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Why do I need? Am I right in making this decision?


Human psychology goes against the practicality and general logic and most of the time it compels people to take their decisions emotionally. When we were using landline phone for telephonic conversations, we never felt the necessity of mobile phone. Even when it came, as a concept people were reluctant to use such hi-tech instrument for exchanging conversations. But, no sooner it came, it became hot favrourite of young and old alike. Whole generation got hooked to it. Today we will not see any single person who is not having mobile.

Considering the above example where human psychology is at play, it is evident that we follow people around us rather than our own preferences. So much so, that we are not even ready to look at the features and benefits of the product.

Don't you agree that many of us are doing it with our financial matters also. When it comes to making a financial plan by paying fees to an expert, our logic is that we don't require it. But here you are loosing out on most important aspect i.e. unbiased advise of an expert who can guide you for your finance, for your health, for your goals thus making you lead a happy life. Still you are just looking at the fees of the expert. Is it right thing to do? No!

Read on to know why.

It is noteworthy that we should not be too late to know that financial planning done by an expert is worth your money as he is the one who not only has the required qualifications but also detailed knowledge of the subject. They are known as Certified Financial Planners. So before taking a step towards planning your finances, you should know the phases in your life. Say as you ascend newer highs in your lives, your aspirations and needs grow proportionately. These ever-increasing needs are further compounded by inflation, which depreciate the purchasing power of your hard-earned money. To achieve your dreams and fulfill your future obligations, you need to carefully plan your finances. This can be done via sound financial planning that takes into account your current and future needs, your individual risk profile and your income to chart out a roadmap to meet these anticipated needs.

Now you must be curious to know in which all areas an expert can help you.

The areas are listed below:

1) Investment:

Investment is very important when it comes to planning. You make investments either in Equity shares or in Mutual Fund or in Fixed Deposit or in Gold. What good are these if they are not goal based as you are doing it through agents who may be your relatives or friends, just having sales skill to promote those products, which can earn them commissions. Hence the advice is very biased in nature. Here you are not sure that these investments will fulfill your requirements and also will help you to let you live your life peacefully. But when you do your investment through a Financial Planner, the first step, which he will ask you to take, is to decide the path of your life, set priority of your goals, understands your risk appetite, in short, he will take you through the entire process of planning which ultimately helps to allocate your assets in to proper asset class, based on your goals by considering inflation into account

2) Cover yourself Adequately:

 We all know that insurance cover is utmost important still we are very reluctant to take insurance. Even if you have taken Insurance it is through endowment plans or ULIP plans which is the combination of insurance and investment, it applies to health insurance too, as people take investment and health insurance combination plans. According to financial experts it is always advisable that you should take separate plans for your different needs. Because you will neither satisfy your insurance cover need nor growth on investment. By keeping your insurance and investment separate, it is sure that you will have adequate cover for your self for both life insurance (Online Pure term plan) and health (Mediclaim through general insurance).

3) Professional Approach:

 The Financial Planner will always clearly explain or document the services to be provided to you and will define both his and your responsibilities. The Planner will explain fully how he will be paid and by whom. The Planner will also disclose any restrictions on his ability to give unbiased advice and disclose any conflicts of interests. You and the Planner should agree on how long the professional relationship should last and how decisions will be made.

4) Review:

Generally you do not give importance to review your plan or may be you don't get time to do so. But for the financial planner it is one of the process or stage where once the execution of plan is done, it must be reviewed regularly. As your needs change, and the economy changes, so does your plan. A good financial planner should encourage you to review your plan and make changes as needed thus keeps a check on your progress.

This way you understood the importance of taking services of a financial planner who is expert in making your life simpler, which we can easily point out by giving thorough look on above important highlights. Hope that, now most of you will not mind in taking guidance of financial planner by paying fees rather than living life in a haphazard way.

Happy Investing!!

 

We can help. Call 0 94 8300 8300 (India)

 

Leave your comment with mail ID and we will answer them

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You can write back to us at prajnacapital [at] gmail [dot] com

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