Benefits of having a financial plan to achieve 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 achieve long-term life goals?

Financial plans help individuals create and set goals to achieve. 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 assist in the decision-making process and allocate savings or capital to achieve medium- and long-term financial milestones. Financial plans help create the goals and once you have decided 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 could the investment and wealth management ecosystems be linked?

The main objective of investing is to create assets, which in turn can generate cash flow and appreciate in relation to the initial capital invested, with the aim of fighting inflation in the medium and long term. We all want our money to work for us. Investment can be in asset classes such as real estate, stocks, fixed income securities, bonds, precious metals, commodities, etc. Investing or investments are part of wealth management. A successful investment over a longer period (15 to 20 years and more) helps to create wealth. One must understand the basic principles of wealth management to preserve the wealth created and pass this wealth on to the future generation in a structured way. Creating trusts or wills or having an estate plan is also an integral part of wealth management. Investments, asset allocation, portfolio of uncorrelated assets and periodic manager reviews are all integral parts of the wealth management process.

How Equirus provides 360 solutions to its clients from product providers in equities, fixed income, real estate, alternative investment classes, estate planning and tax advice

Our approach has always been solution-focused rather than product-focused. First, we establish a risk profile to assess the client’s investment objective, risk appetite and time horizon. We create a strategic asset allocation plan based on client risk profiling. Product selection comes next. We recommend shortlisted products that are researched by our product teams and build a portfolio around specific customer needs. Our experts are industry leaders in scenario analysis, strategic asset allocation and portfolio construction. We have a rigor around portfolio reviews and do it with a regular frequency. We maintain full transparency to build lasting relationships with our customers through all our actions.

How are financial institutions empowering themselves using advanced technologies?

Technology is indeed at the forefront of any financial institution, especially post-Covid. Technology is now the bedrock of any customer proposition. Technology has not only helped to acquire customers digitally, but has also met customer needs, enabling them to conduct end-to-end digital transactions. Social media platforms have become the means to demonstrate and market business propositions and social media marketing or digital team is one of the key teams in any financial institution. AI-based tools are gaining traction for drawing quality conclusions about client portfolios. Ease of transaction is a thing of the past and transactions are now done in just a few clicks. High quality customer reports are now generated using technology. Tech helps prepare extensive client portfolio presentations that give very meaningful insight to RM and clients. This helps to allocate the extra capital wisely.

How can investors avoid wealth destroyers?

When it comes to investing, asset allocation should be at the heart of decision-making. Investors should avoid getting carried away with the short-term performance of an asset class. The idea of ​​chasing a performing asset class and over-allocating is a surefire way to destroy wealth. Predictive investing should be avoided in all circumstances. One of the best ways to invest is to set a goal when investing. The more needs/goal based investments are, the more the odds are in favor of the investor.

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