Financial Advisor/Self Advisor – Whom You Pick To Manage Your Investments

All of us have some dreams and objectives in our lives that include plans for our kids, owning a house, investing in a business or going on vacations. The goals and dreams change over time.


However, in order to fulfill these wishes without any hitches, you need to plan and manage your finances diligently with the help of a proper financial plan.


Financial Planning is a process of planning one’s own financial future.


Although a financial plan can be done on your own, but it is best to hire the services of a professional. It is similar to visiting a doctor or a lawyer for advice. You can surely opt for self-medication if you have a headache. But would you be doing the same for a more serious ailment ? Will you opt for self-medication or visit a specialist ?


So, it depends on how serious the situation is or how serious you are with your financial future.


financial advisor is perfect answer to your financial needs


Financial Planning is a plan for your sound financial future. If the same is not executed properly — penned down and followed up diligently, the purpose is completely lost! This is where an expert is needed.


A financial planner or an independent financial advisor, IFA can be the perfect answer to your financial needs. However, if still the following questions pop-up in your mind;


  • Do I really need a financial advisor
  • Is it worth paying a financial advisor
  • Can I be my own financial advisor
  • How to decide which one is best choice for me
  • Should I use a financial advisor or do it by myself


It is normal to have such kind of questions in your mind because it’s all about your hard earned money which you hand over to someone to make the effective use of it and gives you a better result.



5 Factors To Decide Which One Is Best

Financial Advisor or Self Advisor



1. Knowledge and Expertise


knowledge expertise as factor financial advisor & self advisor


Financial Planning is a 6-step process which needs to be written down and then followed to the tee.


A financial advisor studies for about 2 years, acquires in-depth knowledge and gets certified, using which he can actively help to plan our finances so that we don’t have to face any troubles at the time of financial needs.


So, why waste your time on something that is not your forte and risk your hard earned savings?


If your advisor is able to make even a 3% difference to your portfolio in one year, it makes a huge difference to your portfolio in the long run when compounded annually! That is where the knowledge, wisdom and expertise of your financial advisor can play a pivotal role.


2. Changing Market Conditions


market condition changing as factor - financial & self advisor


You can read a lot of the market news on financial websites and newspapers but what you can understand and relate to your daily investment needs is a big question.


If you are fully conversant with the market scenarios, the changing trends, the conditions and can correlate the same with your investment patterns, then you might as well do the same on your own.


But more often than not, a layman would hardly be able to understand where you should invest your surplus for the maximum yield as per your risk tolerance. Thus, a financial advisor is the best person to update you with the continually changing market conditions and advise you accordingly.


He keeps himself abreast with the ongoing changes in market and possesses the required proficiency that can help you make decisions on your investment portfolio.


3. Wider Choice of Financial Products


financial products choices as factor - financial & self advisor


Since a financial advisor is aware of the entire bouquet of financial products, he would be the best person to advise you with the perfect solution to your needs. A financial product needs to be solution driven and not product oriented.


Hence a financial advisor will weigh the pros and cons of the product and then advise you according to your needs, goals, tenure, risk appetite and requirement. All the factors need to be considered before a solution is provided and a solution can be a mix or a combination of one or two products as well instead of a single product.


This is where the role of a financial advisor comes into play with a huge variety of financial products at his disposal!


4. Benefit of Advised Over Non-Advised Investment


advised over non advised investment benefit by financial advisor


Like I mentioned, if you have a headache, you might as well buy an over-the-counter paracetamol or aspirin and have it but if you have a serious ailment or a prolonged headache, you have to visit a doctor.


A doctor will never advise medicines without finding out the real reason for the headache. It could be because of multiple reasons and the same can be treated in numerous ways. Similarly,


a financial advisor will check the financial health of your existing portfolio, diagnose your real investment needs and goals and then customize your solutions accordingly.


A doctor has a huge responsibility of saving a person’s life and can also be sued for wrong treatment. Similarly, a financial advisor carries the responsibility of saving a person’s portfolio and making him financially sound. You can take him to task for mis-selling if the product was not well explained and does not meet your financial needs.


Though, it should be noted here that taking the advice of a financial advisor can’t protect you against making losses arising from movements in the market.


5. Cost Factor


cost factor a difference between financial advisor or self advisor


Do you hesitate even once before paying your doctor his fees for every visit? No, right? Then why hesitate to pay your financial advisor who vows to take care of your financial health for the rest of your life and release you of a huge amount of stress and time for other engagements?


