Should I Use A Financial Advisor Or Do It Myself?

Financial Advisor Importance

An advisor will help you in selecting the right funds for inculcating investment discipline to achieve financial goals in the given time period. If one desires to seek professional advice from a SEBI registered Investment Advisor or a financial planner. 

A SEBI’s registered Investment Adviser will charge for the bouquet of services provided. It’s high time that one should understand that for Do-it-Yourself investors, it’s not an easy job.  The ones who have time and skill to research, select and review mutual funds on their own. Not only that, they do have to follow the requisite investment discipline. When it comes to the market, the investment discipline is predominant.

Investors who are habitual of do-it-yourself in a Mutual Fund scheme shall know, that they should consider factors such as redemption, exit load, and capital gains liability may stand straight. Moreover, the new investments will suffix the fresh lock-in period.

Contrarily, if one is not confident about one’s research skills, the investment discipline is reckoned, better to stick to a good local distributor and invest peacefully.

Do not be prey for a meager excess return. Understand that a small difference in expenses will synthesize into a large difference in return over the long term. However, the cost of picking a poor fund unknowingly or a portfolio and investment indiscipline can be much higher.

There are some portfolios where investors have invested in say 20 mutual funds and not more than Rs 5 thousand in each of those funds. They believe that they are diversifying and many invest in internet research ranking-based funds only. A few think 15-18% p.a. is enough in equity funds. Such unaware investors must seek professional advice. It is always advisable to do a cost-benefit analysis both qualitative & quantitative, before making any investment. 

Consider while investing in mutual funds.

Size of the portfolio
The total return is the biggest PULL factor but one should check the impact in absolute terms. As we all know that there lies a difference between expense ratios but that is negligible. The loss of expertise that is worth non-countable in real terms. On the other hand, if you tend to select the wrong category of fund, the difference between the best and the worst performing fund is a whopping 48% (as per the past data averages ).

Records of Investment
No AMC will inform you about the facts that, if you are managing a portfolio of say 8-10 mutual fund schemes of 5 mutual fund houses, then one needs to keep all the details of all the schemes separately. In case of emergency or some mishappening, you and your family must first trace all the details. An important & mandatorily fact to mention here is that in 2020 around INR. 1.5 lacs crores of investors’ wealth is lying unclaimed (Ghosh! it’s a big amount) in different financial products in India (Source: The only reason is that either the investor forgets about the investment or his/ her legal heirs are unable to trace the record of the above after their death hence no claims.

The basic thumb rule of personal finance states that all investments should be consolidated, concentrated, or centralized. If you invest through MyFinopedia with a single unified mutual fund account, then your nominee can access all the details through a single window. Remembering the password of 10 different accounts is a huge hassle. Once, your email id is registered, you will get all the statements online on your mail id, and hence no one other than you can access them.

Documentation is a huge pester in it-yourself thing for both online & offline investors. For each investment one has to do a complete set of documentation. And what if one is an Active investors, it will become phantasm. With Team MyFinopedia, one can simply place an order to buy or redeem or switch their units within a few seconds without any documentation.

Operational struggle
For investors who are not comfortable with online operations be it form filling or payment procedures. For every transaction, they have to visit the branch of the fund house. MyFinopedia brings you all sorts of support & hassle-free life, as our executive will come to pick up all sorts of documentation & signatory wherever required. 

Investment Advice
The best thing about advisors and planners is that they explain the very basics of mutual funds. The detailed explanation about funds and according to investor’s appetite helps you to take the right decision for investments. Even the AMFI accepts that the mandatory basic know-how about mutual funds in India is only possible due to the advisors in the market and their survival is due to the unbiased expertise these experts are offering.

A Big hassle
Do It Yourself is a big tiresome job at the macro level. Any active investor who churns a portfolio regularly will waste a lot of time on documentation and other requirements. One invests to live a peaceful and worry-free life. What if you are living a stressful life due to these factors? One should be able to focus on market activity rather than filling out forms.

Life should be mess-free and investments should be kept as effortless as one can.