Jul 22, 2013,18.39 IST
Time to change the way you take financial decisions
The long- term impact of every financial decision is significant. The benefits of a well informed and well researched financial decision continue for many years, whereas, a bad financial decision hurts both short and long term financial prospects.
The impact of individual financial decisions on collective financial life of an individual and his/her family is often ignored. This can be mainly attributed to the source of our financial advice.
So where do we get our financial advice from?
• Friends and Colleagues act as financial advisors for 35.40 percent of the professionals.
• Family members are the prime source of financial advisory for 30.97 percent of the professionals.
• 13.27 percent of the professionals make financial decisions based on their self research.
• Friendly neighborhood agents advise 15.93 percent of the professionals.
• Only 4.42 percent of the professionals seek advice from an expert financial advisor before making a financial decision.
Source: Personal Finance Habits of Salaried Professionals in India
We rely on expert advice in every walk of life be it buying a car or consulting a doctor. However, when it comes to planning our finances, we often make decisions without consulting a financial advisor. Lack of access to quality advice is the prime reason behind individuals making some financially bad decisions.
The indirect factor that affects the financial decision making process of the professionals is the current market structure. The transactional nature of the market plays its part in supporting the myth among professionals that financial advice is costly and money management is only required for the wealthy. This is the governing factor behind the professionals banking on the advice from their family, friends and colleagues.
However, majority of this group of advisors themselves lack the financial knowledge. A group of these advisors also have a vested interest of selling products and gaining commissions through such transactions. We have to change the way in which we take care of our personal finance.
Personal finance decisions cannot be outsourced. One cannot expect to get tailor-made solutions. We have to get involved and get help from the qualified professionals to help us in managing our finances better.
So how do we address this concern of providing quality financial advice to vastly diversified salaried professionals? New innovations which can leapfrog the existing system and provide the professionals the much needed quality advice is the need of the hour.
Offering personal finance solutions through online technology can prove beneficial for the professionals. It gives them convenience to plan their finances at their convenient time. The online personal finance management techniques provide access to quality financial advice which is also cost effective.
Authored by ArthaYantra.com, an integrated online personal finance company.
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