How this small-town dentist couple set their personal money goals

“The property my clinic is in is rented, so sooner or later I will have to move out. I had already received a pro loan. INRWhen I started practicing, it was 15.11 million yen. I needed money to set up a dental clinic and to meet my personal financial goals,” says Akshat Agarwal.

Early investment journey

Gondia is also known as ‘Rice City’ due to the abundance of rice mills in the area. “People mainly invest in land, and when they need money they use informal loans with high interest rates. I didn’t want to do that,” he says.

After consulting with relatives and friends, Agarwal ended up investing in over 10 mutual fund schemes. He also created his stock portfolio. “One of my friends introduced me to a Mutual Fund Distribution Company (MFD) and started me with a Systematic Investment Plan (SIP) in Mutual Funds. I later heard from a relative. I was told that the distributor receives a commission from the mutual fund company. My distributor did not share the details of the schemes in which I invested. I did not know that I could track these investments myself.” he says.

Meanwhile, Agarwal is approx. INRI dabbled in the stock market in 2021 and made $50,000. “I was clueless about how to set things up correctly, so I needed someone to guide me,” he says.

A random Google search led me to the website of Sahaj Money, a financial planning firm founded by Abhishek Kumar, a registered investment advisor (RIA). Until then, Mr. Agarwal had no idea about Sebi-registered RIAs or the fixed-fee financial planning model. Indeed, RIAs are authorized to give unbiased financial advice and are prohibited from earning commissions from the sale of financial products.

“I was impressed when I learned that RIAs only charge a fixed fee for their advisory services,” he says.

Private instruction was also a big plus. “I much preferred private tutors over coaching classes. And when Abhishek sent me an Excel sheet in which I was supposed to share details of all my existing investments, I also decided to take my risks. When I also asked questions about my profile, I was shocked that no one had ever asked me for these details. Others pushed products regardless of whether they fit my risk profile. Just do it,” says Agarwal.

End-to-end financial planning

RIAs follow a process before creating a financial plan. They will ask for details of your existing savings, investments, debts, expenses, and financial goals. We also analyze the customer’s risk appetite based on several questions. This will help you allocate your funds between debt and equity in the right proportions. In addition to recommending investment products, they also provide advice on loans, insurance, tax savings, etc.

Mr. Agarwal also didn’t know much about insurance.he had health insurance INR500,000 compensation by public sector insurance companies. “I didn’t know that insurance and loan advice would be part of the package,” he says. Following Kumar’s advice, Agarwal took out life insurance. INR2.5 billion.His wife took out term life insurance. INR1.5 billion.she was paying her annual premium INRThe unit-linked insurance plan cost 1.25 million yen, but I canceled the insurance and replaced it with a term plan. In addition to a family floater health insurance plan from a private insurance company, Mr. Kumar also suggested that Mr. Agarwal take out professional indemnity insurance and property (clinic, machinery, fire) insurance.

correct direction

Mr. Kumar asked Mr. Agarwal to split his personal expenses and clinic costs. “I opened a separate account for business expenses and income. This will allow me to see specifically how much I earn and spend on the clinic compared to my personal expenses. ” he says.

For example, when I needed to buy medical equipment, I leased it instead of putting my personal savings into it. “Mr Kumar suggested that there was no point in buying this machine as the technology would be outdated in a few years,” he says.

Will he follow all the advice from Kumar? Not much! “Mr. Agarwal wanted to purchase land on loan for the clinic. We initially asked him to postpone the plan and focus only on building the corpus, but the couple agreed to do so. We advised them to withdraw funds from the emergency corpus as they were already in financial debt. Financial discipline was needed to keep them away from over-leverage. Moreover, being a small city, they had to be sensitive to cash flow. Their emergency corpus could be built up again,” Kumar said.

Fees and flow

Kumar suspect INRAn initial fixed fee of 15,000 yen for client financial analysis, financial plan creation, and product recommendations. The renewal fee is INR5,000 every 6 months to review your portfolio.

Did his commission deter the Agarwals? “The fees are definitely lower than the quality of financial advice they gave me,” he says. But the process could have been better. “I had to manually fill out an Excel sheet before they accepted me, and I had to update the sheet every time I had my portfolio reviewed,” he says.

Clients carry out their own action plans. “Abhishek gives me relevant links, but I do the investments myself. This is in contrast to MFD, where I did all the paperwork myself,” he says.

However, issues with Excel sheets may be addressed through your account aggregator (AA). Aggregators act as intermediaries between financial information providers (FIPs) and financial information users (FIUs), exchanging customer data with their consent. “Once SahajMoney is up and running with his AA as his FIU, he will be able to automate processes for his clients. RIAs will be able to retrieve data directly from the FIP after obtaining client consent,” he said. says.

Meanwhile, the Agarwals have decided to maintain their links with Sahaj Money for long-term financial planning. His goal is to retire in his late 40s, and before that he wants to send his son to study abroad.