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Most of us tend to think that planning on investment portfolios for attainment of goals is a one time job. However it is not true; we all need to review our investment portfolios on a regular basis and also take the help of professional financial planners.

What does a Professional Financial Advice mean in portfolio management?

Making a habit of rebalancing financial portfolios:

Most of us make smart financial plans that are based on the number of earning years, financial commitments and the level of risk we can take up at the time of planning. But it is found that our financial commitments and the level of risk we could take up with age changes. Our financial commitments may increase with increase in family commitments, increase in standard of living and disability or otherwise of a family member. Age could also make us in a position to take lesser risk as also the level of inflation could dictate a rebalancing of our portfolios.

Believe me, life is a process of change and this applies to our asset allocation of our investments too and we need to change them to meet our changed needs. Taking a professional financial advice makes for reduced risk and helps to improve our returns and makes for alignment of our investment to meet our financial goals. Truly it makes for good financial health.

Professional financial advice is important to take care of early loss of earning:

We all set our financial plans based on what we pursue when we set up these plans. It could be when we are young, however we need to understand that life is not predictable and it is quite possible that we may fail to earn much before our retirement due to unforeseen causes like disability and death. This demands that we foresee and cover the financial risk it could impose on us and/our families. Probably a professional financial advice would convince us of the need to take up some life or disability insurance.     

A good financial proof retirement makes a professional financial advice necessary:

Youth never allows us to think of the additional expenses that old age involves and getting a professional financial advice or doing a financial review periodically would tell us about the additional expenses related to health in old age would involve. We may need expenses for long term care, critical illness and other costly medicines. In addition we may need more money to get help as we would not be able to be active physically. Most of us have failed to look into this need.

Assuring ourselves that we have right amount of liquidity:

We all need some amount of liquidity to be able to meet our immediate financial commitments; however we cannot afford to have too much liquidity in our investment portfolios because we would lose on profitability. This would mean missing on our long term financial goals in life. Creation of wealth with a financially sound retirement and old age involves making sure that the right amount of liquidity is maintained. Maintenance of right liquidity means setting aside some money for emergencies and immediate expenses. This would help us to not lose on profitability either with having more liquid assets or losing on selling good portfolios in an emergency. 

Professional financial advice helps for transfer of wealth to beneficiaries effectively:

It is right to say that the most appropriate estate planning can be done with a professional financial advice. Estate planning is not easy and most of us may be wrong in assuming that the preparation of a will is all that is got to be done. Proper estate planning would mean making for transfer of maximum wealth to our beneficiaries. It would involve reducing on taxes and probate duty on death too. In case of insurance policies it would involve keeping the family informed of all the formalities to get the money on time. We would surely agree that we would like our family to be taken care of in the most appropriate way even on death.

Second opinion ensures investments for the right purpose:

When we take a professional financial advice we would be able to find out investments that we have not made for the right purpose. These investments could be those that we have bought because someone just told us for their own financial gains or we were a part of the organization that sold these products. On analysis we may find that the investment does not meet our financial goals.

A professional financial advice is definitely better than the ones given by investment agents because this opinion is not based on just getting commission or brokerage on investments. Those offering professional financial advice are only offered a fee for their services and are impartial in their opinion. They are in a position to best determine if our investment portfolio is efficient enough to help us achieve our financial goals.

The author is Ramalingam K, an MBA (Finance) and Certified Financial Planner. He is the Director and Chief Financial Planner of Holistic Investment Planners ( a firm that offers Financial Planning and Wealth Management. He can be reached at

Published by

Ramalingam K
(Founder & Director - Holistic Investment Planners (P) Limited)
Category Others   Report

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