What roles does a financial planner play for you

role of financial planner

Financial planning is a common sense approach, said Samar, a good friend of mine who works as a project manager in an MNC. Whatever you tell your client is not a rocket science and something they should be doing themselves. I mean cash flow, budgeting etc. are technical jargons but are simple things which sounds a bit complex.

We were sitting in University student center, remembering our good old days…which suddenly took a turn in present.  I was listening to him patiently and agreed to almost everything he said. After all he was actually speaking truth.  After letting him complete his points I asked if he feels him to be financially planned. Reply was obvious. Then why did you go to office last week even when you had fever?  I asked

What do you mean? How does it linked to financial planning?

It is, I replied, I know you went because you were afraid of losing your 1 day salary as you’ve spent all your paid leaves in your holidays.  And you can’t afford to lose even a single day’s salary as your cash flow position is going too tight due to your house and car loan EMIs, your children high end school fee, your lifestyle expenses and of course your high end savings too.

So, you know I am doing high end savings. This is what any financial planner will advise me to. NO?

I replied, let me remind you Mr Samar even though you are doing savings but still in the last 3 years you have enquired multiple times from me that if you are into right products or not. Moreover, no financial planner would want his client to save more at the cost of his health. You should have a work life balance, and you will enjoy your work only when you are leading a happy life. Financials play an important part in that.

I wonder when people invest in five star rated funds, then why do they need validation for their decision in falling markets.  Also when one is financially planned, then why after accumulating a decent amount for a specific goal they withdraw all savings to pay down payment for a big caaaaaar bought on loan. Tell me, why do you want me to have a look at your multiple insurance policies? Why even after saving so much in different products you are still not sure that you are on right track or not?

Anything and everything that relates to your personal finances comes under financial planning. The role of a financial planner is not only to make you invest, but make you invest in right products that suits your goals and other financial requirement.

Financial planner helps you in understanding your goals, prioritizing your goals, focusing on your goals and makes you understand that when it comes to investing, the only goal that matters to you is yours. Your Peer’s or neighbor’s goals are not your goals. Every investor is different.

Financial planner never starts with just advising of products without understanding the requirement of the client. This is where the basic difference between a real advisor and sales person lies. Financial planner takes time to diagnose before writing a prescription. Where you look out for best products to invest in, they figure out the best products suitable to your risk profile and goals. For most people, putting money in the best place doesn’t guarantee it will stay in the best place, that’s why we need true advisors.

A Financial planner handhold the client during volatile market phases. He manages the behavior of investor during rising and falling markets. Isn’t it ironical that in both phases investor wants to exit from stock market? It is only advisor that makes you stay as planned and for that long which is required for you to achieve goals. A financial planner remains on the driving seat and drives you through blind turns.

A financial planner keeps on reminding you of your goals, so you should stick to your spending and saving budget. He puts you into a process so you should know what/why and how of things to do.

A financial planner takes care of the taxation, retirement distribution, estate planning, Risk management etc. and many more things that are required in your personal finances depending on your financial situation and requirements. A financial planner act as family doctor, family coach, family friend etc.

You mean, as if every financial planner actually do all these things. Samar asked sarcastically.

I can’t comment on who does what, but this is their job. Financial planning is a vast field which not only requires knowledge about products and economy, but also skills to understand and manage the behavior and needs of the client. As now every financial planner has to register with SEBI so we follow a defined process laid down by SEBI, and once you get into a process these things becomes a habit. Rest all things comes with experience.

We need someone to help us stick to our “good decisions”. It’s easy to stay on the path when things are going well, but when life takes a turn it can be very difficult to remember all the good reasons we thought at first place.

Hmmm…sounds convincing!!

Finally Samar looks to have given up. But I was not over yet. 🙂

Brother, its not a question of you getting convinced. For you I am here, but these questions still going on in many of your friend’s mind. So do share this with them and help them make their lives planned and happy. Now get up and buy me a coffee!! 🙂

What are your experiences with your financial planner? Do share in comments section



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