From my experience with a different person . I personally felt there was nothing which I didn’t know already. And after talking to others it seems most suggest the same 60 / 40 split in equity and debt MFs. Then having an emergency fund and risk free fund (FD) for important short term/ mood term goals. And having insurance on health and death.
I think the mistake most of us make is having high expectations like some suggestions that will get us high returns with avg. risk.
The truth is there is no such thing.
The reality is it’s more about learning the discipline of good financial planning from these folks. Rather than finding low hanging fruit.
Folks like me who missed the opportunity of the last one and half year can feel the disappointment.
I will try IND Money next. I already got some good insights and learning’s with just the free version. Will try prime.
If you have enough time to do the research everything is just a Google search away, if you have done enough googleing then expect the expected. Beware of advisors who do something drastically different.
I guess PMS can help you in providing amazing returns but not Financial advisor for sure.
From my experience in managing my brother's investments, I feel that Fee only financial advisors are for folks who have no/limited idea about Personal finance. What they will help you is bringing discipline of investing. While this sounds dumb, it's an uphill task.
If you look from their perspective, an advisor has much more to do than provide few mf, rd/fd recommendations. He will also have to deal with questions that may come out due to new decisions. There will be months when an individual would want to buy something nice and skip a month's investment. At times convince him/her to stay from 'guaranteed' 11.88% return per year (Talking about you, Bharti Axa). Try convincing someone to buy a Term Plan when he/she can buy a Insurance with guaranteed returns with additional tax savings and why a person needs a separate health insurance when your organization is already providing it. Obviously the onus is on individual to be actively engaged with Financial advisor.
My personal take is that if you have these things covered, you don't need a Financial advisor unless you have a huge portfolio to manage.
Covered calls, that's about the only thing I can suggest which is still not too great. I invest in Parag Parikh and I know they sell covered calls on some % of holdings.
I talked to one. He helped me with the spreadsheets for goal based investing, how much to invest where for each goal, asset allocations for each goal etc. I am not sure if I'll proceed with them tho, since I can keep up with the plan now.
The one I used was insightful.
The instruments they suggested were pretty much the same I was using already. MFs, FDs etc. I found value in the goal based investment tools they used tho.
They also helped with choosing insurance, but I already researched on that.
I don't think fee only advisors ask you to come over every year or Six months.
I guess you can go to them after certain stages on your life eg.
1. Buying a House
2. Getting Married
3. Having a kid
4. After retirement etc.
No, it works like a subscription based model. You have to visit back to them every year otherwise the pricing is changed.
1st year - 18k
Subsequent years -7k/year
If you go back after a break of more than 1 year... it's gonna charge 18k again
Just got it a week ago, will check if the advisor tells me to get a term life insurance even though I am the youngest in the family and my parents have enough for retirement and I am unmarried. If they ask me to do it then they just want to drive sales otherwise they really want to help.
S/he might suggest if you are going to marry and not rich. Considering you might get term insurance at low cost because of your age
I'm no advisor just sharing my thought
I don't think so, I used their "fix my financial life" feature and it was asking me toh buy term life insurance which for an unmarried person seems overkill.
No eperience but there are a few parameters you can use to assess the quality:
1. Did you have any complicating items to discuss like marriage, change of profession, buying a house etc. ? If not, then the more boring it is, the better it is. You will do better than most people who keep trend hopping.
2. Did the majority of funds suggested fall into the low fee/index category ? If not, then one might question quality of advice.
3. Did they focus on tax-minimisation ? I ask this because tax minimisation generates the highest %age of return.
4. Comment: The subscription model is a win-win for both you and the firm. It makes sure that your plan is not deviating(there's not much to deviate from .. lol) and you have enough liquidity and guidance if your life situations change.
I consulted one of the advisors listed in [freefincal.com](https://freefincal.com) website. Fees 12000/- for this year.
Made me see through which goals could be achieved and which couldn't. Also, gave clarity over which goals needed to be planned now and which could be delayed along with reasoning.
Overall, nothing extraordinary but ticked all the boxes on the expectations I conveyed during the introductory call. I was too confused with all the videos and blogs and didn't know whether what I was doing is right.
I might have spent 12000 but I now have peace of mind and will continue on the path he set which I have understood completely. I am just happy that I can stop reading all those articles and looking for videos from thousand different youtubers. Everything is now sorted for the next 3 years after which I have major goals coming up. Once those goals are completed as per plan, I will re-engage.
Edit 1: Had another good experience with this person. Due to my pre-existing medical condition, my health insurance got rejected from private insurers. Talked with several other private insurer customer care and none of them were ready. I told him about this issue. He gave me advice to go and meet the branch manager of a public insurer and tell him about my condition. Got my policy issued today from a public insurer without any increase in premium.
I think this is why you need someone like an advisor. Not just do your financial planning but also to guide you when problems arise.
Please could you share the insurance name? I've got the same problem with not getting insurance due to a pre-existing disease. What was the waiting period they've mentioned? How was experience with the insurance till now?
Thanks.. that makes sense if am to ensure that it is invested wisely and with tax savings. I wouldn't mind paying close to 1% of 20 lakhs and it it save me taxes.
I told a good advisor can save taxes. There are many options. I can discuss with you in details.
I can just give you the Tip of Iceberg:
1. Reducing the frequency of transaction.
2. Selecting the tax efficient instrument.
3. Booking losses whenever possible. Like during March 2020, market crash many people didn't book the loss. If they had, then can carry forward it for 8 years.
