The best financial advice is often to do nothing, says Value Research CEO Dhirendra Kumar

Speaking on the sidelines of the fourth edition of the Global Financial Planners Summit Team 2026 in Mumbai, Kumar highlighted the need to make financial education an integral part of household conversations, particularly as investors gain easier access to financial products and digital investment platforms.

He emphasised that poor financial decisions can have consequences that extend well beyond the immediate loss, potentially shaping an individual's financial behaviour for years.

“A bad financial purchase is not just about the money lost today. It can set the stage for a lifetime of poor financial behaviour,” Kumar said, underlining the importance of understanding financial products before committing money to them.

Financial education must begin at home

Kumar stressed that financial literacy needs to go beyond an understanding of investment products and market movements. Households must develop the ability to evaluate financial decisions, understand their long-term implications and distinguish between necessary spending and avoidable expenses.

He said conversations around money and financial discipline should begin early, with families playing an important role in shaping attitudes towards saving, spending, insurance and investing.

According to Kumar, the lessons individuals learn while growing up can influence how they approach money throughout their lives. An environment in which families discuss financial choices and explain the reasoning behind them can help individuals develop a more considered approach to spending and investing.

He also emphasised the importance of returning to the first principles of investing and understanding how financial products work, rather than relying entirely on recommendations or being swayed by marketing.

The need for such education becomes particularly important when individuals make decisions about products such as insurance and investments, where a poorly understood purchase can have long-lasting financial consequences.

Financial advisers offer value beyond product selection

Kumar also highlighted the role of financial advisers in helping investors avoid behavioural mistakes and remain committed to their long-term plans.

He noted that one of the most valuable contributions an adviser can make is often to prevent investors from taking unnecessary action.

“The best advice most investors will get is to do nothing,” he said, explaining that staying invested and avoiding impulsive decisions can be more beneficial than frequently changing portfolios in response to market movements.

Kumar observed that investors may sometimes equate activity with progress, expecting advisers to recommend frequent transactions or portfolio changes. However, a sound financial strategy may require an investor to remain patient and avoid making changes when there is no compelling reason to do so.

He compared this to seeking medical advice: a professional's recommendation to make no immediate intervention does not mean that the professional has added no value.

Similarly, an adviser who helps an investor avoid an unnecessary transaction may be protecting the investor's long-term interests.

This behavioural guidance is particularly relevant during periods of market volatility, when investors may be tempted to react to short-term developments instead of following a carefully considered investment plan.

Direct mutual fund plans and the value of advice

Discussing the evolution of direct and regular mutual fund plans, Kumar pointed to the growing accessibility of direct investing, particularly following the expansion of digital investment platforms.

He noted that the period around the Covid-19 pandemic accelerated the adoption of digital onboarding and simplified the process of investing. The ability to complete know-your-customer (KYC) formalities and invest through mobile applications made direct plans more accessible to a wider group of investors.

While direct plans offer investors a way to invest without paying distributor commissions embedded in regular plans, Kumar's comments highlighted that the distinction between the two extends beyond costs.

Financial advice can play an important role in helping investors develop an appropriate asset allocation, remain disciplined through market cycles and avoid decisions driven by short-term sentiment.

The value of an adviser, therefore, should not be assessed only by the number of transactions executed or the products recommended. It should also be measured by the extent to which the advice helps investors remain aligned with their financial goals.

(Note: The journalist was invited to the summit)