A guide can make your financial journey easier

A professional consultant can help you choose investments and risk-mitigation measures, and implement them.

My friend Kirit was glowing as he narrated details of the places visited and the experiences he had during his recent six-month car journey across India’s length and breadth. He had dreamt of undertaking such a journey for many years and had finally taken a break from his work to fulfil it. He had planned the trip carefully, including enlisting a professional consultant’s help.

When Kirit mentioned that the professional consultant had played a key role in completing the trip, my interest was piqued. I pressed him for more details.

The professional first worked with Kirit on planning the trip. He chose the various destinations after taking into account Kirit’s interests, time, and resources. He planned in detail the various types of cars to be hired for each leg of the journey and helped him decide on the must-visit and the nice-to-visit destinations. He made Kirit understand that delays were inevitable in such a long trip, kept buffers in the itinerary for them, and suggested contingency plans.

The professional also acted as a remote guide, navigator and counsellor during the trip. He answered the inevitable queries, helped finalise arrangements for hiring cars from various providers during the various legs of the journey, provided spot improvisations to the plan, and so on.  

Once, the car Kirit was travelling in met with an accident. The professional helped Kirit calm down, then guided him as he implemented the contingency plan of calling an alternative car from the next big town. His guidance meant the accident resulted in only a small delay.  

Kirit mentioned he had found even planning the trip so daunting he had been postponing it until the professional motivated him to undertake it.  

On the cost paid to the professional, Kirit was emphatic it would have cost him more, even after accounting for the professional’s fee, if he had executed the journey on his own.

When asked whether he could have reduced the fees charged by the professional by using him just for planning, Kirit was clear. He said he would not have embarked on the trip without the professional’s assistance in executing the plan and the comfort his availability provided.  

“Could you not have used the extensive resources available on the internet and planned and executed this yourself?” I asked. Kirit said resources on the internet are useful in generating options on destinations, routes, and service providers. But a once-in-a-lifetime trip like this required a professional to put it all together for him in a package he found convincing.

There are many parallels between Kirit’s use of a professional and the way in which investors can use professional help to plan their financial lives.

One, you only live once, hence planning for it is extremely important. Two, an experienced professional can help you prioritise your goals after taking into account your needs, risk-taking ability, and the time and resources available. Three, the professional can help you choose the actual investments and risk-mitigation measures, and implement both. Four, she can help manage expectations. And five, she is available to provide the right advice whenever an unforeseen good or adverse event occurs. She can help take advantage of good events and mitigate the impact of adverse ones.

Like Kirit, most clients find the task of planning and executing so daunting they keep putting it off. Consequently, they lead less enriching lives than they should. The biggest service a professional provides is to help overcome inertia and complacency vis-à-vis the plan, which aids in achieving the desired objectives.

The writer heads Fee-Only Investment Advisors LLP, a Sebi-registered investment advisor Twitter: @harshroongta