The Tribune January 26, 2004
Business Section

Personalised Financial Planning Gains Ground
Tribune News Service

Gone are the days when you were at the mercy of financial institutions to safeguard your financial future and plan ways to guide your bank balance. From a handful of options such as fixed deposits, life insurance, education funds, mutual funds, retirement plans, etc offered by large financial institutions, planning has acquired new dimensions. An individual has the option to foresee, desire and chalk out the future according to personal needs.

Available in the West till recently, personal financial planning and investment advisors are fast gaining popularity here.

“Financial planning is akin to getting a customised fit for your clothing from your tailor who understands and appreciates your needs and requirements as compared to buying an expensive readymade garment that always has something bothering you,” says Mr Rajesh Handa, a Panchkula-based expert with an MBA (Finance). He claims to have introduced the concept of personal financial planning in the region.

In an interview with ‘The Tribune’, Mr Handa said with all world economies headed in one direction, financial needs and commitments of individuals have become different and need individual attention as no two persons have the same financial aspirations, incomes, needs and obligations. “Based on the risk profile and the saving capacity of an individual, the goals are prioritised, asset allocation is set out and financial products suggested for achieving the stated goals.”

Customised financial planning goes much beyond planning life and medical insurance needs, children’s education/marriage, planning for a house, comfortable retirement, etc. Individuals can now with help achieve to plan strategies that will help them improve their living standards like keeping pace with the latest automobiles and gadgets in the market.

Mr Handa says, “A financial planner today helps a client review his financial situation, risk assessment and quantifiable identification of future goals.”

Mr Handa says that products like bank fixed deposits and the intricacies of the alternative financial products have made professional advice indispensable. Financial planners are different from financial advisors, who are trained only in specific areas. Planning involves a totalitarian approach and is free from biases towards any specific financial product.

He suggests diversification and asset allocation based on need and risk profile as the twin keys to any investment portfolio.

Financial planning, holds more relevance for the 25-50 age segment. For every five years you postpone savings, you need to double savings to reach the same target.