Viewpoint | Investment advice is not just for the rich

Financial planning or advice isn’t just about getting rich. It’s rather about using the limited available resources to best achieve your real financial goals. And a well-thought-out and well-constructed financial plan can help even those with limited resources to first recalibrate their finances and later align all their investments to their actual financial goals to bring about synchronization among various portfolio parts.

You may have common goals such as buying a house, retirement, children’s education and overseas travel. Or, you may have some other unique and not-so-common goals (a big diamond ring for your wife?) that require money.

Now you already know that all these (sadly) require money. But do you know whether you are on track to save adequately for all of them in time? Or are you just hoping that things will work out? The problem with the latter is that hope is not a strategy. Proper intervention by a competent investment advisor can bring in the necessary clarity to your financial life. How? The advisor can help you:

• Figure out and reprioritize your real financial goals
• Assess how much each goal will cost in future
• Assess how existing assets (investments) can best be used to fund the goals
• Find out how much more is to be saved regularly to bridge the funding gap for the goals
• Where to invest and when?
• Become better prepared for financial emergencies by building saving buffers for unexpected events.
• Find out the right life insurance cover, which in case of death, will pay to fulfil all goals and provide regular income to dependents for years
• Get your family’s health properly insured so that your personal finances aren’t derailed because of unfortunate hospitalization and big medical bills
• Whether you are giving retirement its due importance or ignoring it. If it’s the latter, she can help you course correct and put in place a good retirement plan

Good advice does not come free

As with any other professional advice, even financial advice costs money. But remember, good financial advice is rare. And a few important pieces of financial advice can offset many years of the fee charged by the advisor.

Good professional investment advice (or financial advice) is like using Google Maps to reach your destination. As you begin driving, it will occasionally reroute you in case of any changes in the route or traffic, etc. to ensure that you reach your destination in a safe, time-and-cost optimized manner. This is exactly what a good and trustworthy investment advisor does for you.

The words ‘good’ and ‘trustworthy’ are important because there are many product sellers (such as insurance agents and mutual fund distributors) who will blindly sell you anything, irrespective of whether it suits your needs or not. And that’s because they get a commission for selling those products. Plain and simple. A real investment advisor, on the other hand, doesn’t get any commission from anyone. He only takes fees from clients and gives his unbiased, conflict-free advice that suits the client (and her risk profile) and helps realistically achieve the financial goals.

Of course, not everyone needs financial advice. There are many who can manage their investments on their own properly. But for many others, right professional advice is necessary. For such people, it's harder to achieve their financial goals without a plan.

The best part is that a financial advisor may be more affordable than what you might think.

(The author is the founder of StableInvestor.com)