As we already know that financial planning provides a road map to achieve all the financial goals and unforeseen needs that may arise in one’s lifetime. It makes our financial journey less stressful, more fun, and more successful. A plenty of people have started realizing this phenomena and is undertaking the financial planning process. However, simply realizing and initiating the exercise will not ensure to the fulfillment of your financial goals. Not everyone, who shows very good enthusiasm by asking relevant deeper questions during the process of financial planning process, will be able to streamline their finances. They would seem appetite in need of a financial plan and planner’s advice. They would be very clear in their goals and would have done some investments here and there. They would then follow it up with submission of adequate data and the plan is presented. But they do not recognize that without execution and monitoring of plan would not create magic in your life, it would remain just a plan on the paper and nothing else. Today, we will discuss that reasons which might fail your financial plan for achieving your financial goals.

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Inadequate and Incomplete Data

While making the financial plan, getting complete and correct information about one’s finance is a core foundation in which your financial planner works on analyzing your financial current situation and formulate recommendations. If you do not give complete and correct information to your planner, it might be led to a flawed financial plan which might affect your financial goals. Since, your planner delivers you a long list of documentation has to be gathered for every account, which may be an easy task for savvy investors who are already highly organized their finances, but may be an arduous process for the lay investors who probably doesn’t spend a great deal of time keeping their financial life in order, hence they may even begin to have feelings of inadequacy.

For instance, if you get on estimate and make provision your current expenses lower than reality, it may cause in overestimation in your monthly surplus. And, to meet these unplanned expenses, you might be driven to liquidate some assets which otherwise would have been reserved for achieving other goals. Similarity, if you do not disclose any ongoing investment, which might not be useful for attaining your financial goals.

Not executing the Plan

Once the plan is presented and draft is given, many people would display incomprehensible inaction in executing plan. Perhaps, they understand that their goals are unrealistic, but still they expect the planner would do some magic and set all their goals into a 30-40 page document called a financial plan. But on the subject of action, their phone calls would be unanswered and mails would remain one way. They do not recognize themselves that their financial plan which is on the paper would remain just a blueprint without any action which might create huge gap between time frame and required corpus for their financial goals. Hence, they are gripped with the fear of acting too late in their life and may result in procrastination.

Not adapting the prescribed Advice

There are other types of people too, who intend to take action on their plan but to do something entirely different, they do not follow their planner’s advice and recommendations. They are keeping in search for perfect products for getting superlative returns at the highest level of risk which may not be suitable for their sensitivity of financial goals and risk appetite. Some people are also extremely rigid about investing in only certain kind of asset classes and products. Some might be extremely risk-averse and want to invest only in products that are not equity related, while some might only want to include equities in their portfolio.

While assessing your insurance needs, sometimes, planners might recommend you to surrender an existing policy and instead buy some other policy which they might feel would suit your requirements better. However, due to similar reasons or to avoid offending some friend or relative from whom the policy has been taken, some people decide against surrendering that policy. It is imperative for you to understand; simply planning will not help you fulfill your wishes in life, irrespective of the quality of the financial plan. You need to execute and take appropriate actions at the right time for the betterment of your and your family’s future.

Not monitoring and skipping reviews

Since financial planning is an ongoing process that articulates goals, gathering data, measuring progress and changing course when necessary. Some people tend to think once a plan is constructed all they have to do is follow it and their goals will be achieved. However, you must understand that a minor change in your goals and priorities, investments allocation, switching job, financial risks, tax amendments etc. can severely impact your ability to meet your financial planning and life goals. To ensure that minor changes in your financial life need to be incorporated into your financial plan as and when they occur. It is always recommended to review and revise your plan at least annually. In the best case scenario a financial plan would be revised upon realizing that some facts or assumptions in your financial plan have changed. Financial plans should be considered a “living document”, which means that it needs to be continually edited and updated. This ensures that the recommendations that you have implemented are still relevant and needed to help you reach your goals.

Every savvy investor should recognize that when things are going as planned, inaction is the best action and follow the planner’s advice to live a stress-free financial life, it is necessary to be determined towards the financial planning process.

A good financial plan is a road map that shows us exactly how the choices we make today will affect our future.-         Alexa Von Tobel

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Suresh Kumar Narula

SEBI Investment Advisor, Founder & Principal Financial Planner at Prudent Financial Planners
Suresh K Narula is founder and Principal Financial Planner at Prudent Financial Planners. He has earned the professional CERITIFIED FINANCIAL PLANNER and got registered with SEBI as Investment Advisor. He writes on personal and financial planning articles and got published in Dainik Bhaskar, Business Bhaskar and The Financial Planner's Guild, India. He is also a member of Financial Planner's Guild India ( An association of practicing SEBI registered Investment advisers) to create awareness about Financial Planning in general public, promote professional excellence and ensure high quality practice standards. Suresh received his an M.com from Himachal Pardesh University and an MFC from Punjab University, Chandigarh. He can be reached at info@prudentfp.in
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