10 Sep Why an Advisor is Most Crucial
Since Vegetables are purchased online, books are purchased online, air tickets are purchased online, clothes are purchased online, going by this online momentum, policy makers are seriously thinking ‘investments/ financial plan’ too can be purchased online.Soon they may say medicines can be purchased online and doctors are not required.
Here I intend to intervene and bring some clarity to this one sided momentum. We love living by inertia of motion, isn’t it? Why think? Why slow down? But here we shall both slow down and think.
I see a humongous difference between products like food, clothes, soaps, toothpaste, tooth brushes etc and financial instruments.
I guess nobody named them as ‘financial instruments’ just like that. Instrument like medical and engineering instrument is serious business.
My arguments are based on the following two counts:-
1) Products such as vegetables need no education, in the same vein clothes or other popular goods needs no education, buying air tickets needs no education. Hence buying them online makes sense in several of the cases if not all.
In all the examples the intermediary’s role is to reach the goods to the depths and corners of geographies.
It is, however a lot different with financial products where nobody knows anything. Our own spouses and children more often than not have little knowledge at best.
2) Also a blunder in buying vegetables, clothes, mobile phones, air tickets is tactical at best while a blunder in investing can destroy lives as I can hear the wails, way in the future, of an entire generation who think they are sitting pretty holding onto their FDs.
If at all,we need to compare ourselves with doctors. Despite a scarcity of doctors all over why does the government not promote DIY options like buying directly from Chemists etc.
The only reason, I can think of, is because health accident causes immediate destruction whereas wealth accident causes destruction with a lag of several years.
Hence in my view, financial intermediary is very different from non financial intermediary and will continue to grow rapidly in the future.