How to decide if you need a financial planner?
How to decide if you need a financial planner?
No other phrase in finance is as ubiquitous today as ‘Do your own research’ or simply, DYOR. It is the hue and cry of almost every voice in modern finance. No more eggs in a basket, no buy what you know, none of the other old banalities of financial literature. Now, everything is all DYOR.
Research and financial literacy are essential parts of a being. Everything is just a few clicks away: no data too remote, no information that’s unattainable.
At a time like this, it becomes important to consider the merits of hiring a financial planner. When research is as easily available, and products more accessible than ever, does it make sense to hire a financial advisor? Or can you go solo in money matters, and build your dream portfolio yourself?
Consider your position in respect to the following points, and decide if an investment advisor holds value for you. A quick self-assessment test at the end will also help you make a better decision. Here we go!
No other phrase in finance is as ubiquitous today as ‘Do your own research’ or simply, DYOR. It is the hue and cry of almost every voice in modern finance. No more eggs in a basket, no buy what you know, none of the other old banalities of financial literature. Now, everything is all DYOR.
Research and financial literacy are essential parts of a being. Everything is just a few clicks away: no data too remote, no information that’s unattainable.
At a time like this, it becomes important to consider the merits of hiring a financial planner. When research is as easily available, and products more accessible than ever, does it make sense to hire a financial advisor? Or can you go solo in money matters, and build your dream portfolio yourself?
Consider your position in respect to the following points, and decide if an investment advisor holds value for you. A quick self-assessment test at the end will also help you make a better decision. Here we go!
1. Investment size
The size and frequency of your savings is a crucial aspect of personal finance. If your investment size is smaller, you should look to invest in easier products like mutual funds. Researching mutual funds is easier than individual stocks, and much more structured. But if your investment size is enormous, a financial planner could earn you a higher return.
The size and frequency of your savings is a crucial aspect of personal finance. If your investment size is smaller, you should look to invest in easier products like mutual funds. Researching mutual funds is easier than individual stocks, and much more structured. But if your investment size is enormous, a financial planner could earn you a higher return.
2. Time on-hand
Research is the most important part of financial planning. Research is what sets you apart from those swayed by trends. Even if you decide to hire a financial planner, it would be a great asset to know and understand the markets. Your research will make your planner’s guidance twice as valuable.
Research is the most important part of financial planning. Research is what sets you apart from those swayed by trends. Even if you decide to hire a financial planner, it would be a great asset to know and understand the markets. Your research will make your planner’s guidance twice as valuable.
3. Risk capacity
Much also depends upon the risk that you are able and willing to undertake. The risk capacity is directly affected by the number of dependents and future expenses on their account. Other factors include the source of income, the holding period, and upcoming withdrawals and expenses.
Much also depends upon the risk that you are able and willing to undertake. The risk capacity is directly affected by the number of dependents and future expenses on their account. Other factors include the source of income, the holding period, and upcoming withdrawals and expenses.
4. Investment goals
In case your investment goals are limited to earning a modest return, you could try investing without a planner. But if you want to beat the markets and really make your money work for you, a financial planner is the way to go! With the right advisor, your returns will far outweigh the cost incurred.
In case your investment goals are limited to earning a modest return, you could try investing without a planner. But if you want to beat the markets and really make your money work for you, a financial planner is the way to go! With the right advisor, your returns will far outweigh the cost incurred.
Self-assessment test to determine if you need a financial planner!
1. Is financial freedom your primary investment goal? Do you wish to withstand personal troubles or macroeconomic shifts, and live worry-free?
Yes? Hire a financial planner.
2. Do you constantly keep money in cash or idle at the bank? Have you thought about securities investment but never went through with it for some reason?
Yes? Hire a financial planner.
3. Do you have a sizable asset base? Or do you wish to build one before retirement?
Yes? Hire a financial planner.
4. Have you tried managing your finances and found it too overwhelming? Did you get too preoccupied with your finances and missed out on other important things like work and family?
Yes? Hire a financial planner.
5. Do you have the knowledge to value assets correctly, avoid common trading mistakes, and understand market shifts?
Yes? What are you? A financial planner?
Disclaimer
This blog is meant for educating people about the importance of the right financial planning. The opinions expressed in the Blog are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product. It is only intended to provide education about the financial industry. Consult your financial advisor to get personalized recommendations based on your life circumstances.
About Rajiv Nair
Rajiv Nair co-founded Finshield Investment Advisors after successfully managing several large clients and businesses in the financial services industry for over 15 years. Rajiv is a Certified Financial Planner who believes – ‘Any amount of effort in wealth management is worthless if at least a part of it is not usable within your lifetime’. He is known to be steadfast in his Investment philosophy and an avid reader on diverse subjects. Learn more about him here Rajiv Nair | LinkedIn
1. Is financial freedom your primary investment goal? Do you wish to withstand personal troubles or macroeconomic shifts, and live worry-free?
Yes? Hire a financial planner.
2. Do you constantly keep money in cash or idle at the bank? Have you thought about securities investment but never went through with it for some reason?
Yes? Hire a financial planner.
3. Do you have a sizable asset base? Or do you wish to build one before retirement?
Yes? Hire a financial planner.
4. Have you tried managing your finances and found it too overwhelming? Did you get too preoccupied with your finances and missed out on other important things like work and family?
Yes? Hire a financial planner.
5. Do you have the knowledge to value assets correctly, avoid common trading mistakes, and understand market shifts?
Yes? What are you? A financial planner?
Disclaimer
This blog is meant for educating people about the importance of the right financial planning. The opinions expressed in the Blog are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product. It is only intended to provide education about the financial industry. Consult your financial advisor to get personalized recommendations based on your life circumstances.
