DO YOU NEED A PLAN­NER?

Mint ST - - PERSONAL FINANCE -

Yes, said Ran­jeet S. Mud­holkar, vicechair­man and CEO, FPSB In­dia, a pro­fes­sional cer­ti­fi­ca­tion body for cer­ti­fied fi­nan­cial plan­ners. “What the fi­nan­cial plan­ner does will be like a patho­log­i­cal test for you. You might be in per­fect health, but still a doc­tor might or­der a se­ries of tests to en­sure that you are in per­fect health. Even if you feel per­fectly fine, the tests are re­quired none­the­less,” he said.

But there are some who be­lieve that not ev­ery­one needs a fi­nan­cial plan. Shyam Sun­der, man­ag­ing di­rec­tor, Peakalpha In­vest­ment Ser­vices Pvt. Ltd, said that some­times peo­ple just need a lit­tle bit of guid­ance to start them on the right path. “Fi­nan­cial plan­ning is like a sledge ham­mer. If you only have a small nail to hit, it might be too pow­er­ful,” he said.

If you have just started work­ing, or have no de­pen­dants or li­a­bil­i­ties or your life is not com­plex enough, you may not need a full fi­nan­cial plan­ner. At that stage, putting in place a few ba­sic things may sort you out. Sim­i­larly, af­ter re­tire­ment, when you have achieved most of your fi­nan­cial goals and just need to pro­tect your as­sets to get reg­u­lar in­come, small pro­fes­sional in­ter­ven­tions may be enough for you. “But apart from these two sets of peo­ple, for the other 80% of the de­mo­graphic, fi­nan­cial plan­ning is highly rec­om­mended,” said Sun­der.

Though ex­perts stress on the need for a fi­nan­cial plan, it should never be done with the sole pur­pose of max­imis­ing re­turns. “It should be for op­ti­mis­ing in­vest­ments and avoid­ing mis­takes es­pe­cially in the ini­tial phase of one’s ca­reer. Even if we in­vest ₹1.5 lakh a year, if done in the right way, it could make a huge dif­fer­ence when com­pared to mak­ing the same in­vest­ment in in­ap­pro­pri­ate prod­ucts,” said Melvin Joseph, a Sebi-reg­is­tered in­vest­ment ad­viser and founder of Fin­vin Fi­nan­cial Plan­ners.

Plan­ners can also ad­vise you on the suit­abil­ity of a prod­uct. For in­stance, a lot of peo­ple in the mid­dle of their ca­reers ap­proach fi­nan­cial plan­ners with in­vest­ments in prod­ucts that don’t suit their life stage. “This hap­pens with a lot of peo­ple and they are los­ing huge amount of money due to that,” said Suresh Sadagopan, founder, Lad­der7 Fi­nan­cial Ad­vi­sories.

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