Paid professional advice is expensive—until you skip it

An investor's decade-long journey shows the impact of trusted financial planning advisory

- Aprajita Sharma

The number of Securities and Exchange Board of India-registered investment advisors (RIAs) is shrinking rapidly. Their number is down to just 970 from 1,300 a few years ago, according to Sebi data. Of these only 400 are active, industry sources say. The main reasons are the huge compliance burden for RIAs and a lack of willingness among Indians to pay for professional financial advice. Sebi has been taking steps to ease the qualifying criteria and encourage more people to apply for an RIA licence, but for now they are a dying breed.

That's unfortunate, because generating returns is only part of an RIA's job. The other, equally if not more important, is keeping clients on track to meet goals by instilling financial discipline.

The story of Vishal Sharma, 51, an IT professional from Delhi, and his RIA of over 10 years illustrates this perfectly.

Lost at sea In 2014, 72% of Sharma's portfolio was in real estate, along with six endowment insurance policies that offered poor returns. He knew little about equity or mutual funds. A friend introduced him to Nitin Sawant of NS Wealth after Sharma became a father, prompting him to take financial planning seriously. More than a decade later, he has met several goals and is on track for retirement. "I credit all my financial discipline to him," he said.