Individuals building a retirement corpus face the challenge of cobbling together a conservative, diversified, and balanced portfolio that delivers inflation-beating returns.

To build an investment portfolio that meets your criteria, the first thing you need to do is categorise your profession's risk profile and your asset personality. A job with fluctuating income is "equity-like," while steady income resembles a risk-free bond. Thus for a job with varying income, your investment should be in fixed income assets and cash. If you're a tenured civil servant with a stable growing income, your investments should have higher stocks allocation.

Chances are, you never thought about your asset personality. Well, you need to, to transform your potential human capital into real wealth.

Your total wealth at any given time has two parts, human and financial capital. Human capital is the value of your projected income from your job across all working years. Human capital turns into financial capital when you save and invest some of your earnings. As you age, your capacity to earn or your human capital wanes. Assuming you've been diligent in saving, investing, and compounding your income, you would have accumulated sizable financial wealth by the time you retire. Though important, human capital potential and risk are but a small subset of factors determining portfolio returns and investment success.

Investment in fixed deposits (FDs), employees' provident fund, national pension system, and equity linked-saving schemes are safe. They offer decent returns but may or may not beat inflation. Mutual Funds(MFs) are gaining popularity for their potential to generate inflation-beating returns. But these are less tax-efficient and cost higher due to active management requirement. Despite active management, several, if not most, failed to beat market returns in the recent past.

It seems somewhat restrictive that investors should only restrict their portfolio to mutual funds and FDs. They should have access to a broader range of products with the right asset allocation mix for changing risk-return objectives in today's world.

With the market maturing, many new passive investment options are available at low costs. They can now park some of their savings in passive options like exchange-traded funds (ETFs). These are low-cost and diversified and offer expected returns with the right asset allocation mix.

For instance, an investor could lock asset allocation limits at 50 per cent for bonds, 30 per cent for stocks, 10 per cent for gold or Real Estate Investment Trusts (REITs), and keep 10 per cent in cash. Once limits are set, they can invest in advised portfolios of ETFs, stocks or bonds. Of course, these need to match income goals and have upside opportunities to meet total return objectives.

While direct investing can generate a sizable income for your retirement, it needs a lot of effort and time if you plan to Do It Yourself (DIY). Even for savvy and seasoned investors, there are too many things to consider.

An extensive collection of advised portfolios can enable investment choices. It can control both industry and occupation-associated human capital risk as well as changing risk-return objectives.

But even if you are a diehard DIY-person, investing is not easy or advisable if you are nearing or are retired. Advised portfolios solve this problem by enabling investments managed for volatility and returns by an expert advisor.

In simple terms, if MFs and traditional fixed-income investments are city buses, advised portfolios with a focus on asset allocation mix and continuous management are chauffeured limousines.

It's OK to take the bus. You may find the ride relaxing. But sometimes the bus won't get you where you need to go. Sometimes, you need to hail a cab.

The author is CEO & Founder of WealthDesk

DISCLAIMER: Views expressed are the author's own. Outlook Money does not necessarily subscribe to them. Outlook Money shall not be responsible for any damage caused to any person/organisation directly or indirectly.