Role of a financial planner

The aim of the financial planner is to ensure her/his clients reach their financial goals. It is about optimising client's financial resources judiciously and not maximising them.

If a client has Rs 5 lakhs today and needs Rs 10 lakhs after 10 years for her/his daughter's marriage, s/he needs to generate 7.18 per cent returns per annum. Investing simply in Public Provident Fund (PPF) or National Saving Certificate (NSC) or few other debt instruments can generate this. There is no need to invest the corpus in equity where risks are higher.

Make a list of your financial goals
Most of us do not have a clear idea about our financial goals. Check out how many of us have written down our financial goals � those responsibilities and dreams in life for which we are saving money today.
It is not good enough to have them at the back of one's mind. It is important to have them written down. If we do not have our list, then we are wandering in the dark. If we don't know where we want to go, then how is our financial planner going to help us reach our destination.
Another shortcoming of not having "OUR" financial goals' list is that in the absence of it, we try to imitate others. I know of an individual who used to invest in only those mutual fund schemes where his boss invested. Later he found that his boss was saving money for his daughter's marriage, while this individual was not even married!
Financial planning is all about channelising 'OUR' financial resources towards 'OUR' financial goals. It is about making optimum use of our financial resources. In the race between the tortoise and hare, tortoise wins not by maximising speed but by optimising it. If we want to reach our financial goals then we � your financial planner and you - should optimise our resources and not unnecessarily attempt at maximising them.Maximisation comes with additional � and at times undue � risks.