Why do we need a Financial Planner?
I am sure we are familiar with the various investment options available in India. A selection of these options or products as we call them forms a portfolio that is supposed to help us to meet our financial goals. But , often we find that they fall short either due to what and how much of each of them we buy or due to the fact that we move in and out due to short term market movements. So here we are not only talking about selecting, allocating and managing portfolios but also behaviour. This is exactly where a Financial Advisor can make a difference and help us steer towards our financial goals. This is not only the expectation but also the experience of investors in developed markets where the advised portfolios have done better in terms of performance thus helping the investors reach their goals.
What areas would the Advisor add value?
Understanding your needs, helping you define, prioritize your goals, computing the money required for these goals keeping in mind lifestyle changes and inflation.
Make the tenets of wealth creation work for you – Quantum of investment, Return generated and the tenure by choosing the most suitable set of products in line with your risk taking ability and goals.
Help you with the related documentation, transactions, tracking progress and related communication at regular intervals. At the same time review the products in the portfolio to ensure the best stays on and then re-balance to stay put with your original plan of allocation.
Another important role would be to keep you informed on various developments and help you stick to your investment discipline without losing the sight of your goals.
This can also go beyond based on your requirements into areas like estate planning, tax consulting, inter-generational wealth transfer and just about anything to do with money.
How do you find one?
This could come from various sources but give utmost importance to reference of existing clients. It is always a good idea to meet a few Advisors / Distributors of financial products referred by your trusted circle of contacts. With this you will get to understand their process orientation, work philosophy & experience in helping clients achieve their Financial goals. You may also check with Product manufacturers e.g. Mutual Fund or Insurance companies who could refer you to them based on your location and requirements. The key criteria should be the qualification, experience, process orientation and of course integrity.