Benefits Of Having A Financial Plan To Meet Long-Term Life Goals

By Rahul Roy Chaudhary

Chief Executive Officer- Wealth Equirus

What are the benefits of having a financial plan in place to meet long-term life goals? 

Financial plans help individuals create and set goals to work towards. Goals are what give people direction and purpose in their lives. When individuals have clear goals in mind, it gives them something to focus on. Financial Plans help in the decision-making process, and allocate savings or capital, to achieve the medium- and long-term financial milestones. Financial Plans help create the goals and once you decide on your long-term goals, it becomes relatively easy to arrive at a Strategic Asset Allocation, which then becomes the foundation of your journey to achieve those goals.

How might the investing and wealth management ecosystems be linked together?

The main purpose of investing is to create Assets, which can in turn generate cash flows, and appreciate over initial capital invested, with the intent to beat inflation on a medium to long-term timeline. All of us want our money to work for us. Investing can be across Asset Classes like Real Estate, Equities, Fixed Income, Bonds, Precious Metals, Commodities, etc. Investing or Investments are part of Wealth Management. Successful Investing over a longer timeline (15 to 20 Years plus) helps create Wealth. One needs to understand the basic tenets of Wealth management to preserve the wealth created and pass that wealth to the forthcoming generation in a structured way. Creation of Trusts or Will or having a succession plan is also an integral part of Wealth Management. Investments, Asset Allocation, Portfolio of Non-correlated assets, and Periodic Manager Reviews are all integral parts of the Wealth Management process.

How does Equirus provide 360 solutions to its customers from product providers in equity, fixed income, real estate, alternate investment classes, Estate Planning and Tax Advisor

Our approach has always been solution-oriented rather than product focused. As a first step, we do Risk Profiling to evaluate the client’s investment objective, risk appetite & time horizon. We create a Strategic Asset Allocation plan basis clients' Risk Profiling. Product selection comes next. We recommend shortlisted products which are researched by our product teams and build a portfolio around the client’s specific needs. Our experts are leaders in the field when it comes to scenario analysis, strategic Asset Allocation, and construction of portfolios. We have a rigor around portfolio reviews and do it with a regular frequency. We maintain complete transparency to build lasting relationships with our clients through all our actions.

How Financial institutions are empowering themselves by using cutting-edge technologies?

Technology is indeed at the forefront of any Financial Institution, especially post Covid. Technology is now the bedrock of any client proposition. Technology has not only helped acquire clients digitally but also address the client's needs allowing clients to transact digitally end to end. Social Media platforms have become the mediums to demonstrate and market business propositions and social media marketing or the digital team is one of the key teams for any financial institution. AI-based tools are gaining ground to draw quality inferences on client portfolios. Ease of transaction is thing of the past and transactions are now happening with few clicks. High quality client reports are now generated with the help of technology. Tech is assisting to prepare extensive Client portfolio decks which give very meaningful insight to the RM and the clients. This helps to allocate incremental capital judiciously.

How Investors Can Avoid Wealth Destroyers?

When it comes to investing, Asset Allocation should be at the core of decision-making. Investors should avoid getting carried away by the short-term performance of any Asset class. The idea to chase a performing asset class and over allocating is a sure shot way for wealth destruction. Prediction investing needs to be avoided under any circumstances. One of the better ways to invest is to attach a goal when investing. The more need/goal based the investments are, the more the odds are in favour of the investor. 

Also Read: Enjoy Your Parenthood By Planning Your Finances Early