We have discussed in previous articles how to identify a good MFD (Mutual Fund Distributor) or RIA (Investment Advisor registered with SEBI) & why investment advisor is important?. After this we will further strengthen the identity of good MFD or RIA in this article. We have seen in the previous sections that transparency, mathematical skills, analytical skills are qualities that your financial planner needs to have.
Importance of Financial Planners
Availability of ‘MFD’ or ‘RIA’ when needed is an important feature. MFDs or RIAs help customers strike a balance between risk and return. Financial planners should be available for discussion among their investors whenever possible without discriminating on their educational qualifications, intelligence, social standing, financial status. Another important thing is that the interests of the person with whom you have a business relationship, who is entrusted with the responsibility of protecting your financial heritage and his future, should be given top priority.
It will not be possible for MFD or RIA to take all the phone calls at the same time. But when he is free, he should answer your phone. When you assign a financial decision to a consultant, the decision maker should be the one who decides what is in your best interest. An RIA should have the qualities of business ethics, adherence to norms (not display), to be available to contact the financial planner and to return the phone call immediately. According to a survey, 39 per cent of investors prefer MFDs or RIAs, which do not prioritize their own business profits for the benefit of investors. This was an important determinant in the selection of MFD or RIA( SEBI Registered).
Credibility of Financial Planners
These are called fiduciary standards in the financial services sector. The foundation of any financial industry depends on this credibility. The ethic is that the consultant should carefully explain the investment risks before purchasing a product. Mutual fund units are usually bought after seeing the returns of investors.
For example, if the investor is a senior citizen and insists on a small cap fund, the risks of a smallcap investment should be clearly explained by the advisor. Consumers should never be pressured into making business decisions about investing that have serious consequences if the decision is wrong. The final decision should be left to the customer after thorough analysis.
There are many distributors with single pillar tents in India. A consultant needs experts to meet the specific needs of their clients. A pillar tent is a single consultant providing a variety of services or a consultant (retired planner, inheritance manager, insurance expert, mutual fund researcher, etc.) who can help you find the answers you need to meet your planned financial objectives. . Your fundraiser is professional and amateur should also be considered. Retired from bank, asset companies (AMCs) appear to be fundraisers as a side business.
Professionalism of Financial Planners
I would always prefer a professional consultant over such amateur distributors. A good professional financial advisor will always be with you, meeting important events in your life and regularly throughout the year. This relationship grows stronger year after year. Most of the time, people meet the consultant, develop a plan and then just get the statement in e-mail. Investing is not just about statements and returns. A relationship with a financial advisor, like your family’s medical advisor, should be beyond investment.
Paying for advice should get used to the changing world. I would like to tell investors that in a country like USA where financial literacy rate is higher than in India, investors also do financial planning with the help of advisors. Finding a good financial advisor is enough to keep you focused on your financial goals.
The return of a good consultant is about double the return of a 15 to 20-year-old without a consultant. If the US (which market has matured) market has specified the need for a guide, then the Indian (which market is still a long way to mature) market market consultant is definitely needed. Don’t manage your own investment unless you have a good knowledge of financial planning.
Note: Investing is not just about statements and returns. The relationship with a financial advisor, like your family’s medical advisor, should be beyond investment. Mutual fund investments are also subject to market risks. Please study the details of the fund before investing.
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