The Only 3 Reasons you may need a Financial Planner

Lockdown days were kind of a blessing in disguise when I happened to connect with the old and even long-lost friends, online of course. When the whole world was working from home, we could find “enough” time to be in touch with many, whom we have not spoken with after school and college days.

Zoom, Google meet, WhatsApp call (for small groups) proved to be quite helpful.

Yes, guys, it’s not only for corporate sessions and webinars, but you can also do the family meet and friends get together virtually over these apps. I am sure you also have tried this.

So, one Sunday while we school friends were on a call, Vikram my school mate, now a cardiologist working in a private hospital in New Delhi, asked me why do people need a Financial Planner.

It was kind of out of the blue question as the agenda of the call was a casual gup-shup. But now when he has asked, everyone seemed to be interested in the same.

He was of the view that financial advice has become a commodity, and when everything is available online, plus with many LinkedIn, Facebook groups where you can interact with “professionals” and Real investors, and with the advent of Direct Mutual funds and other low-cost traditional investments, there is no point of engaging with a financial planner.

That’s a genuine point Vikram, I replied him, but why do you ask? 

Vikram said, he just wanted to check if his understanding is correct?

Exactly, this is one of the main reasons people need a Financial Planner. I answered.

They wanted to verify, what they have heard, read, or felt is correct, and how wise would be to act on the same? Hearing and agreeing to the point is simple, Applying the same on your own finances is where one needs confirmation. 

Reading and watching so many things outside of your profession, puts you into a delusion on many personal financial concepts and the applicability of the same in your then requirements. You start thinking that you know everything but in reality, no one can always be sure about anything.

There are so many factors influencing the investments market, and your personal life that are out of your control but can prove to be a big impact on your personal finances.

A Financial Planner who keeps in touch with the economic environment, handles many clients with different investment behaviours and personal circumstances, and keep himself professionally updated, will always be in a better position then you getting all the knowledge or I should say information, from the newspaper, social media and TV shows.

(Read: What roles does a Financial Planner play for you?)

So planning, reviewing, tweaking plan and that too timely becomes important, which only a professional by your side can do for you, and who charges a fee for the same.

To avoid a fee-based professional, you waste so much quality time on social media finding answers to your questions and then verifying the same in some other group or a blog, when you can otherwise use the same time refining your professional acumen and thus increase your Income and investible surplus.

Good Professionals are Good Just because they know where they should invest their time in and what are the things they need to delegate or put in a process.

(Also Read: You do not need an Adviser to make investments)

Hmm…I got what you are saying. Shilpa interrupted. She was the topper of our class in school days. Now a Dentist, mother of 2 plus enjoying additional responsibility of managing the family’s finances.

I don’t know about Vikram, but I have to admit here that I am quite lousy in managing finances, and thus I surely need and even have an adviser by my side. Shilpa Proudly Confessed.

That’s great Shilpa. So here is the other reason of having a Financial Planner.  

When You Know that You don’t Know. This is the acceptance state, and you yourself agree that these are the things that are out of your domain but are very important for the wellness in your life and thus you want some professional financial planner to help you take care of this.

But at this stage too, when you don’t know where to go, and whom to engage, then you find solace in social media, friends and family members who if are also the victim to social media or bad advice may guide you to stay out of it and keep investing in safe and secure LIC Policies or traditional instruments.

Or they may even start guiding you themselves out of their good or bad experiences but not from your requirements angle.

So here, if you know that you need professional guidance then you have to have a Registered Fiduciary by your side.  

(Also Read: Is your Adviser SEBI Registered?)

I and my friend Sumit, have discussed in detail in our 2 step Money talks videos on who should be considered as the best financial advisors for you and

and what to ask when you find one so to engage him/her for your financial wellness. You may watch the videos above and below.

The third reason when you have to have a financial planner with you to guide on personal financial matters is when You don’t know that You don’t know.

This is a kind of overconfidence or a complacency state when you either do not want to accept that what you are doing is not correct or there is another better way of doing it;

or you have become so complacent, that you feel whatever you are doing is fine and there is no benefit any other person can bring in.

This according to me is the most dangerous state, since you are in a state of denial, which blocks your mind and not even let you listen the others point of view which may be better for you.

Having confidence is always good, and confidence comes from knowledge and experiences. But once that turns into strong beliefs then you get stubborn in your thinking and become arrogant in your actions.

Slowly this turns into having a half-baked knowledge, which is dangerous for your Personal finances.

In an everchanging world, there is nothing permanent. You should always be open to listening to the other side of the story, so you can take a calculated risk. You focus on Returns but your Financial planner tries to keep the risk also in check and helps you make wise decisions.

So, in the end, I understand Vikram what exactly you wanted to say, that, why can’t a person do it himself. I would say, why are their professionals at all if this is the solution. Why can’t we keep everything on the internet and let people read, learn, decide, and transact?

Answers are available on WebMD too, there are many you tube videos where many uncertified, Unregistered people are suggesting many things which is the domain of professionals only.

If you limit yourself to thinking that Financial planning is all about making investments, then you are wrong. With this thought, you are exposing yourself to Misbuying, which is more depressing than misselling as you have no one to put blame on to.  

(Also Read: Financial Literacy is not about making investment decisions)

Hope I am clear.

Yes, bro. I am sold. But I will not pay you a fee, this is for sure. And on this note, We closed the Call with a Big laugh.