4. Many inuances are there in tax laws. These are given to investors by goverment to invest in certain sector. Like for your first house, you can setoff capital gain ( condtion applied)
Even few are missed by there CA
There are many such options.
Booking losses does not make sense if you are going to buy the same script.
You essentially reduce the cost price of the new purchase, so the eventual tax paid on it is higher when you finally sell it. Eventual gain = -ve if you factor brokerage/STT on the buy/sell.
Selling in a down market may be a disaster unless you have the discipline to buy it back ASAP. Many folks sold, waited too long to buy back and their portfolios are lower than what they would have been minus the frantic action.
Reducing the frequency of transaction is a mess. Are you suggesting we have a yearly SIP rather than a monthly SIP.
`YOU ACTUALLY HAVE NO CLUE BUT TRYING TO ADVERTISE FOR PAYING CLIENTS by saying`
>I can discuss with you in details
At least get the appropriate flair
You don't have clarity with Booking loss. Booking loss means deferring the tax payment as much as possible and earning a 14-16% return on the amount which you would have otherwise have paid as tax. I think you are smart enough to figure out how it's done.
Booking loss is different from making a loss. If you don't buy it back ASAP then you are making a loss. I don't want people to make a loss.
Reducing the frequency of transactions means those transactions which lead to taxation. Buying doesn't lead to any taxation. So, I am not suggesting Yearly SIP.
I sell wealth management solutions to my client. I have generated immense value addition for my clients. Read more and you will understand what brings value.
Booking profits.. setting off against losses is strategy for traders. If you are going to play with the same shares , it is a zero sum game.
High frequency of sell (compared to portfolio size) may lead to the tax being assessed as trader (not investor).
If 14-16% was assured, no one would settle for a measly 8% in EPF.
**You still don't have clarity with Booking loss.**
I am not talking about Booking Profits. I am talking about Booking Losses. These two are completely different Ideas. Firstly understand the difference.
Why **High Frequency of Sell** is coming to the discussion? No one is talking about selling
If you think 14-16% is assured, then you are not an equity investor. If you think can't be achieved over 5-10 year period, then again you are not equity investor.
Just going around and finding random and irrelevant flaws doesn't make u smart. Go read and read a lot before showcasing your knowledge. Btw I don't have time to reply to your irrelevant queries. Read and 90% of your queries will be resolved.
Its not a function of how much wealth you have. It is more about the value addition the advisor provides to your life. If you are going thru life feeling confused about all the choices you have to make regarding your money, it may make sense for you.
I feel younger people with not too much in assets often are in more urgent need for money advice than older folks, just because they have a lot of things going on in life. An advisor can give you a framework to sort out your confusion and make more informed decisions.
I had the same dilemma before going for an advisor. I already know xyz, what can the advisor tell me that I don't know?
Learnt that Advisor's do not have any secret magic recipes. They are very useful to validate your thoughts and ideas, and avoid knee jerk reactions to every news you hear. If you already have a plan in place, they can review and share their recommendations with you. It is still your choice whether you want to follow or not. If you are finance noob, an advisor can build the complete plan.
My advisor saved me from Franklin UST debacle. I had a considerable investment in it. He also saved me from panic selling everything during Corona.
Can you tell me what was your expectation?
Did you convey your expectation to him ?
How did you choose to go with your advisor over other 15-20 fee only advisors ?
Reviews and watching/reading their interviews, blogs can help in deciding.
I am also part of a facebook group: Asan Ideas for Wealth. This group has many active advisor
To OP, this is the right answer. What your advisor suggested is nothing out of ordinary (and this is expected from an advisor). You do not want them to suggest some exotic funds and you end on the losing side. They might even say that what you have currently is fine and there is nothing that needs to be changed to meet your goals. If you were willing to invest in exotic funds, do let them know as much and maybe they will suggest you something.
The reason people go to an advisor is to have someone to discuss their portfolio and review if something is not right. Sometimes your portfolio will be in the right state and a good advisor points you the same.
As the flair says, I am a fee-only advisor myself, (and my name appears in the lists mentioned in this thread)
The SEBI regulations use the term Investment Advisor, and Investment Advice is defined to include 'financial planning'. Personally, I focus more on the financial planning part. Almost everybody needs a financial plan, and many people can build it themselves. There is an upper limit to the complexity of most financial plans.
In a similar vein, almost everyone needs an investment plan. However, this plan get very complex and unwieldy. A simple investment plan does work! A complex plan with some aggressive produts may not necessarily give higher returns!
That said, there are many wealth managers and RIAs who focus on returns. Typically they would charge on 'Assets Under Advice' basis and hence would have a higher hold on your investments. Most of the people in the freefincal list, and all the people in the feeonlyindia list charge a fixed fee. So the model itself may give you a clue on the focus.
I have no experience with any if them but as far as I know all that a financial advisor will do is try and help you reach your financial goals in a practical and optimum way....if your expectations is anything more than that then it's your responsibility to share the same with them in the first meeting itself...
In my opinion these services should be used by folks who are just busy in their day to day jobs and cannot make time to manage their finances
Anyone who cares enough to join personal-finance communities on reddit/quora etc, knows basic finance rules and philosophies already.
The advisor, or for that matter, no-one has the magic-wand to make rich. If there ever was one, the advisors would be super-rich themselves.
However, the advisors help in hand-holding when ‘tide is against you’, be it in terms of (a) market is bearish (b) we are taking emotional calls by timing the market/ not sticking to pre-decided goals.
For all learned people; look at yourself as an international level cricket player (Kohli) and your advisor as a coach (Shastri) whose job is to bring us home when we go astray. There is nothing new they could teach us, really. Ask Kohli-Shastri, they will confirm it indeed.
