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How to lead your portfolio - Dealing with Advisors


POSTED ON 3 Jun 2014
4 Min read

As a novelist I tell stories and people give me money then financial planners tell me stories and I give them my money.

When you trust someone with your money  you need to be sure who he or she  is. With the growth in individuals wealth and the financial services industry  there are various categories of institutes and individuals in the Wealth Management space today. Advisors who deal in single products and multiple products. They would include

1) Bank Relationship Managers

- ICICI, Citi Bank, HSBC, HDFC etc.

2) Non Banking Financial Companies

 - RR Finance, Bajaj Capital, Shriram Transport, Mahindra Finance, Religare.

3) Individual Advisors.

4) Stock  Brokers

-SMC, ICICI Securities, HDFC Securities.

5) Private Wealth Management Firms

- Anand Rathi, Motilal Oswal, Reliance Capital.

6) Chartered Accountants.

Womantra guides you about choosing the financial advisor:

Womantra 1:  Advisor Basics

It is critical that you choose the right advisor to guide you with your investments. You need to find an advisor with the below mentioned basics

1) Is authorized and registered  ( Normally your bank relationship manager is a good option as they represent a reputed organization and deal with variety of products)

2) The advisor needs to have  experience of situations like yours and clients of your profile ( e.g. a Chartered Accountant is not always the best advisor as his main business is not wealth management)

3) Gives you advice on a wide range of products to suit your needs.

4) Should not be handling too many customers .

5) Should be easily accessible.

6) Should have experience of handling your size portfolios.

7) Advisor should have knowledge of all products even if he is not distributing them

Womantra 2 Picking an Advisor

After the basics have been met, you need to make sure the right advisor is picked.

Like diversification of your portfolio helps so does diversification of advisors. Before you take on an advisor make sure of the following.

1) Check references and independently determine how long they have worked with the bank and what type of clients they manage.

2) How often will the update on the portfolio and investments be sent and discussed

3) Who is the back up in case the advisor is not available

4) How does the advisor get paid – fees , commission or both

5) On what basis do they recommend products ( Ideally it should only be based on your needs

6) Ask questions such as:

 - What experience do you have?

- What can I expect from you?

- Are you legally bound to sell me suitable products and services?

- What is your investment philosophy?

- What additional information will you give me from time to time?

Womantra  3. What a good Advisor will do

Understanding your financial goals; knowing when you will need to use your money, and what you will be using it for. Then laying out a plan of action with specific steps you need to take to achieve those goals. A good financial advisor will give advice as to all of the following:

1)What you need to differently

2) How much you need to save

3) What types of retirement accounts to use (PPF , SIPS ),

4) What type of mortgage you should have ( Floating or Fixed )

5) What type and how much insurance you need (this would include life insurance, long term care insurance, disability, casualty and health insurance)

6) How much to keep in your emergency fund

7) What changes might improve your tax situation

8) What rate of return you will need to earn to achieve your goals over a given time frame

9) He should regularly monitor the portfolio and give you an update on the quantitative performance of the portfolio

Womantra Advise

A Good Financial Advisor Will Not make recommendations until they understand your goals, and have run a long term financial plan for you. If you don’t have a plan you will be part of someone else’s plan.

Mrin Agarwal & Rima H

Founders and Trainers Womantra

Womantraining@yahoo.com

https://www.facebook.com/pages/Womantra/630449370331031

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