Customized Investment Solutions

Almost every financial robo advisor platform, business model and investment management company are recommendation focussed. This ‘recommendation trap’ is the primary reason why most investors end up having a miserable investing experience!

Imagine that you visit your doctor and as you walk through the door, he takes a quick look at your face and says, “You look like you need Antibiotics”! How would that make you feel about your doctor?

Why the “Recommendation Trap” is injurious to your investments!

In our country, almost all of the industry’s efforts are focused on quickly getting to the ‘recommendation’ stage and selling a product to the client. The revenue generating step takes the limelight, with very little efforts going towards actually understanding the investor’s needs and creating a custom investment plan.

Strangely, even investors seem to be wired into thinking that a fund or stock tip is the solution to wealth creation. This is indeed a weird phenomenon where the seller and the buyer come together to generate the highest possible revenue for the seller at the cost of the interest of the buyer (investor)!

A classic case in point would be DIY investing or financial robo advisors where the investor willingly chooses the so-called ‘best performing fund’ (returns measured over an abysmally low duration of the last 6 to 12 months) and starts investing with all incorrect expectations, beliefs, and no purpose except to generate the highest possible return in the shortest possible time, with zero understanding of risk/reward! Needless to say, the outcomes are usually not positive.

 Not having a personalized investment strategy sets up a speculative mindset rather than an investment mindset, and is a perfect recipe for a terrible investing experience.

What does a truly “customized” wealth creation platform look like?

• An ideal wealth creation platform addresses your money values, attitudes to risk taking, investing behaviours, biases, and financial goals before offering investment choices. 
• It also promotes joint decision making between you and your advisor, and also encourages you to participate in aligning yourself to investing best practices.
• It acts as an enabler for investment managers to create a personalized investment strategy as well as jointly discover and co-own financial goals with clients.
• It must enable you and your investment expert to engage better with each other and have frequent, meaningful conversations around your financial goals!
• The financial robo advisor platform should ensure that one cannot skip to the recommendations stage before conducting a thorough evaluation of your cash flows, personal financial ratios, investing beliefs and financial goals…In other words, making an investment recommendation no longer remains the primary objective, but understanding your requirements does!

At FinEdge, we have built our proprietary investment management platform (DiA – Dreams into Action) keeping all these guiding principles in mind.