Expert advice

Jun 16, 2015,16.40 IST

Seven triggers that make one engage a financial planner

Nitin Vyakaranam

In the medical field, any abnormality or a disease is diagnosed by studying the symptoms which is called symptomatic treatment. Similarly in personal finance, there are symptoms or life events that act as a trigger for an individual to reach out to a financial advisor for their help. Let us look at few triggers or life events that makes one consider meeting a financial advisor.

1. Early pangs of building wealth

Thanks to India’s growth story and abundance of talent, it is common nowadays to land a well paying job in a big company right after you finish your studies. Unlike in the past, the young professionals of today earn a good starting salary in many employment sectors. With good salary automatically comes the desire to do well in their personal finance and build wealth. The aspirations of this segment is a true tale signal and it is one of the best times to seek professional help of a qualified financial advisor as any investments made during this age would be able to leverage the advantage of the power of compounding.

2. Arrival of a baby

Planning for a baby is one of the most joyous moments in a couple’s life. It brings with it a sense of hitherto unknown happiness and the anticipation of being a parent outlasts all joys that they have experienced till then. As soon as the pregnancy is confirmed, young couples convince themselves to make arrangements for a baby joy ride. It is a natural tendency and an emotional need to feel that we would give our baby all that which we could not get in our childhood and only the best that we can give. This can be the best of healthcare, the best of facilities at home, best of toys, etc. Just like you plan for the baby’s toys and clothes, we must also plan for the financial security of the baby. This stage is a sure shot sign for the need for a financial advisor who would redraw your financial plans with the new financial goals like children’s education, children’s wedding, etc.

3. Higher Education of children

Education of children is one of primary financial goals of any individual. To be able to provide the best of education to their children drives individuals to go beyond their means. If we take a look at Education Inflation, it is at 16% year on year. For example, a post graduation in MBA that would cost around Rs 10 lakh today would cost a staggering Rs 1.94 crore 20 years from now. So if you want your children to have a good shot at that MBA dream, or for that matter any dream that he wishes to pursue when he reaches the age of 20, it is necessary to engage a qualified financial advisor who would design your financial plan and help you achieve your goals.

4. Inadequate returns from Tax saving instruments

Let us admit it. We all scramble to buy tax savings instruments to ensure we submit proof of investments to the human resources department during Jan-Feb period. While there are a lot of options for us to save tax, they do not necessarily serve the purpose when it comes to returns on investments. Tax planning is essentially a subset of overall financial planning and care should be taken not to mix both as returns from tax saving instruments would not be able to help you achieve your financial goals. If an analysis of our personal finance indicates that many of the financial instruments we hold are purely Tax saving tools, it is time to seek professional help of a financial advisor.

5. Desire to Invest in the stock markets directly

Every individual wishes to have an additional source of income apart from his regular income. One of the most tempting options that we all consider at some point in our lives is to invest in the stock markets. Although it appears to be a very simple way to earn handsome returns on our investments by following a simple rule – Buy Low, Sell High. But the fact is that it is not so simple. Unfortunately, many individuals lose their hard earned money by investing directly by themselves in the stock markets. It is always advisable to seek professional help of a financial advisor before investing not just in stock markets but also for any other investments.

6. Too many investments, too little time to manage / monitor

Quite often, we end up buying financial instruments without a definite plan. There are instances where an individual holds more than five or six insurance policies even though they do not provide adequate risk coverage. Similarly, it is not surprising to see an investor having exposure to more than 50 stocks. It becomes cumbersome for an individual whose core area of expertise is not finance to keep track of so many financial instruments and investments by themselves. When you find it extremely difficult to manage and monitor your investments and are not sure of how they are performing to help you achieve your financial goals, it is a tell tale signal that you need the help of a financial advisor. The sooner the burden of investments is offloaded to a financial advisor, the better it is. The financial advisor would do a better job of not only tracking their progress, but also review and rebalance the portfolio based on the prevailing economic factors.

7. Nearing retirement

Along with uncertainty about the future and insecurity, retirement also brings with it lump sum cash flows. All the money that was contributed from a long time to provident fund, gratuity, etc. suddenly find their way to our bank account. It is a very critical stage in one’s life and one that needs expert intervention. This would be a stage of life where we would need a regular income from our investments so that our regular and medical expenses will be taken care of. If you have not already done it, it would be a prudent decision to engage a financial advisor just before retirement so that all the cash flows can be analyzed and invested in instruments which give better returns for senior citizens.


Just as we seek the advice of a qualified doctor to treat our physical ailments and do not depend on quack doctors, it would always be prudent to keep a check on the 7 financial triggers that indicate the necessity to engage a financial advisor.

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