There are changes happening in every aspect in our lives. One change that has affected our lives is the growth in financial needs and products available. The result is that today there is a large number of advisors / distributors or consultants that we are associated with. Though this may not be necessarily a bad development, questions do arise on practicality and need to deal with so many different people. In this article, we try to look from the investors perspective and answer upon some unspoken questions.

Choosing advisors:
The first question that arises is now many advisors should we deal with. Historically, the onus has really been on the client to make the holistic decisions on his/her overall financial well being, and then engaging with traditional advisors for specific products or services. Typically, it would not be surprising to know that most of us would be dealing with at least 3 to 5 traditional advisors, from the following list, at the same time...

Assessing our financial advisory needs:
The right approach would be to not directly hunt for product advisors/distributors but to first look at our needs holistically. By looking at the needs with this purview, we bring greater simplicity and purpose. It is likely that following 4 broad needs would be identified

1. Taxation / Accounting services
2. Risk protection / insurance
3. Wealth creation / investment
4. Banking services

We now attempt to take a closer look at the traditional advisors within the framework of our identified needs...

• Taxation / Accounting services: The CA, as an expert for accounting services, is indispensable. However, if inexperienced or not engaged in financial advisory, he/she may not be in the right position to offer pure investment, portfolio or insurance related advice
• Risk protection / insurance: The next need of insurance and the choice of the advisor would be subjective upon you. You may engage with a life insurance agent and a general insurance agent or preferably with someone who does both. The limitation is that a pure insurance advisor/distributor will not be an investments expert and would instead recommend insurance products for pure investment needs too
• Wealth creation / investment: Ideally a wealth advisor should be approached for investment related needs. Typically he would have products for long term wealth creation in his basket. The products of mutual funds, fixed income products and PMS offer acceptable risk-return trade-off and can be looked positively by small & retail investors. The limitation is that he may not be experienced in insurance to provide advice on same.
• Banking services: The bank relationship, should ideally be best treated as a continuous, service related relationship. The Bank RM, armed with bank info, may offer investment products. However, for small / retail investors it is likely that any product advice is made without proper portfolio / financial planning and is transactional in nature there is inadequate attention & service facilities provided

Financial Advisors / Planners:
With the existence of a plethora of financial needs & products, there is a growing need felt for single window approach to financial decisions. Thus, many traditional advisors are now offering multiple products and comprehensive advice. You may ask your advisor and it is likely that he/she would have multiple products/ services in the advisory basket. Such comprehensive Financial Advisors / Planners offering single window advisory on multiple products are at the top of ladder.

Engaging with Advisors
By principle, it is recommended to deal with advisors that have requisite skills in multiple domains. Clients should engage with advisors offering comprehensive financial planning services. There may be a possibility that your CA also offers Investments / Insurance advisory or your Investments advisor may also have Insurance advisory services and vice versa. The benefits of engaging with single financial advisor / planner for multiple needs / financial planning is as follows:

• Comprehensive view of your entire financial situation & goals
• Optimum utilisation of our resources / capital for right reasons
• Unbiased / product neutral advice
• Best of different worlds available

Exception to the principle can possible in cases where you are not confident about the advisor's knowledge, skills, quality or limitations on product / service offering.

The following matrix summarises the advisors we would be likely to deal with and the services and products expected from them.

To start with, you may approach all your existing advisors and seek information about the different products and services advised and offered. You should specially ask for financial planning services, if any offered.

In brief:
In would be better that we deal with a minimum number of good advisors who are in position to offer the optimal combination of important services and products. Taking the financial planning approach is the best way to deal with a large majority of financial decisions in a holistic manner. This is much better than choosing products first ourselves and then approaching distributors. Also, a person who has knowledge and access to multiple products is likely to be more unbiased and would provide advice which is product neutral, presenting you with the options / products across the board.

Taking about the relationship with your financial advisor, it is indeed a special one. A good relationship is something that has to be treasured by us and at the same time we should also be fair and open regarding our needs & expectations. We should also be ready to share information and pay for quality, unbiased services expected from the financial advisor. The relationship is that where mutual trust, respect and understanding is paramount and so is the ability and intend of the financial advisor to work in your interest.

