Why do you need a Financial Planner ?

In this post , we will discuss why would you require a Financial Planner to do your Financial Planning . Each and every area has its own dedicated professionals . Just like we have Doctors , Engineers , Lawyers etc , we have Financial Planners for Financial Planning . Don’t confuse them with Mutual funds agents or Insurance Advisor ? No !! .

Let us see some Important Points on why we need a Financial Planner ?

They see your Financial situation as whole , not in Parts

One of the major issue with our country is that here each thing is seen separately and not as a whole thing . An Insurance Advisor will just suggest you a policy without understanding what is your Insurance Requirement, They will just suggest your Insurance Requirement as 8-10 times of your Annual Income , which is not so cool way of calculating the Requirement . Mutual Funds advisers will just pick some Mutual fund for you without understanding your Risk-Appetite and your Future Goals . They don’t take care of your Tax planning , Estate Planning (wills and Legal Documents) , your Cash Flow etc etc .

A Financial Planner on the other hand is a Doctor of your Personal Finance , who will very closely study each aspect of your Financial Life , He will understand your Risk Appetite , Your Future Goals , your Future Needs and Requirements , your Insurance Requirement , your Investment needs and finally come up with a Financial Plan and Recommendations which will take care of each aspects in total .

Financial Planner will Educate you

Financial Planners will make you understand reasoning behind every suggestion he gives you , He will make sure that you agree and understand everything , so that in future you can take similar decisions yourself . Has any Mutual funds advisor told you why SIP is better for you Or Why You should expect great returns in long term from Equity ?

Has Any Insurance Advisor told you What are the important things you should be aware of before buying a ULIP ? Or why you you should avoid Endowment Polices for Long term wealth Creation ? I doubt there are many of them giving any genuine information.

Financial Planner wants to make your Financial Life Better

Financial Planner goal is not limited to Insurance planning or Investment Planning . In fact a Financial Planner is trying to make your overall Financial Life better and paving a smooth financial path for you , on which you can start walking . Your overall Financial life is made up of different components Insurance Planning , Investment and Retirement planning , Estate Planning , Tax Planning etc etc . He will take care of all these things .

Financial Planners are Certified or under Certification and have deep knowledge

How many agents or any kind of Advisor you have seen is competent enough to advise you ? What is there relevant experience in that field ? Most of them are just under there respective company’s Training .

A Financial Planner should be a CFP or undergoing CFP as his Study . CFP is the highest level of certification all over the world in field of Financial Planning . You can also look for people who have deep understanding of Financial Planning and are undergoing the course , As CFP is new in India , there are many students who are under the learning process and are very good Financial Advisers ( You can count me if you like ) .

They have good network base

Good Financial planners will have excellent network of Agents and Other professionals who can be helpful to you . Like for example , If he recommends you to go for a Term Insurance , he may also recommend you some company’s Term Plan and may recommend you to some good and trusted Agents , This will again be an important thing which you should consider . A Financial Planner may or may not have share in the Commissions .

What is the general Process Financial Planners Follow ?

The first step they will follow is to get out each information out of you , which will help them to understand your situation in depth, They will try to capture each aspect of your Financial Life through a Questionnaire , Its like a Doctor trying to get every information about you to give you a prescription . Then they will analyse each aspect and come out with the Plan and recommendations .

They will not simply come to you and recommend you some mutual fund or insurance policy understanding if you need it or not . They will do your Financial planning in the same way as you would have done yours if you were a Financial planner . They can also assist you in future in monitoring your Financial plan depending on your agreement with the financial planner . Just like you have your dedicated Family Doctor , see him as your Family Financial Planner .

See 8 steps of Financial Planning

I have enough knowledge about Products and Financial Planning, I constantly Read Financial Magazines and Blogs and keep updating my knowledge. Why should I hire a Financial Planner in that case ?

Great !! . If you are doing this , its much appreciated . You have to understand that
Financial planners are dedicated Professionals in that field , They have undergone tough training in that field and may have much better detailed understanding nitty-grittes of Financial Planning which you may lack . You may have good knowledge and understanding and you may your self take care of your Financial life to great extent ,Its you who have to answer how your Financial Life must be , “Not Bad” or “Excellent and Perfect !!” .

Also it may happen that its your myth that your understanding is very good , you may have good understanding in one field , but what about other fields , A financial planner may also have good competence in understanding of Financial markets , Derivatives Markets , Law governing tax etc , and these keep on changing and one needs to be updated with the information .

However If you great interest in Personal Finance and already have great understanding and knowledge, You can enroll for CFP and start a new Career !! , Dont forget to keep in touch with me !!

What about the Cost ?

Everything comes with the cost. Definitely, and if you need Quality , you need to pay quality cost for it . But don’t be horrified by the fees you pay to Financial planners , you have to understand difference between Price and Value, Just seeing the numbers may make you feel bad, but when you concentrate on the value it adds to your life, you will be amazed . If you pay Rs X as fees to Financial Planners, you will save many times of that because of him .

Its like this, If you are sick , you pay for medicine .No questions asked !! . Either pay and save yourself and be happy OR just live in hope of it getting cured by itself ,, but it will actually get worse and one day kill you .

But my Financial life looks great to me , I don’t see any issues , my insurance cover is fine, my Investments are great .. ?

Baby, you don’t know a lot of things in that case .. Life is waiting for you . There are many people who think they are totally fine and at last they are diagnosed by Cancer and most of the times its at the last stage , don’t wait so long , get it checked now !!

My Family and Friends are forcing me to see a Financial Planner ? what should I do ?

No ! , You should only see a Financial Planner when you yourself realise that you need it . This is an issue with our country , Most of the people do not know and do not realise that their Finances Stink !! , Only when it goes out of control ,. they will realise that time has come , and by then its too late. What is stopping you to at least get your financial checkup done by a Financial planner , He will make you realise first that you need it badly and once you agree you can hire him to fix it .

Conclusion

Most of the Indians are totally clueless about Financial planning and only in recent years there has been some awareness about it . Most of the people try to fix there finances on their own without accepting that they are not competent enough to do it, they need a professional , Don’t you pay to Doctor or Lawyer or any other Professional , then why not hire a Financial Planner ? Go for it !! Jago Investor !!

• Note : For people who need my Financial Planning services can mail me

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