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Finding obstacles in choosing investment plan in digital world

Published Apr 18, 2018, 11:04 am IST
Updated Apr 18, 2018, 11:04 am IST
SEBI come up with proposals to segregate advisors and broker/distributor to help investors make an unbiased investment choice.
Insufficiency of the knowledge and resources related to the investment instruments ultimately affects the economic growth in the long-term.
 Insufficiency of the knowledge and resources related to the investment instruments ultimately affects the economic growth in the long-term.

In this internet space full of e-shops, even the financial industry is not behind in selling various investment instruments online. The increasing online competition has stimulated the launch of various investment options to engage both the tech-savvy and non-tech savvy investors. To increase their reach to both the groups, the financial service providers are working day in and day out on both online and offline grounds.

Investors invest with a motive to earn maximum returns. This generates the need of finding an ideal investment plan that can lead to wealth creation. The insufficiency of the knowledge and resources related to the investment instruments ultimately affects the economic growth in the long-term. For the same purpose, investors have to be aware of the features as well as the pros and cons of the various investment plans available in the market to park in their money.


Ideal investment plans are not the ones which are promoted by the financial websites with jaw-dropping returns, but the ones that can actually suit your investment requirements. 

Earlier, people used to save their money in a bank deposit or invest via a post office scheme, as there were limited number of investment products or plans. Due to lack of awareness, investors then were dependent on the traditional financial advisory. With the newest innovations, financial world is now full of alternatives such as equity, mutual funds, real estate, gold, insurance, etc., which can be traded online as per investors’ convenience. There are several skillfully designed investment portals which provide user-friendly and robust interfaces to make choices, perform transactions, monitor growth, and learn about the basic aspects of investment. They might have made investors ‘self-directed’, but have also created a confusion among them. Because of improper knowledge of the online automated platforms and unawareness of the benefits of the new financial instruments available in the investment ground, there is still a long way to go.

Let us understand how automation or artificial intelligence works for making suggestions.

An automated investment advisor uses artificial intelligence to construct an approximately ideal portfolio strictly based on generalized risk profile, investment horizon, goals, and other parameters. Hence, there is a possibility of generating an investment plan that might not suit every individual’s needs. To overcome these pitfalls, most of the online investment portals are backed by the experts and analysts who should be consulted to have an exclusively customized portfolio.

Apart from struggling with the working of robo-advisory, investors also face challenges in verifying the authenticity of the products, selecting a trustworthy platform, and finding guidance and support in starting the process of investment.

These problems can be overcome by -

Hiring an Experienced Financial Consultant who can help you throughout the investment process from finding the best suitable plan to monitoring the growth. On the same lines, SEBI has come up with the proposals to segregate advisors and broker/distributor to help the investors make an unbiased investment choice.

Looking for a Reliable/Authorized Investment Portal which has SEBI registered advisors or IRDA approved brokers. This reduces the chance of monetary fraud. Investors must be aware of the broking charges as well as terms and conditions of services provided by the portal they are relying on. One can approach the Redressal Sections in order to raise any complaint.

Gaining Basic Knowledge Related to Investment as all the authorized investment portals provide a learning base for their investors. Gathering enough knowledge of the risks, procedures, and benefits associated with the available investment options helps in taking a wise decision before investing.

The digitalization of your financial service provider has not created an obstacle between you and investment options. It has just increased the necessity of gaining knowledge of the world of choices that it offers.

- By Miss Nandita Mathur, Project Manager, MySIPonline