I had posted a long set of True or False….on Monday…and Pattu had replied to them…one of them caught my attention.

I had said…’as life gets more complicated…you need a financial planner’ ..and Pattu said “no,  the investment principles remain the same’

True and False.

There are a few people that you need in life – a CA to file your IT returns (if you are a businessman or have lots of trading in shares), a financial planner (if you do not wish to get into the nitty gritty of personal finance) and an investment manager (if you wish to be in equity portfolio building).

The thinking part is something which requires input – and the execution can be done on line. For e.g. a doctor like Sai Janani can surely file her own return, but it is not so simple. It is much easier for a Pattu to file his Form 16 and his IT return. SJ has to keep track of her invoices, pay advance tax, claim depreciation on assets (means she should know when to buy what bills to collect), she may have to keep a receipt book (in private practice) and issue Service Tax receipt (even for retainership fees)…so now you know why you need a CA.

A financial planner should be able to help you discipline especially if your life gets complicated (no I am not talking of big).

Let us say there is a man K who marries and has a kid. Then he lives in with another woman and has 2 children from her. He marries her AFTER THE 2 CHILDREN are born. He then separates from her and starts living with another woman and her child from a previous marriage.

As a financial planner, he has to ensure that all the nominations are in place, changed, the will made, re made, changed,etc. Now let me add one more complication..if the woman whom he married goes and marries some one else and has a kid with that man…how is that kid to be impacted? Or that woman to be cut off because she married again…

A good planner should be able to think, anticipate, move and brief a lawyer. The lawyer will NOT KNOW WHAT ALL TO DO…it is the planner who knows what is to be done. A very good chance that the planner cannot anticipate the risk.

For example a friend had died ..and his brilliant planner had told his wife that since Rs. 55 lakhs was lying in the PPF account, SHE SHOULD LET IT LIE THERE…..as she did not have a PPF account. Luckily she told me…and I SCREAMED….

She, as the nominee was like a single holder, right, BUT BUT BUT…she had no nominee…:-) . If this woman had died…the kids would have had to get a probate and that is a very painful (and expensive ) procedure.

Thus there is a role for a well thinking well versed FP….and it may not be about Investing. I do realize that I should not be charging for  a generically available statement, but many FPs and CAs do not think at every step. That is scary…


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  1. Similar story few days back in TOI:

    Man marries a women. They live together for few years. Then they lived separately for sometime. Man moved in with another women. That women was married too. After few years, this man marries the already married women. The first wife files a case. The case goes on and on. In the mean time, the first wife marries someone else too.
    Now, the case comes up again for hearing. SC says, resolve amicably (may be the bench wanted to say Get Lost) and closes the case.

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