Seven years ago, Ram Hasyagar, now aged 61, found his personal finances taking a backseat, even as he was in the driver’s seat as the managing director at Armstrong World Industries Pvt. Ltd. Says Hasyagar: “Seven years back, I had a foreign bank’s wealth management service handle my finances. But I felt that they weren’t giving the required attention to my portfolio and were more interested in selling products. That’s when I decided to approach a financial planner.”
He wanted someone who would take a personal interest in his finances, provide sound financial advice and take on all the work around the management of money off his busy head.
OVER-DIVERSIFIED. Hasyagar suffered from a unique problem for an Indian retail investor, he was overexposed to equity with almost 50% of his portfolio in stocks, directly and indirectly. The other problem was excessive diversification. Recalls Hasyagar, “When the planner reviewed my portfolio, he said that I had too much diversification. I had investments in 12-15 mutual funds.”
SOLUTION 1.The first thing the planner, Lovaii Navlakhi, did was to reduce the number of funds to six or seven. While there is no limit to the number of mutual funds that one can invest in, the benefits of diversification reduce after 10 schemes. Though it is always tough to sell, Hasyagar was happy to do so: “I knew I was over diversified. Keeping track of so many funds was becoming a problem.”
SOLUTION 2. “For someone who is retiring a year later, having an equity-heavy portfolio is too risky. As per my age, my asset allocation was changed from an equity-heavy to a debt-heavy portfolio,” says Hasyagar.
Then there was retirement planning that was looked into, something, that was overlooked by his banks’ wealth advisory. “I have travelled the whole world and once I retire, I intend to travel India extensively,” he says, thinking ahead of his retirement years. With investments, savings and retirement planning in place, the next step was to look at estate planning.
Investing and financial planning needs a lot of time, attention to detail, research and paper work. For someone with a busy schedule, it’s too much trouble. It was difficult for me to track my finances as I didn’t have time. Having a financial planner solved this problem.