Escape Revolution

Rebalancing, tax and estate planning can keep overall financials in order


I invest 20,000 in multi-cap funds and they are giving me decent returns. I have a unit-linked insurance plan (Ulip) of50,000 for 10 years, while 10,000 goes towards my Public Provident Fund (PPF) account. I also put 1 lakh in equity-linked saving schemes (ELSS) every year. Are my finances on track? Do I need to hire a financial adviser?

— Vaisahakh

Your portfolio is well-balanced. Multi-cap strategy funds are your core equity portfolio. Subject to your risk profile, you may even consider adding a mid-cap along with a large-cap fund. The idea is to diversify within the equity asset class. Ulipsshould also be considered as an investment and not an insurance plan. So do review its performance. Also, you need to consider life insurance for yourself if you have any debts and/or any responsibility to fulfil such as if you are married then you need to protect your family by covering yourself adequately. Likewise, ensure you have a health insurance. This is important and is recommended separately even if your office provides a cover. Instead of making a one-time investment in ELSS, you can start a systematic investment plan (SIP).

Though the role of a financial adviser primarily is managing your financial assets, it goes much beyond it. While managing your financial well-being is critical as he brings in all the expertise like enabling your aspirations to match your income within the constraints and how to overcome the shortfalls, if any, in the best possible manner, it is also the emotional check which an independent adviser brings to the table that makes you consider the investment without any biases. Along with it, portfolio rebalancing, tax planning and estate planning ensures that your overall financials are kept in order.

So it really depends on you whether you need a financial adviser or you are able to manage it well yourself.