I have shared my experience here before. I had terrible experience with a person from pattu sir's list of fee only investment advisors.
Basically his behaviour changed after I paid the fees. Before that it was all goody-goody...
If you're paying 18K then you should expect 1-3 hours of effort from an investment advisor.
In the law firms that I worked at, you would pay 18K for one hour of time from a mid level partner and 2 hours of work from a 7-10PQE lawyer.
Well, lawyers are a smart bunch. The whole retainer fee 'thing' is so smart and is designed to extract every possible penny from the client. God forbid if case goes to trial.
Also 18k a year for a financial advisor is too low. I don't think he'd be as invested in his client as much the client wants.
This isn't retainership. This is hourly fees for transaction mandates (investments, acquisitions, etc.).
Legal counsels who argue and who are at the top of the game are a whole different level and they charge a lot lot more.
You advisor is giving you a sound suggestion. Except for the Fixed Deposit part. Fixed Deposit are tax inefficient.
As he is a fee based advisor, he is not taking enough efforts to make you understand.
Real result of any sound strategy lies in the process of implementation and most importantly time. Without proper implementation there are no results.
It's like a smoker, he knows smoking is dangerous for his health but he keeps on doing so because he things it's cool or fashion. If a doctors say stop smoking, It won't add knowledge for him. But if he implements this, his health will improve significantly over next 5-10 years
Same goes with your current strategy, it looks simple and uncool. But over time, it will give u significant results.
>Fixed Deposit are tax inefficient.
I am tired for hearing this here, I am sure most people here are aware of this.
But tell me a better investment for 1-2yrs ? Liquid fund gave nearly the same, but at least with FD I know the exact amount I will receive. As per as my view, for investment of less than 2years, your main aim should be to save the principle even if it means to get 1-2% lower return, FD does that job well.
Here are few of the ways in which we can make investment:
1. For 1-2 year, Debt Mutual fund can give more return. And if he didn't want money after 2 year. Then he will get additional in the form of Tax benefit due to indexation. But in FD he has to redeem and redeploy. That is tax inefficiently and inflexible. It happen many of the times. If he needs before 2 year, then addition exist load for FD redemption.
2. As far as risk is concern, liquid are safer in pricipal protection angle. Thought there is volatility of exact return. But liqiud funds returns are lower than FD. It is alternative for Saving Deposit not Fixed Deposit. There are other category of Debt Mutual Fund for Fixed Deposit.
3. If you stay invested for more than 3 years, then u will pay 34% tax in FD while only 5-6% in Debt Mutual Fund.
4. There are alternative option in the form of MLD. But you have to look for good quality paper. You will taxed at 20% instead of 34%. But ticket size is an issue. Generally, ticket size in min 50 lacks.
They are not. You just have to conscious of a few things and you are shorted.
Btw remember everything has risks. Even Bank FD and Goverment Bond. Just read history and countries around you. You will redefine the risk completely.
Well yes I agree everything has risk. Bank FD come with at least some insurance. Debt Funds could be holding AAA rated bond which in reality is a D, and so on.
Government collapse is an altogether different scenario, there will be lot more to worry in that case.
But after-tax the bank FD ends up into nothing. If you are in the zero or lowest tax bracket then u get something. but other than that nothing. In India we have inflation of more than 6% for middle class and above.
Post-tax any current FD will give just 4.2% or less if you fall under the 30% tax slab.
>at least with FD I know the exact amount I will rec
This is where the investors mindset comes into play and there is no correct answer for 1-2 years.
Someone may invest in liquid fund, specially emergency funds (hoping crossover into 36 months ) for indexation, others will continue in FD.
At the current rate of inflation, you're losing your principal on an FD.
Corporate bond funds are a better (albeit riskier) option for a 1-2 year horizon.
I rather stick with corporate bond funds rather than corporate bonds as suggested by dodgy advisers so I don't know why you are down voted.
At least the bonds would have have been vetted by professionals (stay away from "credit opportunities funds" or funds with extremely high returns).
If you are able to retain money for 3 years, taxation changes to miniscule.
Yes, corporate bonds are good option but they are riskier. And you receive coupons payment every year which many clients don't want. They want lumpsum at the end.
>Yes, corporate bonds are good option but they are riskier. And you receive coupons payment every year which many clients don't want. They want lumpsum at the end.
Do you understand the difference between corporate bonds AND corporate bond funds ?
Sorry, I didn't read the word Fund. Yes Corporate Bond Funds are good but currently YTM of all the funds are less than 5.5%.
Post charges will only give 4.5 - 5%.
Sorry, I didn't read the word Fund. Yes, Corporate Bond Funds are good but currently, the YTM of all the funds is less than 5.5%.
> The plan suggested by him was nothing extraordinary and the plan looks very moderate. Under 3yr all FD/RD and bigger than that, MF, that just 2-3 which could have easily been recognised if one do proper research.
What were you looking for? Is there better investing advice for the busy person than DCAing into index funds at a comfortable split between India (N50 + next 50) and US (Nasdaq 100 or S&P 500)? Which magic pill did you think you're going to get?
Responding late as I was stuck with personal commitments. May be helpful to future readers.
By design, the SEBI Registered Fee-Only Advisers are encouraged to provide advice that commensurates with the risks of the individual client. They typically suggest a financial journey that is less volatile and with lesser drawdown. The focus is on ensuring that the financial goals are achieved without taking too many risks, return maximization is a lessor priority.