You need to realize that a professional will behave professionally only if you pay him his fees. There is no free lunch. If he is not changing you anything upfront, there is a hidden cost in the product or somewhere which will fund his advice. Otherwise, why will he spend his time to advise you?


Mutual funds have an inbuilt fee of approximately 1% of the entire Asset Under Management or AUM which is paid out to your advisor. The remaining amount is invested in your portfolio. So, with mutual funds, you get all the above mentioned benefits and advises of the IFA just at the cost of 1% fee.


As Jim Rogers, a well-known financial commentator and author had said,


jim rogers, a well-known financial commentator and author


Acknowledge the complexity of the world and resist the impression that you easily understand it. People are too quick to accept conventional wisdom, because it sounds basically true and it tends to be reinforced by both their peers and opinion leaders, many of whom have never looked at whether the facts support the received wisdom. It’s a basic fact of life that many things ‘everybody knows’ turn out to be wrong.


Thus, it always makes much more sense to opt for the services of a financial advisor instead of regretting it later. For that you as well as other investors need to change the way you perceive financial planning and take it more seriously instead of taking it for granted.


Then why postpone your long awaited holiday plans or your dream house? Happy investing!

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Investwell June 28, 2019 0 Comments

Lessons To Be Learnt From Billionaires – Inspire To Become Rich

Billionaires have made money in many different ways over the years. Though investors have their unique and singular journeys through life, some of their investment choices are better than the others.


Arguably though, real wealth is accumulated by means of prudent equity investments and not by means of simpler techniques such as accumulating money in savings account or amassing cash.

Indian Equity Market – Lesson From Billionaires


indian equity market status - learn lesson from indian billionaires


Indian stock markets are doing very well presently. The Indian equity market has created enviable returns, especially when you compare these returns to the ones made by other asset classes. Even many foreign investors are buying stocks listed in the NSE and BSE.


The rich in this country have always preferred long-term investing in equity in the form of mutual funds and stocks. This is so as investing in equity for a period of more than three years guarantees a decent return on investment. In addition to this, equity investments with a tenure of more than one year ensure benefits on long term capital gains, with your returns being free of any tax.


As long as you stay invested in equity for a period more than three years, the returns are great despite the risk along with tax cuts. The sad part is that only about 2% of the people in this country indulge in equity investments. Investing in mutual funds at an early age is advisable as your money grows as you grow.



Billionaires are not born overnight and it takes decades for people to reach that high fiscal point. Starting early is the way to achieve your objective of amassing riches.


The right kind of research can fetch you a fine selection of mutual funds and stocks. Do not underestimate the power of compounding when it comes to equity investments in this country.

Lesson To Be Learnt From Billionaire – Warren Buffet


lessons from warren buffet the billionaire inspiring to become rich


“Think Long-Term” –  the best piece of advice from the CEO of Berkshire Hathaway. You only sit in the shade today if you planted a tree a long time back. His advice is to go for long-term yet stable investments and avoid short-term risky investments.

Lesson To Be Learnt From Billionaire – Michael Lee-Chin


lessons from michael lee chin billionaire inspiring to become rich


According to this Jamaican-born entrepreneur, you should only purchase shares in a handful of high quality businesses. You should understand everything about them and ensure that these businesses are part of industries with long-term growth.


These businesses should be prudent with the use of debt and you should stick to these businesses for a long time.

Lesson To Be Learnt From Billionaire – Sam Walton


lessons from sam walton billionaire inspiring to become rich


The successful founder of Walmart is of the opinion that if a large horde of people are investing in something, it does not mean that it is the most valuable investment. Trust your own research!

Lesson To Be Learnt From Billionaire – Chandrakant Sampat


lessons from chandrakant sampat the billionaire inspiring to become rich


A good example to emulate is Chandrakant Sampat, also known as India’s very own Warren Buffet. Sampat invested in mutual funds for a period of more than four decades with stocks from reputed companies such as Nestle and HUL. There was even a time when out of all his investments, equities held 70%.


He was of the opinion that true education is derived from markets and mistakes — the perfect piece of advice for a young investor who wants to be a billionaire in the future. Sampat carefully scrutinized every stock held by him and encouraged constant portfolio examination. One of his favorite quotes was that;

No one is poor in resources, just poor with their imagination. Courage is necessary to dream.

