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MAJOR PROBLEMS IN WEALTH ADVISORY IN INDIA

Updated: Aug 2, 2019

Why shall Wealth Management consist only of a few Goal - Based Plans. With only a handful of smart advisors in India - this remains a huge challenge and opportunity !

The Investment/Wealth Advisory problem in India is five-fold:


  • The Distributor of Investment Products is also the advisor - This creates bias in terms of investment advice, something which is definitely not right for the investor.

SEBI itself has stated that unbiased investment advice is the need of the hour. However, due to the lack of awareness investors are in a sense being duped by the so-called investment advisors, and they are essentially falling into an unintended trap, by thinking that they are investing at the advice of "professionals".

There are relatively handful of professionals that have a good investment advisory track record. The other IFAs (Investment Financial Advisors) are relatively inexperienced and do not have the ability or experience to rightly advise investors on their money. Most investment advisors are also not CFP (Certified Financial Planners) or any Certified Professional Qualification holders. 


Difficult to Ascertain Optimal Wealth Management


“Have you ever faced a situation wherein you did not know where to put your money, which loan to take, which insurance to go for ? You were simply clueless...”

  • 2. Why 100% in Equity ?


Every investment advisor wants Investors to invest 100% of their income in Equity, equity investments outperform investors in the long term.


However, what the advisors fail to understand that most investors today, do not have the WITHHOLDING ABILITY or CAPABILITY to withstand the fall in Investment Value. Individuals in India are running on minimum liquidity in their banks. The moment inflation goes up and the individuals feel the pain, they are more inclined to need liquid money/cash to meet even their day to day expenses. 

We have always seen that once an economy Inflates or Deflates strongly, equities tend to drastically underperform. Due to this inflation, the purchasing power of the individual is extremely reduced. 

Moreover, equities are a good objective to meet financial plans and obligations in the long term (10-15 years). However, in the short term, we have seen that more often than not equity market underperforms on the expectations of investors, thereby leading to extreme disarray in Financial Planning. 

Advisors also do not understand that most individuals invest their savings (money that they might need in the near future) and not their Spare Cash (money which they can invest and forget) lying around. The logic of nearly 100% investment in equity might be ideal for a High Net Worth Individual, as they face less liquidity crunch but it is not the same for the Retail Investors, which accounts for nearly 90% of the Indian Population.

  • Investment advisory today consists pre-defined and subjective advisory decisions.


For eg - A short term investor must invest in debt funds/liquid funds or Funds of only HDFC, ICICI are good. Jack Ma has said that the future of service/product industry is CUSTOMISATION(2018). Something that is hugely lacking in this industry.  Moreover, advising for individuals is less objective and more subjective to the liking of the respective "Advisor (or) Distributor". We are trying to solve this problem by - CUSTOMISING THE INVESTMENT ADVISORY FOR AN INDIVIDUAL


  • EVERYDAY HASSLE - Keeping Track of Money

Individuals in India are tired of the hassle of keeping track of their Investments, Income and Expenses. They have an advisor for equity, another for Mutual Funds, another for Insurance/Loans. During the time of filing Income Tax or trying to record everything, they are in search of their investment record, their income sources(multiple sources of income these days), their annual expenses(online and offline), their assets (gold,etc.)multiple other avenues wherein their money/assets are parked or spent but they themselves are unaware about. In addition to that, they do not have an IDEAL SPENDING RATIO when it comes to Income and Expenses. Lack of an ideal Spending Ratio leads to over spending, leading to debt crisis for the individual.

  • Individuals is also not aware about their IDEAL INVESTMENT PORTFOLIO DIVERSIFICATION.

Disproportionate Portfolio Diversification leads to improper investment budgeting, leading to investor making - LESS MONEY ON HIS MONEY. For eg: Individual has 15000 Rs. - He invests 10000 in Gold, keeps 4000 in Fixed Deposits and has 1000 in Mutual Funds. However, if investment is customised to his needs, we see that he shall spend 30% on gold, 40% in Mutual Funds, 20% on Fixed Deposits, 10% in Savings Bank. This shows that an investor is not aware about - HOW MUCH HE SHALL INVEST, and WHERE EXACTLY SHALL HE INVEST !   

This leads us to the problem of - LACK OF FINANCIAL LITERACY/AWARENESS - The Major Problem that this Venture targets to solve.


  • Financial Decision Making Becoming Worse !


When an Individual has a future expense- Child's education, buy a house, etc., he needs to take the decision based on objective and subjective factors. Often individuals undertake not-so-wise decisions that are due to emotional pressure. This leads to improper judgement that is harmful to the individual. We are here to help the individual undertake the OBJECTIVE DECISION, that is where the Expenditure is Financially viable or not ! 



Wealth Management is very different from just Goal - Based Planning”


Why Monech ?


With Monech, the Individual can understand - HOW MUCH TO INVEST, WHERE TO INVEST, HOW TO DIVERSIFY INVESTMENTS IN ASSET CLASSES, WHAT TO DO IN SITUATION OF CRISIS, WHEN TO HOLD, WHEN TO TRANSFER(including Loans, Insurance and Investments), WHEN TO INCREASE INVESTMENTS, HOW TO WITHDRAW MONEY AT THE LEAST POSSIBLE COST, WHETHER YOUR EXPENSES/INVESTMENTS ARE IDEAL, IF YOU CAN AFFORD YOUR EXPENSES, WHETHER YOUR INCOME IS SUPPLEMENTING YOUR EXPENSES OR NOT !

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