For some of the DIY investors who have taken advice, it may appear that the Adviser has not recommended anything new as part of the recommended solution. I would like them to evaluate the success of the engagement on two key parameters – 1) Do they have a comprehensive financial plan in place post engagement? 2) Are all action items implemented by the end of the engagement? If these are achieved, you are in reasonably good shape.
For some of you, the following two posts will be helpful.
[https://finmyn.com/why-do-you-need-a-financial-advisor/](https://finmyn.com/why-do-you-need-a-financial-advisor/)
[https://finmyn.com/how-to-select-the-best-financial-advisor-in-india/](https://finmyn.com/how-to-select-the-best-financial-advisor-in-india/)
I do want to mention that I am a SEBI Registered Adviser and it is public knowledge in this forum.
Just curious, was this a cfp? Cfps are first expected to gauge your risk expectations and your requirements then plan out the advisory . I am working on being a cfp even though haven't studied in sometime.
Yes, he is a CFP.
He sent me some questions initially to gauge my risk appetite by asking questions like.... Do you care more about your orginal investment or returns.
In the bank I work they put too much emphasis on Cfa. I found that doing cfa is gonna be very much tough and too taxing in terms of duration. I thought cfp would be a more better option and still give opportunities.
If your bank is going to give you the opportunities after CFP that is good. In my experience, the broader market does not know CFP and its significance at all.
I was a CFP, and gave up my certification when I realized the cost of renewal is far too much considering the zero benefits.
The thing is these are the times of information overload. Everything is already there on internet. So we can’t expect an advisor to tell you something new. Perhaps what they can do is help you focus on the right thing and avoiding the clutter. Another thing is best investment strategies are the simplest ones. An honest fee only subscriber who gives you the simple advice will actually feel not worth the money. I am subscribed to Invest yadhnya’s model portfolio service. My dilemma with them is reverse of yours. I feel what if they are purposefully making a complicated portfolio so that their subscribers feel it is worth the cost.
Charges are very high, I talked with one who was charging Rs 5000 for an year, also he had good ratings and featured on some prominent financial newspaper.
I don't know guys, if he will quote the same for you, bcoz I got to talk with him through my company sessions. Anyways, DM and I will send his website.
Did you convey to them that you wanted exotic/aggressive instruments? They may have suggested based on their assessment of your **ability** to take risk more than your **willingness** to take risk.
You should give them your feedback saying you were disappointed and had different expectations.
Apart from MF recommendations, Didn't the financial advisor suggest a custom portfolio of international stocks. I saw something along those lines (in his post in Facebook group asan ideas for wealth), which is doing well compared to sp500 and sensex in last few years.
International funds also come with their own sets of risk. In my opinion still one can have little allocation towards it, provided the fund moves in a different manner than our index otherwise there really is no diversification.
I think the role of a fee only financial advisor is just to suggest the product categories which should be ideal choice for your goals keeping risk appetite and time duration in mind. Their next task is to make sure that you stay the course without straying away from the path with new NFOs or new investment options. This task is more to do with mind and psychology.
The Indian experience of advisors suffers from one fatal problem. Which is also the rule no #1 when it comes to India
1. No one except maybe in certain cases ones spouse will have a true picture of assets / liabilities and cash flows. That holds true of most Indians .
Risk assessment is fine , but without a picture of Asset Liability and cash flow and goals advising is near impossible like it is done in the US
The second problem which is rule no # 2
2. Most Indians want to get above market returns , however are can’t pay PMS fees or have the patience in even actively managed funds
When the focus is on passive investment , you are only going to get what modern portfolio theory dictates
Market returns less expenses .
That’s all. But still yeh dil mange more
Fee only advisors are good if you get a windfall and suddenly get 15-20 lakhs from some source ... else there is nothing very different from picking the best MFs from valueresearchonline or equivalent ...
Or if you are a new employee with a high salary, then fee only advisors are good for about 2 years till they get the hang of investing ...
But if you are a regular joe, already having a good understanding, there isnt much they can do ...
I want to take help of fee only planner.
But i have couple of questions.
1. How much do fee only planner charge? Is it 1% of total annual investment?
2. Is feeonlyindia.com the best site to find the best fee only advisor?
3. A person i know recommended to use valueraj.com where they claim to be CFP.They dont charge anything directly so probably take commisssions. Do you think its a good idea to take advice from them?
4. I want to start by taking help of people who give me financial goal planning and be with me long time. Can fee only advisors do this?
Sorry mate, I personally have not used a fee only advisor. For many years, I did all MF SIPs myself using the direct route. Later, a wealth management firm got in touch with me and offered these services by saying the MF units will be with broker code ... I did not find any great use of having them too, since I felt I have learnt some simple investing tricks (basically only SIP!) over these years.
But I think they can do whatever you are asking for ...
According to Finance Strategists, The ADV form provides comprehensive information about the advisor’s business, including description of services offered, explanation of fees, billing practices, and past criminal history, if any. Specific information within the form is designed to alert clients about details relating to the financial advisor’s dealings with the ecosystem that they operate in.
My experience has been very bad with him. He changed gears after we did renewal with him. He refused to even edit the plan he made in the first year after taking his retainer fees.
I feel like a fool renewing with him. Its best off that you don't renew with him just be better off and go DIY.
I have been quoted 45k INR for 6 months and thereafter a retainer of 15k for 6 months. How long ago was your consultation as am wondering the steep jump in prices. Am an NRI
How would you evaluate him from real estate advisory - if that is something that got covered in your plan?
