Why do we need a financial advisor?

You may often wonder that there is so much information available on the web about investing – why would someone need a financial advisor?

Because a financial advisor specializes in providing financial advice to clients based on their expertise and their needs. While you may be aware of your needs and how to invest for it, you may not always have the time to do it all yourself. Here is where a financial advisor takes responsibility from you.


Here are some benefits of engaging a financial advisor for your investment and financial planning needs:

•  Understanding your investment needs and chalking out a financial plan:

One of the very first steps while chalking out a financial plan is to understand the need and purpose. Your financial advisor understands from you, your needs and future goals and accordingly draws a long-term plan to fulfil it.

•  Financial expertise:

A financial advisor brings with him/her, expertise about the financial markets. They undergo several trainings and carry certifications to secure the title of a financial advisor or an investment advisor. And thus, engaging a financial advisor to help with building a portfolio, chalk out your goals and help track it, could be a good idea.

•  Laying down SMART goals:

Goals need to be SMART - Specific, Measurable, Achievable, Realistic and Time-bound. Even in your financial plan, you have to chalk out goals that are achievable keeping in mind factors such as your income, expectation of return and goals. And a financial advisor would help you do this.

•  Helping you choose the ideal path to being financially fit:

Once you decide what your goals are, your financial advisor would help you choose specific investment options to achieve it. Your advisor would help you choose the appropriate financial instrument basis your risk-return requirement and match it with the appropriate financial instrument.

•  Regularly monitoring your portfolio:

A financial advisor helps you monitor and reassess the investment performance as you may not always have the time to do it. Regular monitoring of your investment portfolio is necessary to ensure alignment of your investments with your financial goal.

•  Revising portfolio from time to time:

An investment portfolio needs review and reallocations depending on the market situation and changing needs. In such situations, an advisor would suggest revisions on the basis of his expertise and market situations.

The role of a fitness coach is similar to the role of a financial advisor – both carry expertise, both ensure a sound fitness plan – whether physical of financial and both help in monitoring and ensuring the effective progress of the plan during the long term.

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Iɴsᴜʀᴀɴᴄᴇ ᴏʀ Iɴᴠᴇsᴛᴍᴇɴᴛ - Wʜᴀᴛ Cᴏᴍᴇs Fɪʀsᴛ

Many investors come to me asking for schemes where they can get good returns. But I don't start with investments.

I start by asking them if they have taken health insurance and life insurance. Mostly, their answer is no. Even if they have taken, the coverage amount is low. It is then I tell them they should first buy/increase their health and life insurance cover. The investment comes later. They say they first want to invest and later on spend on insurance. They consider insurance costs as an expense. This is so wrong.

In fact, money spent on term insurance and health insurance may be the best investment. In the unfortunate event of a crisis related to health, all your savings could be wiped off without sufficient insurance and in case of death, the family could suffer greatly due to loss of income.

Yes, dealing in investment is my main work but I know without proper insurance, investments may not last long.
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Is it safe to stay invested in SIPs

In Today’s time various financial products are available in market. Investors can buy any financial product according to their need like Mutual funds, equity, bonds, commodity, currency, etc. These are among the various financial products offered by the stock market. But one word that we hear every day as a basic need for every individual is SIP.  SIP (Systematic Investment Plan) is a mutual fund tool which allows you to invest regularly a fixed amount in your favourite mutual fund scheme. In SIP, fixed amount I deducted from the account every month automatically and invested in the mutual fund you choose to invest in. One of the main advantages of SIP is that it helps to build the habit of saving and investing regularly. As we know this process of SIP is goal-oriented and regular, it always keeps you on the right track. You are sure to achieve your goals in the expected time.

 As we all know this is the time of crises because of COVID-19 pandemic and market is on the down side. Mutual fund investors who started SIPs in equity funds sometimes ago are not earning very  good returns. In many cases, they have earned less than what a savings bank account offers. So the question arises Is it safe to stay invested in SIPs at this point of time? Answer is YES

Whenever this kind of situation arises, we try to postpone our investments or stop investing but concept of SIP helps us to overcome this type of thinking. When we regularly invest in SIP over a long period of time irrespective of market conditions, it definitely gives us profit after certain time because SIP help us to buy more units with same price when market is downturn. This is how SIPs help us to maximise our returns. So if we stop or pause our investment in this bad or volatile phase in market, we are actually missing an opportunity to earn more profit.
 

So keep investing in SIP and grab the opportunities to earn more profit.

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