- Who are personal finance managers or advisors?
- What do personal finance managers do?
- Who needs a personal finance manager?
- Why you should take help of personal finance managers to plan your finances?
- When is it time to hire a financial advisor?
- Types of personal finance advisors in India
- What is Robo-advisory?
Who are personal finance managers or personal financial advisers?
Personal finance advisors are trained and experienced professionals who offer customized financial guidance to their clients. A personal finance advisor understands your financial goals and allows you to make investments that would help you achieve those goals.
Here is a lowdown on the exact profile of a personal finance advisor:
1. Advisors are experienced in personal finance
The biggest attribute of a financial adviser is that he is experienced. With experience, one can understand how the markets work, how investments yield returns and what makes your wealth grow. A personal financial manager, with the help of his vast experience, can guide you properly and tell you exactly what you need to do with your finances. You may have some bookish knowledge yourself, but without experience, you cannot tread safely. This is why hiring a manager helps you.
2. Highly trained
The personal financial advisers are highly trained individuals who have the best degrees from the best institutes around the world. This makes a manager very skilled in his work as he understands the basics of financial management in a wholesome manner.
A personal finance adviser is a highly-helpful resource that you must consider getting when you need help with financial planning and investments.
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What do personal finance managers do?
A wealth manager’s primary duty is to ensure your wealth grows, while you meet all your financial goals. A personal financial manager helps you to streamline your expenses and encourages you to save and then helps you to invest the saved money. Take a detailed look at the main responsibilities of a financial manager:
A. Analyzing your financial condition
The first and foremost job that the adviser undertakes is that of analyzing your current financial situation. It is the adviser’s job to assess the situation, understand the concerns, make a plan and then offer his advice to the client. This is why you need a personal finance adviser who can work with you on a one-on-one basis and help you sort out your monetary challenges.
B. To help you make your cash flow analysis
The next, and one of the most important duties of a personal finance adviser is to make a tailor-made cash flow analysis for you. The plan must primarily include your income, expenses and savings. The plan must be designed in such a way that you know how much to spend and how much to save. This is crucial, as only when you save can you start investing.
C. Help you choose your investments
Perhaps the most important role of your financial adviser is to help you choose your investments. Many people do not properly understand the basics and scopes of the various investment tools such as fixed deposits, mutual funds, etc. Everyone needs to invest as it is only through investments that one can accumulate greater funds, save tax, plan for the future and achieve their financial goals. A good personal finance adviser understands your finances and your risk-taking capacities and then tells you exactly where you need to invest to get the best results.
D. Plan your taxes
The very mention of the word ‘tax’ causes fear and confusion in the minds of many people! Tax is a severely challenging topic and though you may think you know all about it, you may actually just be aware of the tip of the iceberg. Tax management and payment need to be done with complete precision. You should also look for ways in which you can save tax in a legal and effective manner. But do you know how to go about it? If not, your personal finance adviser will help you out, as tax planning constitutes one of his main duties.
E. Debt management
Debt management is crucial. Most people these days have various loans such as home loans, personal loans, car loans, etc that they struggle to pay off. On top of this, the outstanding credit card bills also add further pressure. A personal finance adviser can guide you properly and help you to manage your debt in the most effective way.
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F. Retirement planning
You have to plan ahead and build you a good corpus for your post-retirement years. This needs a lot of planning and precision. Your financial advise helps you to make a productive plan through which you can save more for the years to come.
G. Legacy planning
Death is the greatest eventuality of life and we all must prepare for you. You would not want your family members getting into disputes over your wealth after you are gone, so you need to ensure your legacy planning happens and everyone knows about your plans. Your financial adviser can help you make a will and distribute your wealth in a way that you find suitable.
A personal finance adviser, therefore, assists you in making the correct financial decisions. You can do it all by yourself, but you may not know the right mechanisms and tools. Your financial adviser puts you on the right path and
Who needs a personal finance manager?
Anyone who looks out for a better lifestyle within the financial resources they have needs a personal finance manager. The manager tells you how to use the money you have to make it grow while you take care of your financial responsibilities. You may need a wealth manager when:
1. Just starting out
Young executives who are just starting their careers could benefit from hiring a financial adviser. If you are at such a point in your life, you need to get a wealth manager to help you understand the financial dealings. He can also tell you all about the investment opportunities and guide you in your debt management. Implement the ideas and see an upward growth in your wealth as you progress in your career.
