In an interview with Shweta Dhoka of Myiris.com, Jaya Nagarmat, Managing Director (MD), Investor Shoppe Consultancy, says, "We believe that any market moves on positive sentiments generated by regulatory & policy support. With the introduction of investor friendly policies various financial market segments will see many more highs in the coming years. To bring stability in financial markets, the retail participation is must."
Excerpt from an interview Myiris had with Jaya Nagarmat:
What do you envision for your financial planning services firm future? Growth? Expansion?
Investor Shoppe is one of the oldest and trusted IFA / Wealth Planners. In last 13 years, we have catered to 4000+ investors on various fronts including 1000+ active clients. Definitely we are looking out for expansion but in a strategic way. The growth is not just about adding new clients but also retaining old clients. Most of our clients have been working with us since the inception of Investor Shoppe.
As of now, we are introducing a new business model altogether - Hence, currently it is about building the model, investing capital, creating an infrastructure, licensing, designing new processes, etc. One of the key growth driver for us will be our initiatives towards educating clients and creating awareness through various activities. We are very optimistic about the same. In-fact we have started the activity and are organizing various workshops & events
For us, every client is important therefore we have not bifurcated our TG into segments. Our major client base includes retail clients followed by HNIs, NRIs and others.
What is your take on current market situation? What are the key factors that will drive the stock markets in 2013? What is your advice to retail investors now?
Indian stock markets witnessed over 20% growth last year, one of the best performing indices in the asia-pacific region. In-spite of growth, the participation was very minimal from the retails investors. This is one key issue which needs to be addressed efficiently. We believe that any market moves on positive sentiments generated by regulatory & policy support. With the introduction of investor friendly policies various financial market segments will see many more highs in the coming years. To bring stability in financial markets, the retail participation is must.
We are very aggressive in catering to retail households and hence, more than talking about the stock markets we try to educate our investors on planning for their short term and long term goals and investing systematically, month on month to achieve these goals. We always advice clients to have a broader portfolio comprising of multiple instruments so that they have money when they need it most.
How do I know if the cost of financial planning is worth it for me? What information should one bring along to get maximum value for time spent with the planner?
Since paying for FINANCIAL ADVISE is still a "yet to catch up trend", each individual has to pay for it to be able to understand the value of the cost. A financial advisor is more like a friend and is always there to help you when you need answers to ANY / ALL of your money related questions but so is Google. But chances are that you will get an answer exactly suiting your requirement / objective from your advisor who understands your needs and is a lifetime handholding friend.
The investor should have handy all his existing assets / liabilities, income, tax status, insurance - life/ health/home etc and a good few hours of time for the first initial meeting. This help the planners to get the right info to derive the plan as per the requirement.
How often would you suggest reviewing and rebalancing a portfolio?
Reviewing or rebalancing a plan purely depends on the requirement and necessity of the client. However, we advice the investor to relook on the investments at-least once a year- preferably in the beginning of the financial year and/or if there is any situational change in the family like addition in the family, sudden demise in the family, increments in job, losing a job, spouse quitting his/her job, starting a business etc etc.
How important is it for an individual to actively manage their personal finances?
Managing the personal finances is one of the most important activities every individual should do. It is not just about taking care of day to day expenses but taking a long term view considering all the possible options where money is involved. All of us work very hard to earn our money and hence it is very crucial to get our money work hard for us. So although maximising return on portfolio is very important, but more important is to use all tax saving options, use all the individual files in the family, invest in tax free instruments as much as possible etc. One should get the money when you require it the most.
What do you feel is the biggest mistake people make regarding money management, and how can they be corrected?
Well, I feel that the biggest mistake people make regarding money is taking ad-hoc and impulse decisions. There may not be a thought process behind making or breaking an investment. Another trend catching up very fast these days is the debt trap. Without really understanding the very concept, one gets into the credit card trap paying interest as high as 42% p.a or personal loans to buy things which they can do without. And then there is no disposable income left to put aside for real needs. One should go for calculated risk for better returns.