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SIP: Do You Need An Advisor Or Should You Invest Directly?

Not sure if you should invest in mutual fund SIPs directly or invest based on advice from a financial advisor? This blog will help you understand the pros and cons of both approaches. Also, learn how the Cube Wealth app brings the best solutions whether you are a DIY investor or need a financial advisor.
August 25, 2021

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A Systematic Investment Plan (SIP) is one of the two ways of investing in mutual funds. When you invest a sum of money once it is called Lumpsum. 

When you invest small amounts of money periodically to eventually build a large corpus of money in the future - it is called a SIP. As easy as this may sound, you still need to invest in the right mutual fund SIPs to create sustainable wealth. 

To do this, you may have to choose between getting an advisor or investing on your own. There is also a third way to invest that we will talk about towards the end of this blog. 

But first, let's understand the merits of SIPs and the role of an advisor when you are investing in a mutual fund via SIPs. 

Benefits Of Investing In SIP Mutual Funds

1. Affordable

SIPs can help you get the best of mutual fund investments in an affordable manner. You can start a monthly mutual fund SIP for as low as ₹1,000 on an app like Cube Wealth

2. Passive Income

A mutual fund SIP generates passive income for you which means the money you invest earns interest. Even the interest your SIPs generate will earn interest! This is known as the power of compounding*. 

A SIP works for you while you sleep which means it generates passive income. As Warren Buffet said 'Make money while you sleep’. That's exactly what a SIP does for you. 

Read this blog to know about the 10 best passive income ideas for 2021

3. Lucrative Returns

Mutual fund SIPs have the potential to generate lucrative returns over the long term. That is, after all, the goal of any investment at the end of the day. 

Moreover, mutual funds are divided into various categories each of which has its own strengths and potential to generate potentially high returns. 

Explore the best mutual funds on the Cube Wealth app today

Do You Need An Advisor For SIP Mutual Funds?

Investing a small sum of money monthly or quarterly in a diverse set of mutual fund SIPs can help you maximize your profits and minimize the risks. 

However, it is crucial to invest in the right mutual fund SIP. 'Right’ here means it is: 

  • Suitable for your goals
  • In-line with your risk profile
  • Capable of generating reasonable returns

One might assume that it is easy to simply identify goals and choose a mutual fund SIP that fits it. But that may not always be the case. There's always the risk of:

  • Over diversifying: having too many (bad) mutual fund SIPs
  • Under diversifying: less than optimal number of mutual fund SIPs 
  • Not buying the right mutual fund at the right time
  • Holding on to underperforming mutual funds

You may be able to avoid these risks if: 

  1. You have a trusted mutual fund advisor by your side
  2. You have time to research every mutual fund (1000+) every day

Option #2 may not be feasible for working professionals because they work from 9 to 5 every day, 5 or 6 days a week. But even if you do have time, an app like Cube gives you access to recommendations from a trusted advisor like Wealth First to help you invest better. 

Wealth First has more than 2 decades of experience in the market and a track record of beating the market by ~50% since 2010. There are two benefits to this: 

  1. They'll help you choose mutual funds based on your goals
  2. They'll give you selling advice in case a mutual fund underperforms

Get the best mutual fund advice on the Cube Wealth app today

Difference Between Investing Directly Vs With An Advisor

Investing Directly

Investing With Advice

Exposure to multiple scheme options

Curated list of mutual funds

Low fees

Advisory fees

Master of your own destiny

Align with advisor's strategy

Extensive time & research

Advisor does the research

Risk of not being objective

Objective advice based on data

Holding on to bad mutual funds

Clear selling advice

Tough learning curve

Sit back and relax

At the end of the day, you must choose a method that suits your investment goals and needs. There's no reason to shun one method for another but a good investor uses all tools available to them. 

An app like Cube Wealth gives you access to a combination of investment advisory and DIY. This approach may solve the dilemma and in turn, give you the best investment experience.

How To Invest In SIP Mutual Funds?

The Cube Wealth app simplifies the SIP investment process by giving you access to 2 important features:

1. QuickSIP

QuickSIP helps you invest in SIPs that work for you. To start with, you need to take a detailed risk analysis quiz that can help determine your risk profile and investment goals. 

After that, you get access to a curated list of mutual funds from Wealth First, Cube's mutual fund advisory partner, across categories like international funds, equity funds, debt funds, liquid funds, and more.

You have full control throughout the journey and once you've invested, you can sit back, relax, and think long term. Wealth First will give you clear instructions on when to sell if the need arises. 

Try the QuickSIP option on the solid and reliable Cube Wealth app today. 

2. SuperSIP

It may so happen that you've started a SIP but now you want to change the SIP date or snooze a payment. Cube has an option for that as well. 

SuperSIP is a feature (only available on Cube Wealth) that allows you to snooze a  mutual fund SIP payment in case you don't have the required amount. 

You can use SuperSIP to increase or decrease your SIP amount or change the SIP date. SuperSIP ensures that investing in mutual funds is affordable and flexible. 

Check out the awesome SuperSIP feature on the Cube Wealth app today


*What Is The Power Of Compounding?

Simply put, compounding means your interest earns interest on top of the principal amount.

Watch this video to know more about curated mutual funds on Cube Wealth

Priya Bansal
Curious about personal finance and all things money. Can either find me reading a book or dancing to a tune.

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