When is the right time to hire a financial planner?

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While a will can provide a basic estate and is very important to each person, a trust can support more holistic planning.

While most of us understand the importance of saving and investing for the future, especially since the start of the pandemic, experts say some may not have the time to or the skills to follow a long-term plan.

Financial planners / advisers come in. Anup Bansal, Director of Investments at Scripbox, says: “A financial planner brings the expertise required to guide an individual through their wealth management journey and help them manage their finances.

Here are some of the cases where you should call in a professional;

1. When you want to get started in creating wealth

Hiring a financial planner is an ideal decision when you are ready to take control of your present and future financial situation.

Bansal says, “A good financial planner is like a money specialist – who first strives to understand your current situation, future goals, and emotional biases about wealth, then spends considerable time. to develop a complete personalized plan for you.

2. To obtain personalized direction and clarity on the objectives of the portfolio

Industry experts say many are starting to invest in ad hoc ways, trying to replicate the success of friends and peers based on suggestions or hearsay. Keep in mind that everyone’s risk appetite and investment outlook is different, and what works for someone else may not work for another.

Bansal says: “A cluttered and unmanaged portfolio or inadequate performance are reasons enough to seek professional help. A financial planner can help assess current investments in the context of their risk profile while suggesting corrective actions for smoother driving in the future.

3. Dealing with a major life-changing event

“Whenever you are faced with a major life-changing event, your finances are also affected. You could get married, have a baby, or look to buy a new home. You will need to plan and align your finances with the event as well as the impact it could have on you and your family’s future, ”says Bansal.

Therefore, knowing that he or she has faced many of these situations before, a financial advisor can offer sound advice and help navigate the event with a conservative, long-term approach.

4. Sudden windfall gains

There can be many flows, starting with gains from an inheritance, paying for insurance, selling assets, going public, exiting a company, or unexpected gains from lotteries or contests that can spin anyone’s fortunes. Having said that, it is quite common for people to start spending too much money or get overwhelmed by the situation, thus making bad personal and financial decisions.

Experts say a financial consultant can advise on the various legal, financial, and tax implications surrounding different types of windfall gains with the right investment plan to protect and grow that wealth.

5. Approaching retirement

The money management approach shifts from maximizing wealth to preserving capital and generating income as one approaches retirement. This may require a complete overhaul of the portfolio towards low risk assets that can generate a steady stream of income.

Bansal says: “As they approach retirement, you need a complete reassessment of their financial needs to ensure that their corpus lasts longer and that they are not at risk of inflation and longevity. . A good financial advisor can help create a “good night” portfolio with the right guarantees built in. “

6. Sails adjustment

Experts say changes in financial plans along the way are inevitable. Some can be caused by personal factors like the desire to start a new business or the loss of a family member who is earning an income, while others can be driven by external forces like the pandemic we are in. currently facing. A financial planner understands these risks and the market situation on a deeper level and can help plan accordingly.

“For example, having adequate life and health insurance coverage so that there is a minimum of disruption. Even if personal and financial goals change, having a financial planner ensures that one is on track to be successful with one’s finances despite the uncertainty of the market, ”says Bansal.

7. When optimizing tax liability

A significant increase in income, a change in tax regime, or the general need to make the most of various tax breaks, experts say is another opportunity to hire a financial planner. Bansal says: “While you may be aware of the main deductions, for example under section 80C or 80D, a financial expert can help you maximize the benefits available to your tax and even convert potential losses into. opportunities to save tax. “

Likewise, experts say that people who are hesitant about their investments, whether due to a lack of understanding of financial products, investment processes, or a general aversion to stomach volatility, in particular. alternative stocks or assets, should opt for a financial planner.

Bansal adds, “A financial planner uses a holistic and integrated approach to guide an individual on the potential of different investments while bringing an objective perspective to the investor’s financial plan. They don’t offer products based on commissions or sales targets – instead, they always have the best interests of the investor in mind.

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