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Why having the right financial coach is a must for reaching your investment goals

A financial advisor can minimize the chances of investing in instruments that may be ill-suited for you

August 31, 2021 / 09:29 AM IST

Most of us may not have lofty athletic dreams, but we are running a marathon to fulfil our financial goals. While the world of investments gets increasingly complex and cluttered, the need for a financial coach or professional advisor becomes more pronounced.

There are various doubts and questions every investor has along the way. How do you realize your financial goals such as pursuing travel, saving for a house or comfortable retirement? Are the investments generating reasonable returns? Are you moving in the right direction and managing risk appropriately? What approach do you need to take during emergencies or, for that matter, when is a good time to exit an investment?

A good financial coach or advisor is one you turn to for answers. She can address all your concerns, sit with you to strategize so you can achieve various life goals, build wealth over the long-term and mitigate financial risk.

Also read: What the recent Olympics can teach us about managing money matters

How a financial coach can help


Build discipline

A disciplined process turns into a lasting habit for transformational change. Having an advisor ensures that you stay on track for long-term wealth creation. “Drops of water make a mighty ocean”. With discipline, you will fall into the habit of regularly saving. You will be able to get your personal finance and books of accounts in order.

Gain financial freedom

As a mentor, your financial advisor can help assess your current financial position and guide you on planning for your aspirations and achieving financial freedom. A sound plan will help you reach your goals in a timely and optimal manner. Through their expertise, you can access the best of financial practices, as well as draw upon their experience of advising and investing over market cycles.

Manage risk and liquidity

Your advisor not only helps in developing a risk-appropriate strategy that suits your needs, but also adjusts your approach in response to changes in the external environment. They understand the timeline for your goals and when investments need to be liquidated. Factoring your unique needs, a financial advisor can minimize the chances of investing in instruments that may be ill-suited for you and create liquidity constraints.

Optimize tax

Managing taxes can get overwhelming, especially as the breadth of investments and wealth grows. Your advisor will work closely with your tax consultant/ chartered accountant to construct a tax-efficient investment plan that helps you make the most of the various tax-breaks available while maximizing returns. She may also advise on tax harvesting strategies to optimally plan investments’ entry and exits.

Ensure financial continuity

As part of your legacy planning, the advisor can work with your family to not only build, but also protect your wealth in the long run. She can even act as the executor of your estate, providing you with the right guidance on creating a plan that ensures the assets you’ve worked so hard to build are managed and transferred as per your wishes.

Act as a sounding board

In addition to her financial expertise, your advisor can be the voice of reason as you weather the ups and downs of life. She acts as your personal CFO, establishing checks and balances for your family’s personal finance needs and, as your confidant, offers emotionally-neutral advice.

Help become a well-informed investor

Consistently working with a financial advisor will help you become a nuanced investor with a better understanding of macroeconomics, workings of economic cycles, characteristics of different instruments, their risk profile and suitability to your portfolio.

In closing

The right financial advisor can help you reach the coveted gold. It is, hence, imperative you find one who has enough experience and has your best interest at heart. Talk to various financial advisors and choose the one you can trust.
Anup Bansal is Chief Investment Officer at Scripbox
first published: Aug 31, 2021 09:29 am
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