2. At an important juncture of life
You may also require the services of a personal finance adviser if you are at an important juncture of life such as your marriage or parenthood. At such a time, the advice of a wealth manager proves to be absolutely priceless. You may be confused about how to manage your finances. The personal finance adviser will guide you and make the best possible financial plan for you to follow.
3. Starting a new line of work
If you are starting a new career, you will need to hire a wealth manager. The manager will ensure you get the most out of your income, no matter how little or reduced it is. He will also guide you about the new tax norms, the investment options, etc.
4. About to retire
If you are about to retire, or you have already retired, you should speak to a personal finance adviser and understand how you can plan your finances from here on. There are bound to be many changes to your earning patterns and so you need a fresh and effective financial plan. The wealth manager can help you to make sound investments and also guide in other areas such as tax payments.
Remember here that a personal financial manager may charge you a few thousand rupees or several lac of rupees. You need to find someone whom you can afford. Do not go beyond your means as that will put undue financial stress upon you.
Why you should take help of personal finance managers to plan your finances?
A financial adviser offers an impartial, third-party analysis. You may have a good financial knowledge and your investments may be sound, but you would still not be able to make the best out of your financial plan unless you put in all your time into it. With your job, your familial responsibilities and your leisure time activities, you may find it difficult to devote all your time to just planning your finances. This is the main reason why you need a wealth manager.
Then, if you are not confident enough about financial planning, you most definitely should take the help of a wealth manager. Do not trust the internet to give you advice, especially on such a crucial topic. You cannot possibly risk your wealth dwindling because of improper investments that were made without proper assessment. Take the help of a personal finance adviser and manage your money in the best possible manner.
And finally, if you want to secure your future, you should take the help of a financial adviser. You may be a single person in your thirties now but in a few years, you may be a family man who is about to retire. You need to think about the future and ensure you have an economically carpeted existence at all times. You as well as your loved ones should never have to face any financial troubles, and this can only be achieved if you plan your finances well. Take the help of a personal finance adviser and the job will become a lot easier for you.
If you are an employer, we can help you plan for your employees finances.
When is it time to hire a financial adviser?
You need to hire a personal finance manager when you feel a bit lost and think you need a road-map to get back into the game. A wealth manager can, at such a time, help you get back on track by showing you the correct financial route to be on.
Types of personal finance advisers in India
If you are convinced that you need a wealth manager, you should look to get someone who would be of great use to you. Did you know that there are different types of personal financial advisers in India? They include:
- Distributors – Distributors, such as the mutual fund agents, can act as wonderful financial managers. They can correctly advise you on the type of mutual fund to invest in, after understanding your financial standing.
- Bancassurance managers – The bancassurance relationship managers can also function as excellent personal financial advisers. They can guide you on how you can choose correct insurance cum investment tools and put you on the proper financial path.
- Insurance agents – Apart from your investments such as mutual funds and equities, the life insurance plans also form an important part of your portfolio. You need to have the correct plans that offer an investment opportunity while covering your life. A good life insurance agent can guide you here and help you to select the best option.
- Brokers – A wealth manager who manages your investment portfolio and earns a brokerage from the AUM (assets under management) can be a very good personal financial adviser. However, you need to select your broker very carefully as you will plan your entire investment based on what he tells you.
- Paid RIA – An RIA, or a registered investment adviser, is a paid wealth manager whose primary and only job is to offer advice on investments. RIAs are very accurate financial advisers who many people hire. They work in exchange for a fee.
What is robo-advisory?
Robo-advisory is a type of digital financial advice. It is delivered to the client via a mobile application or through a web portal. It involves very little human intervention. The advice is generally based on formula and mathematical calculations and so is considered to be precise and reliable.
The final word
A personal finance adviser is a person who guides on how to stay financially secure and make your money grow. They alert you about the dangers of incorrect investments and inform you about the correct channels through which your wealth can grow. Whether you are a youngster just starting out with investments and financial planning or you are an industry veteran with many years of experience under your belt, you can always benefit by hiring a personal finance manager. Choose your manager wisely and work with him closely to ensure you get the best value out of the partnership.