Why Investors choose to Partner with Advisers?

You will be investing for longer than you will be working. It very likely that after a point in time your investments will earn as much or more money in a year than your regular income. Once you have a sizable corpus, say 10cr when you are 60 it can earn you about 30 cr over 25 years at 12% returns without reinvesting any surplus you don’t spend.

Let’s put this number in perspective.

Suppose you are 35 years old and earning 25 lacs annually, and you get a 10% increase every year for the next 25 years till you are 60 and you retire. What is the total income over 25 years?

It’s about 25 cr. With this salary and increments you should be able to have 10 cr corpus comfortably after incurring some large expenses along the way. The point is that this corpus can earn you more in the 25 years post-retirement than you earned in 25 years working. Yes, the value of money is not the same, but nor is the effort you put in earning it.

What is critical here is that you need to invest reasonably successfully for about 50 years. Can you be ignorant about investing and achieve this? Unlikely. More importantly, when something that you need to do for so long and has such a huge impact on your life, shouldn’t you be doing everything to ensure you do it successfully, come what may?

How do most people manage their investing?

They manage it in one of these two ways

Do-it-yourself, DIY way of investing. This approach puts serious constraints of time, knowledge, and experience and hence on the research edge to earn inflation-beating returns consistently. A bigger challenge is maintaining productive investing behaviours through the ups and down of the market and the economy, which is certain to happen in the time you are invested.
Leave-it-to-experts, also known as Do-it-for-me, DIFM way of investing. Doing a PMS is one examples of this. The challenges here are giving up control over how your money is invested, handling the discomfort when performance is not as you expected as you don’t know the real reasons for it. All this results in a poor behavioral edge. Investors are neither able to invest a substantial portion of their networth through this route, nor stay invested for long enough to enjoy the benefits of compounding.

Instead, when you choose the approach of partnering-with-an-expert way of investing, you overcome the limitations of both the DIY and DIFM way of investing.The partnership ensures you have access to better research, are involved in the decision making, you discuss and agree on the rationale behind these decisions, and you are guided by an expert to stay the course when the market resembles a roller-coaster ride.

When you choose to partner-with-experts you ensure you have the research and the behavioral edges, and you have the confidence to put your networth to work for you. In short, you ensure your money compounds consistently and creates wealth. And you become a savvy and confident investor. This further enhances the results you achieve.

How do we ensure a successful Investor-Adviser partnership?

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