Conclusion – Inspiration To Be Billionaire !


lessons to be learnt from billionaires - inspiration to become rich


Spend some time trying to understand equity investments. There are certain mutual funds that are risky and promise high returns such as high-yield stocks and bond funds. The investor with a moderate risk-appetite should choose balanced funds.


There is a plethora of options to choose from to create a diversified portfolio with the correct type of asset allocation. Learn from the people who have made money by means of calculated, well-researched and long-term equity investments.


All you need to do is dream!

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Investwell June 5, 2019 1 Comment

Why Should Your Family Be Involved While Planning Your Investment Portfolio?

Given the current financial market scenario, building a strong and sustainable investment portfolio is something that one simply cannot escape. In fact, a well built and maintained portfolio is the keystone to financial success. For individuals, it is essential to determine the different asset allocations which work in conjunction towards achieving your financial goals along with keeping the risk tolerance in mind.


But if you have a family to take care of, it is important to work with all the members of the family as it no longer remains an individual financial goal, rather the family’s financial goals. Thus, it only makes logical sense to have everyone’s buy-in and inputs towards the family goal.


Money Handling Skill is an Acquired Skill


money handling skill, family involved while planning investment portfolio


While it is an age-old debate if certain skills can be taught or learned, money handling skills can certainly be learned. For some individuals, it might come naturally, but everyone requires money-handling skills.


It is important to share the goals, plans and portfolio details with other members of the family. This will enable a couple of things. Firstly, the family members know exactly what to do at the time of need. And secondly, they are aware of what needs to be done in your absence.


Financial Planning is Towards a Common Goal


financial planning towards a common goal while planning investment portfolio


Individually a finger can do a lot of powerful things, however, when combined together to form a fist, it is even a more formidable force. This holds good for financial planning as well.


Each member of the family needs to work towards a common financial goal. It is essential that you discuss and arrive at a common goal(s) for the family and work together to achieve the same. Should each member work in a silo, the result will be far below expectations.

An investment portfolio is essentially a collection of assets, which will help you achieve your financial goals. Depending on the needs and requirements of a family, you can set various financial goals. Some examples of financial goals include:


  • Paying off any credit card related debts.
  • Saving money for the retirement of the primary earners of the family.
  • Creating a sustainable budget for the family.
  • Save money towards an emergency fund.
  • Save money for children’s education.
  • Save money towards buying a house. And so on.


Setting these common goals is just the first step. You would then need to work realistically towards these goals and assess the goals on a timely basis.


Risk Appetite and Asset Allocation Needs to be Prepared for the Entire Family


risk appetite and asset allocation, family involved while planning investment portfolio


Before investing the money into different asset classes, it is important that you determine how much time you want to give the investments to grow. You should consider the age of different family members as well.


For example, if you want to create a corpus for your children’s education, you might be looking at a five to ten-year horizon. However, if it is for your retirement, the time frame is much larger.


Risk tolerance or appetite is critical as well. Are you someone who is willing to take some risks in return for higher returns? Considering your entire family, you need to strike a good balance between risk and reward.


Of course, everyone wants to get higher returns, but you should be able to do that without losing your sleep at night. The risk appetite will help you determine how much money you should invest in different asset classes.

Everyone in the Family Needs to be Aware of Where Money is and How to Handle the Same


family needs to be aware where money is and how to handle while planning investment portfolio


It is recommended that you share the investment portfolio with some members of the family. This enables them to continue with the investments if you are unable to do so. Being aware of the investments will allow them to be at a much better standpoint to take decisions when it comes to utilizing the funds.

Bonus, Windfalls, Loans, etc. Need to be Managed From a Family Standpoint


Depending on the various assets that you have invested in, you might be subject to receiving bonuses, loans etc. Taking the decisions keeping the family in mind will help you achieve the goals faster. For instance, if you receive any bonus from an insurance policy or mutual fund, re-investing them in the fund is the smarter choice.


Similarly, you need to be careful while opting for loans so that your financial goals are not hampered.

Prepare Your Children for the Real World


Preparing your children for the real world is as important as educating them. Providing them regular life lessons along with means to handle money will make them better planners and consumers. In fact, your efforts will be rewarded, as they can do their bit towards the family goal.


prepare children for the real world, family involved while planning investment portfolio


Questions such as which car to buy, which size TV is good will be easier to answer if all the family members are aware of the financial plan and are working towards it.


Thus, involving your entire family towards a common financial goal through the process of Financial Planning is the best gift to give your family.

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Anuj Jain May 23, 2019 0 Comments

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