Many people in the BFSI space need an IFA. Some of the real smart people know it. It is the pseudo intellectuals who think that they can handle it themselves.

I met one CEO who thought that he could NEVER sell his own shares. It took me 16 horses to pull him over to my side. I got him to do a SIP of – Rs.4L every month in a multi cap fund. He would sell Rs. 4L of his shares and put it into ad sip….he has been doing it for 12-13 years…he has just changed funds and increased the amount from Rs. 4 to 7L a month.

However I do not know whether any CIO will admit to needing an IFA. In India (I have no clue how it is abroad) people who think that they know how to pick stocks or fund schemes think they know personal finance!

who will ask them the following…

• have you made a will?
• is the will notarized, and / or registered?
• are your nominations current?
• who removes the bias in your PERSONAL portfolio?
• are your parents adequately insured?
• how are you going to give your wealth to your children?
• How are you planning to share your wealth with your siblings?
• will you invest in the start up of a nephew or your daughter’s classmate?

Personal financial planning is really far bigger than picking up a few funds or stocks and “hoping” that reversion to the mean will ensure that all equity funds will give 24% p.a. – even Franklin India Bluechip 🙂

What about CXO of a bank selling bank shares and buying mutual fund and life insurance company shares? What about 90% exposure to one terribly over-rated sector called “Bfsi” – when you are working in the same sector???

What about a CXO who had not nominated in any of his investments? Not even company Provident fund. Oops let me correct myself. His ex-wife was the nominee! Imagine what the “new” wife would have had to go through if this genius had died?

Most of us need an IFA. A good IFA who can help us with our documents (even asking whether the Pan card, aadhar card, passport…are all carrying the same name),  making a will (lawyers suck!), ……and tons of other risk reduction techniques. Knowing investing is great, but that is not enough. You need to understand risk, returns, goal based withdrawals, inter generational transfers, medical insurance – base risk, top up, super top up, etc.

However many CXO are too proud to accept that they need help. Too many IFA lack the guts to approach senior people. Deadly combination indeed.