Highlights

  • You need to have a plan for your money: Suresh Sadagopan
  • A financial advisor must be well aware of the status and requirement of their clients before suggesting an investment strategy: Suresh Sadagopan

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Invest Smart: How to decide if you need a financial advisor?

While emphasising on having a proper financial plan, Suresh Sadagopan also pointed out at the need for having enough trust between the clients and the financial advisors

Invest Smart: How to decide if you need a financial advisor?

Comfort comes with planning. Having a financial plan in place propels you towards the goals you want to achieve to have a life of your dreams. While some are well-versed in handling their finance, some might prefer to have a financial advisor.

In this episode of Invest Smart we dwell in to the deciding factors of hiring a financial advisor. Suresh Sadagopan, Founder, Ladder7 Financial Advisories sheds light on what a financial advisor brings to the table.

Financial Planning

Sadagopan emphasises on having a proper financial plan as the major part of our prime years are spent in earning money. However, with time, as the earnings increase we stop paying the attention it requires. Sadagopan points out that this lack of attention stems from the lack of interest most people have towards finances. But anybody who is earning should have a plan for their money, he insists.

"Over a period of time we start earning a very significant amount of money. Once we start earning that much amount of money, we don't pay too much attention to it", says Suresh Sadagopan. "You need to have a plan for your money", he adds.

Who needs a financial advisor?

According to Sadagopan, a financial advisor is not neccessary if you are able to spend your time on keeping yourself up to date on all the developments regarding product, economy and markets. This inclination, he estimates, is exhibited by only 1% of the people.

The rest 99% get influenced by their friends, colleagues, television and newspaper while taking financial decisions. These people require a financial advisor, Sadagopan says.

"Mostly you do what your friend is doing, what your colleague is doing, what you have watched on television, what you have read on newspaper. That doesn't work well for most people. 99% of people require a financial advisor", Said Sadagopan

Financial advisor's role

Meanwhile, a financial advisor must be well aware of the status and requirement of their clients before suggesting an investment strategy. Sadagopan says having a full account of the investor's goals and financial state will help in deciding the kind of products, asset allocation, and risk.

Sadagopan also insists on establishing trust between the clients and advisors. He mentions that a client should both trust the advisor as well as understand the advices.

If you do not have a financial advisor yet, Sadagopan insists on having a liquidity to cover 3 to 6 months of expenses including the EMIs and the near term goals. He also pointed out the importance of having a contigency fund, appropriate insurances (medical and life). Sadagopan further insisted on creating a retirement fund. He says, once all of this is done, you can spend the rest of the money guilt free.


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