Why Choose a Financial Advisor?

We at PG Nahar Finance ponder over this fundamental question every now and then. Why should an individual or a family trust their hard-earned savings in the hands of an entity or an individual. This is all the more relevant today as Investors can invest directly and save a part of their expense. This is surely tempting. Ease of investing online and saving part of the expense is alluring. However, this is just one part of the story. With over 2000 schemes in the debt and equity category, the choice of the scheme has to be correct. Going forward consistent monitoring of investments becomes extremely important. More so in the absence of an advisor. Rebalancing of the portfolio with the changing market and political conditions needs to be done by the investor on his own. Add to the various servicing needs like the change of bank, updating of address, email ID’s, statement of capital gains, etc. Hence, a Financial advisor may be indispensable. The moot point is “is the advice provided really worth it ?”. “Advise” is precisely what differentiates a good advisor from an ordinary one.

Is the advice and advisor worth it?

In our close interaction with various individuals, from our family of over 5000 investors, this is what we figured out about “ the worth it” advise and advisor.

  • Investors are looking for ‘ An honest advice’. No mincing of words. If the stock markets are likely to go down it ought to be communicated. Risks need to be communicated and factored in the investments.

  • While investing, investors want to be ‘educated on investments’. Financial planning is not taught in most school text books. Besides, it is simple and easy to understand. Hence basic education needs to be imparted. Investors expect “Hand holding” for a few months or years to understand the investments.

  • Investors expect financial advisor to know the importance of savings and investment in middle class families. Investors expect hard earned money to be safeguarded at all costs.

  • Investors have little or no idea about financial objectives/goals, retirement planning, long term compounding, inflation, risk or adjusted return. They expect the financial advisor to educate them and factor all this (and more) in the investment plan.

  • Investors are looking for ‘ An honest advice’. No mincing of words. If the stock markets are likely to go down it ought to be communicated. Risks need to be communicated and factored in the investments.

  • In monetary terms, the returns generated by the advisor has to be at least more than the difference in the expenses between Regular plans and direct plans. Good services, investment tracker and professional approach are add on’s and need to be part of the package.

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