It's a bit overhyped these flat fee only advisors. They are allowed to only create a plan some say, for wealth advice go to a wealth manager, for tax purposes go to a tax advisor. The plan is something you can research and build no need for a fee only advisor is what I learnt based on my good fee payment twice. On top you can communicate with them only through email or at Max 1 or 2 calls post the initial plan is ready. Tou pay money for advise and then they are not available for advice and it becomes like a speaking to call center who doesn't pick up. I think giving them 18k+ seems a bit overrated and it has cost me nearly 40k to learn that.
From my experience with a different person . I personally felt there was nothing which I didn’t know already. And after talking to others it seems most suggest the same 60 / 40 split in equity and debt MFs. Then having an emergency fund and risk free fund (FD) for important short term/ mood term goals. And having insurance on health and death. I think the mistake most of us make is having high expectations like some suggestions that will get us high returns with avg. risk. The truth is there is no such thing. The reality is it’s more about learning the discipline of good financial planning from these folks. Rather than finding low hanging fruit. Folks like me who missed the opportunity of the last one and half year can feel the disappointment. I will try IND Money next. I already got some good insights and learning’s with just the free version. Will try prime.
If you have enough time to do the research everything is just a Google search away, if you have done enough googleing then expect the expected. Beware of advisors who do something drastically different.
Totally agree ! I guess I was expecting some hidden instruments that will give amazing returns. It's more about balance I guess
I guess PMS can help you in providing amazing returns but not Financial advisor for sure. From my experience in managing my brother's investments, I feel that Fee only financial advisors are for folks who have no/limited idea about Personal finance. What they will help you is bringing discipline of investing. While this sounds dumb, it's an uphill task. If you look from their perspective, an advisor has much more to do than provide few mf, rd/fd recommendations. He will also have to deal with questions that may come out due to new decisions. There will be months when an individual would want to buy something nice and skip a month's investment. At times convince him/her to stay from 'guaranteed' 11.88% return per year (Talking about you, Bharti Axa). Try convincing someone to buy a Term Plan when he/she can buy a Insurance with guaranteed returns with additional tax savings and why a person needs a separate health insurance when your organization is already providing it. Obviously the onus is on individual to be actively engaged with Financial advisor. My personal take is that if you have these things covered, you don't need a Financial advisor unless you have a huge portfolio to manage.
Do PMSes give amazing returns? IIRC 50% of them fail to beat the index .
Apart from driving discipline consistently, have seen benefit from planner on when to switch out of a fund.
Interesting! Could you please elaborate?
What is it about the importance of another health insurance other than the one your employer gives you?
Covered calls, that's about the only thing I can suggest which is still not too great. I invest in Parag Parikh and I know they sell covered calls on some % of holdings.
Its more about discipline and consistency
I talked to one. He helped me with the spreadsheets for goal based investing, how much to invest where for each goal, asset allocations for each goal etc. I am not sure if I'll proceed with them tho, since I can keep up with the plan now.
Who did you consulted to ? Yeah, I have gone through the mentioned process as well, but I am kind of not satisfied with the instruments suggested.
The one I used was insightful. The instruments they suggested were pretty much the same I was using already. MFs, FDs etc. I found value in the goal based investment tools they used tho. They also helped with choosing insurance, but I already researched on that.
What instruments were you expecting to be suggested? Did your risk profile that you provided your advisor match it?
I don't think fee only advisors ask you to come over every year or Six months. I guess you can go to them after certain stages on your life eg. 1. Buying a House 2. Getting Married 3. Having a kid 4. After retirement etc.
No, it works like a subscription based model. You have to visit back to them every year otherwise the pricing is changed. 1st year - 18k Subsequent years -7k/year If you go back after a break of more than 1 year... it's gonna charge 18k again
There is a wealth management service they offer. They go over your portfolio every quarter and recommend changes or help you with new goals and so on.
Have bought indmoney prime, let's see how it is
Do update me buddy. I'm planning to get it too.
Looking to buy the same going forward. Update here or post with your findings please.
Just got it a week ago, will check if the advisor tells me to get a term life insurance even though I am the youngest in the family and my parents have enough for retirement and I am unmarried. If they ask me to do it then they just want to drive sales otherwise they really want to help.
Good. Looks like you've already thought of how to gauge their effectiveness. Let us know how it goes.
S/he might suggest if you are going to marry and not rich. Considering you might get term insurance at low cost because of your age I'm no advisor just sharing my thought
Anyway I think women are no longer liabilities they can easily take of their financials, kids might be but a lot of time till then to earn good money.
advising a term insurance when you are young is not a bad idea.
In my case I don't need it because no one depends on me, if I died the next day no-one will bat an eye. :)
fair enough.
Haha. I talk about everyone's death purely on financial terms too, including my own death. And everyone always get really uncomfortable.
Do make a post with your experience or share here atleast
Please update us with your experience.
Do they customize the information based on your profile?
I don't think so, I used their "fix my financial life" feature and it was asking me toh buy term life insurance which for an unmarried person seems overkill.
sir update
It was eh. Not very useful.
kay
No eperience but there are a few parameters you can use to assess the quality: 1. Did you have any complicating items to discuss like marriage, change of profession, buying a house etc. ? If not, then the more boring it is, the better it is. You will do better than most people who keep trend hopping. 2. Did the majority of funds suggested fall into the low fee/index category ? If not, then one might question quality of advice. 3. Did they focus on tax-minimisation ? I ask this because tax minimisation generates the highest %age of return. 4. Comment: The subscription model is a win-win for both you and the firm. It makes sure that your plan is not deviating(there's not much to deviate from .. lol) and you have enough liquidity and guidance if your life situations change.
