As an MFD/RIA you help your clients to achieve their goals and handhold them through volatility. Asset allocation, periodic reviews and portfolio rebalancing are some of the many responsibilities that you meticulously fulfil for your clients.
But what about your own investment portfolio? Doesn’t it also deserve that extra attention? Would an external expert like a MFD/RIA be helpful here?
Cafemutual spoke to several MFDs/RIAs to know their views on this. Here is what they have shared with us.
You can overcome your behavioural biases by hiring another MFD/RIA
Just like investors, MFDs/RIAs could also fall a victim to their emotional biases. Outsourcing your investment portfolio management can help you make impartial and rational decisions, said Ashish Modani of SLA Financial Solutions. It basically leaves no room for behavioural mistakes.
Deepak Khandelwal of RG Associates has also hired an external expert for his portfolio. This helps him to have a single point of contact instead of dealing with multiple representatives of various financial institutions.
However, some experts have a different view. They feel more confident managing their own money.
Rohit Drolia of DFSL Wealth currently self-manages his portfolio as he prefers it to be this way. It also allows him to track his investments closely.
Seconding this, Shalab Gupta Bibhab of Bibhab Capital added tracking own’s portfolio helps in understanding the market nitty-gritty better. This in turn helps in making suggestions to clients with more conviction. As a practice, Shalab usually invests in various schemes before suggesting them to his clients.
You may look at seeking help of other MFDs/RIAs to validate
Suresh Sadagopan of Ladder7 Advisories manages his portfolio through his office team. His team members review his portfolio like other client portfolios and suggest changes if any.
Viral Bhatt of Money Mantra has also not hired an external expert; he, however, usually consults his close industry friend for his finances.
To conclude, we would like to cite what Gajendra Kothari of Etica Wealth Management said, “While certain MFDs/RIAs may want to believe that they do not need to hire another expert for their portfolio, it is largely advisable to do so. Self-management holds risks similar to self-medication.”
