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4 Biggest Disadvantages Of Not Having A Financial Advisor

Kalpesh Ashar
Kalpesh Ashar CFP,SEBI RIA Member of Advisory Committee 1 Finance, Mumbai Chapter

CFP,SEBI RIA, Member of Advisory Committee, Mumbai Chapter

19 March 2024 4 min read
4 Biggest Disadvantages Of Not Having A Financial Advisor

It is heartening to know that lately more and more people are becoming genuinely concerned about their financial future and are seeking the path to attaining financial independence. That’s great news, but it’s imperative that the right path needs to be taken under the guidance of a qualified financial advisor.

Due to the advent and recent surge of social media, many people feel that this ‘free’ access available to them is the right way and can be implemented in the DIY mode …

This thought is miles away from reality when looking at handling personal financial matters can get extremely complicated, especially as one approaches important life decisions involving their finances.

Why is it that individuals yet feel that managing money and wealth creation is a very personal decision and cannot be outsourced professionally, whereas matters relating to health and education need external intervention?  By not seeking the services of an ethical and knowledgeable financial advisor, there are various disadvantages an individual could encounter in his financial life journey:

Here’s a list of some disadvantages of NOT hiring a professional financial advisor

Committing  ‘financial mistakes’

Financial mistakes are costly and destructive to personal financial health. Unfortunately without the right guidance from a financial advisor, knowledge and experience, one can easily fall into these pitfalls. Common financial mistakes can include inadequate diversification of portfolio, investing without having specified financial goals, not taking inflation into consideration, ignoring taxation and many more… Individuals tend to look at the short-term benefits and the low-hanging fruits rather than a more robust and fundamental method to achieving their goals. They fail to understand that every financial plan is subjective to each individual.

Falling prey to the wrong product

Today the financial world is flooded with various complex products. An individual investor has a sea of options when it comes to selecting an investment product. Without adequate knowledge and the absence of a financial advisor, it is very easy for individual investors to fall prey to wrong and unregulated products. Following random stock market tips, and listening to ‘(mis)influencers’ on social media platforms can lead to huge financial losses in an individual’s portfolio. It is very difficult for an investor to see their hard-earned money go down the drain.

However, with the guidance of a Qualified financial advisor you can avoid ending up with the wrong product. The Qualified Financial advisor will give you the right advice on investment products that suit your financial profile. 

Increasing Financial Stress :

Financial planning can often be stressful when it comes to investing, repaying liabilities, goal planning and overcoming tough economic situations. The requirement of a solid financial plan under the guidance of a financial advisor is the need of the hour at such times. Financial planning is a continuous process and not a one-time thing. One needs to review the same periodically and make necessary changes as and when situations occur. An individual might start with this process but feel lost or overwhelmed in the middle of their journey destroying their peace of mind.

A qualified financial planner takes into consideration all the financial and non-financial aspects of your life and goals and drafts out a road map wherein he can help the individual wade through present financial obstacles and simultaneously plan for their future as well. This ensures peace of mind and no financial stress.Volatile emotional reactions :

It is very common for individual investors to have an emotional reaction to various situations when it comes to money-related matters. An investor might be tempted to sell the stock on the slightest ‘correction’ in the market, or ‘buy a wrong insurance product just because their relative has taken up an agency and wants to make a first sale. While these decisions might seem logical or emotional at that point in time, there is a chance that a financial advisor might have a different perspective and opinion. Personal financial advisors make every decision after looking into the minute details and after carrying out extensive research.

An evolved financial advisor controls the ‘emotions’ of the investor as he is aware of the temperament of the individual and his life goals as well.

Investing aimlessly without financial goals :

Without goal-based investment planning, individual clients might make decisions that are not in line with their objectives. An individual investor might only consider the returns of a particular product and end up investing in products which are not in sync with their financial goals. Identifying one’s goals and time horizon is the first step for investment planning. A financial advisor makes a comprehensive goal-based investment plan like a road map after assessing their clients overall profile in order to help them achieve their goals.

To sum it up, a financial advisor is like a RADAR that imparts the right direction to an investor for him to always be on TARGET to achieve a financially satisfying life!

Please note,

The views in the article /blog are personal and that of the author. The idea is to create awareness and not intended to provide any product recommendations.


Discover your MoneySign®

Identify the personality traits and behavioural patterns that shape your financial choices.