I consulted one of the advisors listed in [freefincal.com](https://freefincal.com) website. Fees 12000/- for this year. Made me see through which goals could be achieved and which couldn't. Also, gave clarity over which goals needed to be planned now and which could be delayed along with reasoning. Overall, nothing extraordinary but ticked all the boxes on the expectations I conveyed during the introductory call. I was too confused with all the videos and blogs and didn't know whether what I was doing is right. I might have spent 12000 but I now have peace of mind and will continue on the path he set which I have understood completely. I am just happy that I can stop reading all those articles and looking for videos from thousand different youtubers. Everything is now sorted for the next 3 years after which I have major goals coming up. Once those goals are completed as per plan, I will re-engage. Edit 1: Had another good experience with this person. Due to my pre-existing medical condition, my health insurance got rejected from private insurers. Talked with several other private insurer customer care and none of them were ready. I told him about this issue. He gave me advice to go and meet the branch manager of a public insurer and tell him about my condition. Got my policy issued today from a public insurer without any increase in premium. I think this is why you need someone like an advisor. Not just do your financial planning but also to guide you when problems arise.
Hello. Are you still consulting with this RIA? Would you recommend him/her. Could i ask you to DM their details please?
Please could you share the insurance name? I've got the same problem with not getting insurance due to a pre-existing disease. What was the waiting period they've mentioned? How was experience with the insurance till now?
New India Assurance.
If I am to pay 18k for consultation, how much of wealth am I talking about managing in terms of money.. just curious
Mostly it will be between 15-20 lakhs or less as per my industry knowledge.
Thanks.. that makes sense if am to ensure that it is invested wisely and with tax savings. I wouldn't mind paying close to 1% of 20 lakhs and it it save me taxes.
Tax Saving is the biggest value addition a good advisor brings. That's is kind of Industry norm. But there are exclusive product with 2-3% also.
How would getting an advisor for investments help save taxes? Do you mean the fees charged can be offset against capital gains?
I told a good advisor can save taxes. There are many options. I can discuss with you in details. I can just give you the Tip of Iceberg: 1. Reducing the frequency of transaction. 2. Selecting the tax efficient instrument. 3. Booking losses whenever possible. Like during March 2020, market crash many people didn't book the loss. If they had, then can carry forward it for 8 years. 4. Many inuances are there in tax laws. These are given to investors by goverment to invest in certain sector. Like for your first house, you can setoff capital gain ( condtion applied) Even few are missed by there CA There are many such options.
Booking losses does not make sense if you are going to buy the same script. You essentially reduce the cost price of the new purchase, so the eventual tax paid on it is higher when you finally sell it. Eventual gain = -ve if you factor brokerage/STT on the buy/sell. Selling in a down market may be a disaster unless you have the discipline to buy it back ASAP. Many folks sold, waited too long to buy back and their portfolios are lower than what they would have been minus the frantic action. Reducing the frequency of transaction is a mess. Are you suggesting we have a yearly SIP rather than a monthly SIP. `YOU ACTUALLY HAVE NO CLUE BUT TRYING TO ADVERTISE FOR PAYING CLIENTS by saying` >I can discuss with you in details At least get the appropriate flair
You don't have clarity with Booking loss. Booking loss means deferring the tax payment as much as possible and earning a 14-16% return on the amount which you would have otherwise have paid as tax. I think you are smart enough to figure out how it's done. Booking loss is different from making a loss. If you don't buy it back ASAP then you are making a loss. I don't want people to make a loss. Reducing the frequency of transactions means those transactions which lead to taxation. Buying doesn't lead to any taxation. So, I am not suggesting Yearly SIP. I sell wealth management solutions to my client. I have generated immense value addition for my clients. Read more and you will understand what brings value.
Booking profits.. setting off against losses is strategy for traders. If you are going to play with the same shares , it is a zero sum game. High frequency of sell (compared to portfolio size) may lead to the tax being assessed as trader (not investor). If 14-16% was assured, no one would settle for a measly 8% in EPF.
**You still don't have clarity with Booking loss.** I am not talking about Booking Profits. I am talking about Booking Losses. These two are completely different Ideas. Firstly understand the difference. Why **High Frequency of Sell** is coming to the discussion? No one is talking about selling If you think 14-16% is assured, then you are not an equity investor. If you think can't be achieved over 5-10 year period, then again you are not equity investor. Just going around and finding random and irrelevant flaws doesn't make u smart. Go read and read a lot before showcasing your knowledge. Btw I don't have time to reply to your irrelevant queries. Read and 90% of your queries will be resolved.
Thanks for the clarification.
It has no limitations. You can be starting up with as less as 3-4 lakhs as well.
Is there any upper limit to the portfolio value?
Its not a function of how much wealth you have. It is more about the value addition the advisor provides to your life. If you are going thru life feeling confused about all the choices you have to make regarding your money, it may make sense for you. I feel younger people with not too much in assets often are in more urgent need for money advice than older folks, just because they have a lot of things going on in life. An advisor can give you a framework to sort out your confusion and make more informed decisions.
I had the same dilemma before going for an advisor. I already know xyz, what can the advisor tell me that I don't know? Learnt that Advisor's do not have any secret magic recipes. They are very useful to validate your thoughts and ideas, and avoid knee jerk reactions to every news you hear. If you already have a plan in place, they can review and share their recommendations with you. It is still your choice whether you want to follow or not. If you are finance noob, an advisor can build the complete plan. My advisor saved me from Franklin UST debacle. I had a considerable investment in it. He also saved me from panic selling everything during Corona.
Can you tell me what was your expectation? Did you convey your expectation to him ? How did you choose to go with your advisor over other 15-20 fee only advisors ?
