assets: Bank accounts, insurance, PPF, EPF, NPS, mutual funds, demat accounts, FDs, NSCs—everything.
2. Update Nomination Details: Use online or offline forms to add/update nominees across all platforms.
3. Keep It Documented: Save and share copies with trusted family members.
4. Don’t Assume – Confirm: Get acknowledgment from banks or institutions for every nomination.
5. Communicate Openly: Let your family know what and where your investments are.

How We Help at NAM Securities

At NAM Securities, we believe financial literacy includes not only how to grow wealth—but how to protect and transferit. Our team supports clients with:

• Nomination Audits – reviewing if all your financial assets are nomination-compliant.
• Succession Guidance – simplifying asset transmission through documentation.
• Account Consolidation – helping clients unify scattered investments for clarity and control.

Final Thoughts

Planning isn’t just about maximizing returns—it’s also about minimizing regret. Nomination and succession planning aren’t grim; they’re empowering. They give you the peace of knowing your family will be financially secure, no matter what.

 Take action today, so your legacy continues tomorrow.