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Managing expenses is a tough task if you have not budgeted for it. But what about unknown expenses that hit us out of the blue. At times, even expert investors find it difficult to manage such expenses

Stay On Track: Key To Achieving Your Goals in Life

How would you consider your life to be meaningful and successful? I am sure that many would not prefer or will not be able to put a monetary figure here. Success for many of us would mean achieving our dreams in life or helping others achieve their dreams in life. Truth be told, we all have our own dreams in life, like owning a house, our kids foreign education, going on long vacations, comfortable retirement with respect and the likes. The question really is, do we know what exactly are our dreams, how much will they cost and most importantly, whether we are on track to achieve them?

Why Define Goals in life?

Unless you don't define your goals with proper details, you are unlikely to achieve the same. Same is the case with your life dreams. Most of us often invest for our future goals so that we have the money to fulfill them when they arrive. The problem is that most of these investments are generalized, the exact time available for every goal is not known, target amount needed is also unknown and lastly, there is no link between our investments and our goals. How can we be sure that our goals will be achieved if we do not know these important aspects? How can we know if we are on track or there is a gap in our investments? How can we best plan goals to make them feasible and practical? These are important questions needed to be answered.

Enter, your financial advisor or the preciouswealth Wealth Partner. The person who can help you identify and define proper financial needs or goals in life. He/she would also help map /earmark your existing mutual fund investments towards these goals. These are the important activities which will unravel the future plan you will need to adopt to achieve your goals.

How To Track My Financial Goals?

To make your life easier and to help you get organized with your goals and your investments, preciouswealth has brought to you the 'Family Needs Progress Report' on your Client Desk. Firstly, you have to sit with your advisor and do proper estimation and defining work for your goals. Thereafter, the advisor will enter goals and map existing mutual fund investments into the system.

And there you go! you will have your Family Needs Progress Report ready – simple, meaningful and actionable for use! Here is a quick snapshot of what it will look like...

Following is the important information available in the report:

1. List of all your Life Goals + Maturity Date & Time left

2. Target Amount required at a future date for goal achievement + Gap in the same as per current investments done

3. Projected Need for investments: SIP or Lumpsum to ensure goals are on track.

4. Graphical representation for easy understanding and knowing if you are on Track!

Lets' take an example to understand better, the above image shows the Family Needs Progress Report of an investor .

This investor is approaching his retirement. On the top, he has his retirement goal, for which he needs Rs 7.50 Cr in 2 years and five months. He is running an SIP of Rs. 10,000 per month dedicated to his retirement and the current value of his investment is Rs 3.15 Cr. This investment is expected to yield 12% return p.a. and hence when he approaches his retirement, this investment will yield him Rs 4.14 Cr, as against Rs 7.50 Cr required, so there is a gap of Rs. 3.36 Cr.

Now the tool has shown him the Gap in Progress towards his Retirement Goal, and has given him two options to fulfill this gap: (i) he needs to do an SIP of Rs 10,03045. His current SIP is of Rs 10,000, so he needs to do an additional SIP of Rs 9,93,045 or (ii) he has to do a lumpsum investment of Rs 2,55,65,393.

Thus, the investor is very clear where he stands today, where he will reach in the future and what he needs to do to achieve the destination he wants to reach. At the bottom of the report, is a simple consolidation of all the above data along with the amount of mutual fund investments already mapped and yet to be mapped to goals.

Benefits of knowing your progress...

So, hopefully this sample has imparted clarity on how this report can help you manage your family needs. The Family Needs Progress Report helps you in the following ways:

1. Organized: You don't need papers or excel workbooks to mange your family needs. This report has a very simple to understand interface and will have detailed information of all your family needs as shown above. So, it saves you from all the clutter and your universe is just a few clicks away.

2. In Control: This report will show you the Gap in your Progress, and the Plan of Action you need, to ensure that you are always on the right track and at the right speed, so that you reach your target in time.

3. Discipline in investment behavior: This report will help you focus on your goals instead on short term needs or market fluctuations / noise. It will also help you stay on course of your investment planning and remove any short term anxieties. Needless to say, it will bring more maturity, direction and discipline in your investment behavior along with a commitment to achieve your long term dreams.

So the crux is, we can achieve our life goals, if we plan for them and manage them effectively. preciouswealth's Family Needs Progress Report is a tool designed to help you in carrying out your job of goal management conveniently.

You can view this report as: Home page of Client Desk as Family Need Progress Report and in detail format under Consolidated > Family Need Valuation

We hope that this report will contribute to enhancing your financial planning and investing experience.