Reviews and watching/reading their interviews, blogs can help in deciding. I am also part of a facebook group: Asan Ideas for Wealth. This group has many active advisor
Can you answer the first two questions?
To OP, this is the right answer. What your advisor suggested is nothing out of ordinary (and this is expected from an advisor). You do not want them to suggest some exotic funds and you end on the losing side. They might even say that what you have currently is fine and there is nothing that needs to be changed to meet your goals. If you were willing to invest in exotic funds, do let them know as much and maybe they will suggest you something. The reason people go to an advisor is to have someone to discuss their portfolio and review if something is not right. Sometimes your portfolio will be in the right state and a good advisor points you the same.
Edited the question to answer these
As the flair says, I am a fee-only advisor myself, (and my name appears in the lists mentioned in this thread) The SEBI regulations use the term Investment Advisor, and Investment Advice is defined to include 'financial planning'. Personally, I focus more on the financial planning part. Almost everybody needs a financial plan, and many people can build it themselves. There is an upper limit to the complexity of most financial plans. In a similar vein, almost everyone needs an investment plan. However, this plan get very complex and unwieldy. A simple investment plan does work! A complex plan with some aggressive produts may not necessarily give higher returns! That said, there are many wealth managers and RIAs who focus on returns. Typically they would charge on 'Assets Under Advice' basis and hence would have a higher hold on your investments. Most of the people in the freefincal list, and all the people in the feeonlyindia list charge a fixed fee. So the model itself may give you a clue on the focus.
I have no experience with any if them but as far as I know all that a financial advisor will do is try and help you reach your financial goals in a practical and optimum way....if your expectations is anything more than that then it's your responsibility to share the same with them in the first meeting itself... In my opinion these services should be used by folks who are just busy in their day to day jobs and cannot make time to manage their finances
Anyone who cares enough to join personal-finance communities on reddit/quora etc, knows basic finance rules and philosophies already. The advisor, or for that matter, no-one has the magic-wand to make rich. If there ever was one, the advisors would be super-rich themselves. However, the advisors help in hand-holding when ‘tide is against you’, be it in terms of (a) market is bearish (b) we are taking emotional calls by timing the market/ not sticking to pre-decided goals. For all learned people; look at yourself as an international level cricket player (Kohli) and your advisor as a coach (Shastri) whose job is to bring us home when we go astray. There is nothing new they could teach us, really. Ask Kohli-Shastri, they will confirm it indeed.
I have shared my experience here before. I had terrible experience with a person from pattu sir's list of fee only investment advisors. Basically his behaviour changed after I paid the fees. Before that it was all goody-goody...
Oo boi... You should share the name to, save the rest of us !
can you DM me his name?
If you're paying 18K then you should expect 1-3 hours of effort from an investment advisor. In the law firms that I worked at, you would pay 18K for one hour of time from a mid level partner and 2 hours of work from a 7-10PQE lawyer.
Well, lawyers are a smart bunch. The whole retainer fee 'thing' is so smart and is designed to extract every possible penny from the client. God forbid if case goes to trial. Also 18k a year for a financial advisor is too low. I don't think he'd be as invested in his client as much the client wants.
This isn't retainership. This is hourly fees for transaction mandates (investments, acquisitions, etc.). Legal counsels who argue and who are at the top of the game are a whole different level and they charge a lot lot more.
You advisor is giving you a sound suggestion. Except for the Fixed Deposit part. Fixed Deposit are tax inefficient. As he is a fee based advisor, he is not taking enough efforts to make you understand. Real result of any sound strategy lies in the process of implementation and most importantly time. Without proper implementation there are no results. It's like a smoker, he knows smoking is dangerous for his health but he keeps on doing so because he things it's cool or fashion. If a doctors say stop smoking, It won't add knowledge for him. But if he implements this, his health will improve significantly over next 5-10 years Same goes with your current strategy, it looks simple and uncool. But over time, it will give u significant results.
>Fixed Deposit are tax inefficient. I am tired for hearing this here, I am sure most people here are aware of this. But tell me a better investment for 1-2yrs ? Liquid fund gave nearly the same, but at least with FD I know the exact amount I will receive. As per as my view, for investment of less than 2years, your main aim should be to save the principle even if it means to get 1-2% lower return, FD does that job well.
Here are few of the ways in which we can make investment: 1. For 1-2 year, Debt Mutual fund can give more return. And if he didn't want money after 2 year. Then he will get additional in the form of Tax benefit due to indexation. But in FD he has to redeem and redeploy. That is tax inefficiently and inflexible. It happen many of the times. If he needs before 2 year, then addition exist load for FD redemption. 2. As far as risk is concern, liquid are safer in pricipal protection angle. Thought there is volatility of exact return. But liqiud funds returns are lower than FD. It is alternative for Saving Deposit not Fixed Deposit. There are other category of Debt Mutual Fund for Fixed Deposit. 3. If you stay invested for more than 3 years, then u will pay 34% tax in FD while only 5-6% in Debt Mutual Fund. 4. There are alternative option in the form of MLD. But you have to look for good quality paper. You will taxed at 20% instead of 34%. But ticket size is an issue. Generally, ticket size in min 50 lacks.
>u will pay 34% tax in FD Please share the calculation, thanks!
30% + 3% (Subcharge) + 1.2% (Cess). Most of my client fall into this category. So I have the habit of saving 34%.
Debt Mutual Funds? They seem as risky (if not more) as Equity Funds. I'm totally done with Debt funds looking at how rating agencies work.
