Very few people even think they need financial advise. The usual reasons why people think (or they tell me) are as follows:
1. I do not earn enough to seek the services of an advisor: Well, well anybody and everybody thinks that their income is just too small for them to seek the services of an ‘outsider’ with whom to share their finances. If their income were just a little more (on an average about 30% more) they would need a person to tell them on what to do with their money.
2. I am a CA (MBA, or any other degree can be substituted as per the situation)- and I know to do my own financial planning. My view: no education in India prepares you for handling personal finances. It has to be a combination of education, networking, experience, meeting people in various industries, etc. which helps in becoming a good adviser – not just a degree.
3. My Dad (Mom, friend, grandfather, neighbor, ....substitute any word) handles my portfolio! – Well if he has not set the Thames or the Ganges on fire he may not be the best adviser. However it is impossible for the ‘outsider’ to ever give an answer contrary to the ‘home bound’ adviser. God save the adviser if he dares to argue with the ‘Dad’. Afterall Dad WILL NOT CHEAT, WIL HE?.
4. I have done SIPs in Hdfc top 200, Icici Prudential Discovery, Reliance Growth, Reliance Vision, DSP Top 100, Birla Sunlife Tax Saver, Sundaram Taxsaver, Kotak K30, …and about 10 other funds. I do not need an advisor to tell me this, na? An adviser may not have done things different from what I have done, so why incur the expense of an adviser? I keep seeing valuable websites and change the schemes as their performance starts slipping. I shuffle my portfolio about once a year – and save valuable ‘fees’ that the adviser would charge me every time there is a change in the portfolio.
5. I just bought a nice big house in Mumbai for Rs. 1.35 crores – and did not use an adviser. Why should I use one when I do a small SIP of Rs. 50,000 per month?
6. I do not want anybody to know where I have invested, what houses I have bought, which equity shares I have bought, etc. so I do it myself.
7. I do not like mutual funds – I do my own portfolio construction. I have a clear 3-5 year range – and I normally hold for about 4 years. I invest only in blue chips like L&T, SBI, Hdfc, Tata Motors, Ntpc, Hindalco, etc. Even though currently my portfolio is about 30% down from the purchase price, I do not have any loss booked. I will sell only after I recover my costs.
My view: L O L, what else to do except laugh?
8. My broker is my adviser- he tells me what to buy, so I do not need an adviser,
9. I work in a bank – and I know what to buy and what sectors will do well. So clearly I will invest what my RM tells me, I do not need an adviser.
10. I have a ULIP and a few Endowment policies – what can an adviser do for me that I have not already done?
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