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The Role of a Financial Advisor in Retirement Planning

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

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

23 April 2024 3 min read
The Role of a Financial Advisor in Retirement Planning

By the textbook definition, ‘retirement’ is a stage in life when a person decides to quit their active professional or work life. Conventionally, this step is a natural progression in life due to health-related concerns or age. Thereafter, the individual and his dependents would have to live off their savings garnered and invested through their earning years. Hence, having a retirement plan in place well in advance is very important. However, executing and planning the entire retirement planning process by yourself can be very overwhelming since one needs to consider a lot of financial and non-financial aspects while doing so.

Here’s where a Qualified financial advisor comes into the picture…

Makes sure the retirement planning process starts ‘on time’

Many times, while living our present day-to-day life, a lot of people miss out on planning for a retirement corpus. A financial advisor will make sure that this process is started as early as possible. An individual will not be able to just think one day that they wish to retire in the near future. They need thorough planning and more importantly, proper execution at least 5-10 years before they are going to actually retire under the proper guidance of a financial advisor.

Customised retirement plan for every client

Before beginning the retirement planning process, a financial advisor will first analyse your current monthly cash flow and enquire about your desired lifestyle post-retirement. All the other factors like life expectancy, inflation, growth, etc. will be taken into consideration while calculating the retirement corpus. He will not only consider the financial aspects but also go beyond and touch upon topics of the non-financial aspects as well like the possibility of pursuing or fulfilling their ‘hidden’ desires or passions like travelling or opening up a café, etc that they were not able to do before due to their professional life. They will craft a customised plan taking into consideration all the aspects, and ensure the client’s safety, security of their hard-earned money and most importantly peace of mind.

Risk Management through adequate and ‘RIGHT Insurance’

A financial advisor will make sure that their client’s insurance portfolio is on track, i.e., having adequate coverage for life insurance, health insurance, home insurance and mainly make sure they do not have insurance cum investment policies in their portfolio. They should be adequately protected against all possible losses so that the risk of unexpected expenses is mitigated.

Creating the ‘APT’ Investment portfolio

While planning for retirement, a financial advisor will make sure they diversify their client’s portfolios in such a way that they have products which are primarily SAFE, generate a regular source of income, and mitigate the risk of inflation at the same time. Inflation and growth are the prime elements that one needs to be aware of while executing this process. The investment products tagged towards retirement corpus must provide the client security i.e., less risk, easy liquidity and also moderate growth.

‘Eliminate’  Liabilities

A financial advisor will ensure that the client does not have any liabilities at the time of their retirement. They will advise accordingly to pay off their debt probably before an individual commences his retirement journey as it is very difficult to pay the liabilities without a steady source of income.

Smooth transfer of Assets to your partner or NEXT GEN

A financial advisor would advise that before retirement all your nominations in your investment portfolios, banks, etc. are in place and also guide you throughout the estate planning process, which involves creating a plan for the transfer of the client’s asset to the beneficiaries in a seamless manner.

Thus this role of a Qualified Financial Advisor is far beyond only numbers for a retired individual as it touches the life of a retired person in many other ways, thus ensuring that your SUNSET years are spent in SUNSHINE !

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.


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