Financial Planning is akin to playing a sport with defined rules. Indians by nature are more prone to playing games for recreation rather than for achieving.

What are your views on the current state of awareness on financial planning in India?

Financial Planning is akin to playing a sport with defined rules. Indians by nature are more prone to playing games for recreation rather than for achieving some pre-defined goals and objectives. It is not that people are not aware of the benefits of planning and following a systematic approach. It is simply not in our DNA. Look at any field/discipline – education, healthcare, nutrition, it is the same. And of course, this is one area where you cannot blame anybody else!

So what is the way forward? It requires great discipline on the part of the advisor to keep repeating the golden rules and nauseam like a parent does to a child, in the hope that the ward will at least pass the test. This is very important and the measure of it lies in what may happen without financial planning inputs and perseverance of the advisor.

Do you think that the need for financial planning in India is different compared with other countries, especially the developed world?

Yes, absolutely. These thoughts have to be viewed in the Indian context of lack of social security, low insurance penetration, vast majority of the population not being covered under any retirement benefits etc. Also, India being a developing economy with a growing population, one cannot lose sight of the facts – high inflation will continue, purchasing power will keep increasing leading to galloping costs for every conceivable product/service, low employability or lack of right skill sets.

Here, I will give you an example - The incidence of job losses is commonplace with a downturn in the economy, however, when it happens to people above a certain age, the ability to seek re-employment diminishes substantially based on last drawn salary levels and cheaper alternate options available to employers. A person in such a situation may have to forcibly strike out as an entrepreneur (higher risk than a salaried occupation) whereas all his life he may have always preferred “low” risk options for his savings and investments. This can be very disturbing for anybody.

How long have you been in the financial advisory industry? During this time in the industry, what are the five common investment mistakes that you have observed?

I have completed 20 years in the financial services industry – the first 4 years were as an employed professional in corporate finance and the last 16 years as an independent advisor spanning multiple financial services including investments, mortgages, corporate finance, insurance and financial planning.

The 5 common mistakes - I will highlight them in terms of not how often people make them, but, in terms of the damage they cause to their future goals and needs.

• Lack of self-awareness of what our goals and objectives should be – unlike westerners we don’t have the habit of putting down things on paper. This lack of self-awareness is substituted by "over the top" eagerness to discuss about markets/products/strategies. It is something similar to going to a doctor and discussing medicines/diagnostic & surgical procedures but not talking about complaints and symptoms.


• Savers and investors don’t pay much attention to the need and the process of identifying a good advisor. They choose an advisor the way they choose their provisions store – approach the nearest outlet. A better way to choosing an advisor would be much the same way we choose a doctor – check his background, specialization, referral check with a few existing clients etc.


• Do your due diligence before and not after you have put your money in a product.


• Chasing returns - Most people buy “products” based on “returns” (expectations) without any reference to their needs. That is why you have retired people being sold ULIPs with 5 year lock-ins. Liquidity, Risk and Real Returns – the holy trinity of any investment. These are a must evaluate list of parameters and strictly in this order of priority. Any other way of investment analysis is a sure shot recipe for disaster.


• Most of us do not document our investments/savings properly, as a result, in case of an unforeseen calamity; the consequences can leave the survivors in complete disarray. The need for documentation, filing, preparing a Will, familiarizing the family with the advisor etc. are must dos for everybody.