Last week our article on Need for
Financial Planning gave us mixed responses regarding the understanding on the
subject. Although, what we can summarize is that major of the readers said that
they all have made some arrangement for the future, however none of them
understood which investment was appropriate for them. They
also mentioned that they made all these decisions by themselves and never had
any interference / help from anyone. They never felt it necessary to have
someone else making a road map for their goals. Even, if one agrees to have an
outside advice, they never paid a price for it.
So, why do we stress on need for
having a plan and that too, designed by a financial planner. What is the
expertise of a planner that sets him apart from the rest of the so called
advisors?
Today,
we are here to discuss what a Financial Planner can do for you that others
would not even think of doing.
1. Ask - Plan – Evaluate – Invest:
What we are used to: A usual investment decision follows the pattern of
surplus of funds, available avenue of investment and maximum tax benefit. This
could even mean taking a rebate from your servicing advisor or agents.
What a Financial Planner can do: The planner follows the
route of asking your goals/ dreams/ aspirations of your family- giving it a
value –fulfilling your need – working on your priority – matching tenure of
your goal and investment.
If it means, giving you nominal tax benefits then let it be. It has to make you
meet your goal what you saving for.
For a planner his fees are his earnings and he seeks no other
monetary benefits from suggested investments to his client. It is inclusive of
advice, revising and reworking, revisiting any investment mistake or even stops
the client from making any wrong financial step. The plan discusses investment at the last step to
implement the discussed strategies.
2. Review & Rework
What we are used to: Any investment made on recommendation promises least
possible losses and many other such promises although with a shelf life for
itself. It is not possible to determine if they would work in long term say
even for more than a year. Such profits earned can be rightfully termed as
speculation and not as Investment. So, is it wrong to earn such unwarranted
amounts? No, if we can be reassured that the strategy
will be successful to save enough for your goals and made available at the time
you need it.
What a Financial Planner can do: A Financial Planner studies your
goals and suggests any strategy; he monitors it for the client and gives his
advice, in case if it needs any tweaking. The plan always remains dynamic, the
goals can also be revisited if the client’s situation changes. It is only when
you have a documented plan in place that you can work these changes.
3. Qualified to understand your Finances
What we are used to: A family friend working for an insurance company
or a real estate broker or a stock broker knows the best about his industry and
products. He knows when market is going to boom and when it won’t. He has been
right in 90% of recommendations given in the past and even made up for any
losses he made. He assures his proactive working in case if anything goes
wrong. So, he has always been your true guide.
What a Financial Planner can do: Let me explain with an example what
a planner can do. We all mostly use our phone GPRS to travel in new places or
unknown places right? We use it to search the nearest possible by-lane to reach
our destination. But when our GPRS says “Destination arrived” do we simply get
down of our vehicle? No, we don’t. We ask some local around for the more exact
location or sometimes ourselves venture to see if it the exact point.
Similarly, your planner like your other advisors provides you the route but as
a personalized local effort takes a step forward to study if the suggestion
matches your need. If not, what are the available alternatives? Is this the
only way to grow or in future you can take an alternative in future.
So, how can a Financial Planner help
us in every aspect? To be a qualified Financial Planner, every planner studies
about the entire financial market including taxation and application of the
same for his clients’ welfare. He studies about allocation of client’s monetary
resources in best possible manner, studying his needs, understanding and
designing of his retirement plan, his life risk management and also to plan
about the unseen contingencies.He applies the behavioral science to understand
the appropriate financial logic to your goals. He sees
your family as his priority while making a plan as you would do when you plan.
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