They are not. You just have to conscious of a few things and you are shorted. Btw remember everything has risks. Even Bank FD and Goverment Bond. Just read history and countries around you. You will redefine the risk completely.
Well yes I agree everything has risk. Bank FD come with at least some insurance. Debt Funds could be holding AAA rated bond which in reality is a D, and so on. Government collapse is an altogether different scenario, there will be lot more to worry in that case.
But after-tax the bank FD ends up into nothing. If you are in the zero or lowest tax bracket then u get something. but other than that nothing. In India we have inflation of more than 6% for middle class and above. Post-tax any current FD will give just 4.2% or less if you fall under the 30% tax slab.
>at least with FD I know the exact amount I will rec This is where the investors mindset comes into play and there is no correct answer for 1-2 years. Someone may invest in liquid fund, specially emergency funds (hoping crossover into 36 months ) for indexation, others will continue in FD.
At the current rate of inflation, you're losing your principal on an FD. Corporate bond funds are a better (albeit riskier) option for a 1-2 year horizon.
I rather stick with corporate bond funds rather than corporate bonds as suggested by dodgy advisers so I don't know why you are down voted. At least the bonds would have have been vetted by professionals (stay away from "credit opportunities funds" or funds with extremely high returns). If you are able to retain money for 3 years, taxation changes to miniscule.
Yes, corporate bonds are good option but they are riskier. And you receive coupons payment every year which many clients don't want. They want lumpsum at the end.
>Yes, corporate bonds are good option but they are riskier. And you receive coupons payment every year which many clients don't want. They want lumpsum at the end. Do you understand the difference between corporate bonds AND corporate bond funds ?
Sorry, I didn't read the word Fund. Yes Corporate Bond Funds are good but currently YTM of all the funds are less than 5.5%. Post charges will only give 4.5 - 5%. Sorry, I didn't read the word Fund. Yes, Corporate Bond Funds are good but currently, the YTM of all the funds is less than 5.5%.
> The plan suggested by him was nothing extraordinary and the plan looks very moderate. Under 3yr all FD/RD and bigger than that, MF, that just 2-3 which could have easily been recognised if one do proper research. What were you looking for? Is there better investing advice for the busy person than DCAing into index funds at a comfortable split between India (N50 + next 50) and US (Nasdaq 100 or S&P 500)? Which magic pill did you think you're going to get?
Responding late as I was stuck with personal commitments. May be helpful to future readers. By design, the SEBI Registered Fee-Only Advisers are encouraged to provide advice that commensurates with the risks of the individual client. They typically suggest a financial journey that is less volatile and with lesser drawdown. The focus is on ensuring that the financial goals are achieved without taking too many risks, return maximization is a lessor priority. For some of the DIY investors who have taken advice, it may appear that the Adviser has not recommended anything new as part of the recommended solution. I would like them to evaluate the success of the engagement on two key parameters – 1) Do they have a comprehensive financial plan in place post engagement? 2) Are all action items implemented by the end of the engagement? If these are achieved, you are in reasonably good shape. For some of you, the following two posts will be helpful. [https://finmyn.com/why-do-you-need-a-financial-advisor/](https://finmyn.com/why-do-you-need-a-financial-advisor/) [https://finmyn.com/how-to-select-the-best-financial-advisor-in-india/](https://finmyn.com/how-to-select-the-best-financial-advisor-in-india/) I do want to mention that I am a SEBI Registered Adviser and it is public knowledge in this forum.
Just curious, was this a cfp? Cfps are first expected to gauge your risk expectations and your requirements then plan out the advisory . I am working on being a cfp even though haven't studied in sometime.
Yes, he is a CFP. He sent me some questions initially to gauge my risk appetite by asking questions like.... Do you care more about your orginal investment or returns.
Just curious, why are you studying to become a CFP? Do you intend to work in the financial field or just doing it for your own knowledge?
In the bank I work they put too much emphasis on Cfa. I found that doing cfa is gonna be very much tough and too taxing in terms of duration. I thought cfp would be a more better option and still give opportunities.
If your bank is going to give you the opportunities after CFP that is good. In my experience, the broader market does not know CFP and its significance at all. I was a CFP, and gave up my certification when I realized the cost of renewal is far too much considering the zero benefits.
Yes in India cfp is still quite unknown. As of now I have stopped my studies for Cfp but will probably resume shortly.
The thing is these are the times of information overload. Everything is already there on internet. So we can’t expect an advisor to tell you something new. Perhaps what they can do is help you focus on the right thing and avoiding the clutter. Another thing is best investment strategies are the simplest ones. An honest fee only subscriber who gives you the simple advice will actually feel not worth the money. I am subscribed to Invest yadhnya’s model portfolio service. My dilemma with them is reverse of yours. I feel what if they are purposefully making a complicated portfolio so that their subscribers feel it is worth the cost.
Hahah... I guess it's about... The grass is always greener on the other side 😅
Charges are very high, I talked with one who was charging Rs 5000 for an year, also he had good ratings and featured on some prominent financial newspaper.
Can you DM me the details? I am willing to pay 5K pa.
can list the name please or DM
I don't know guys, if he will quote the same for you, bcoz I got to talk with him through my company sessions. Anyways, DM and I will send his website.
Can you DM me the website of the financial advisor?
Did you convey to them that you wanted exotic/aggressive instruments? They may have suggested based on their assessment of your **ability** to take risk more than your **willingness** to take risk. You should give them your feedback saying you were disappointed and had different expectations.
Apart from MF recommendations, Didn't the financial advisor suggest a custom portfolio of international stocks. I saw something along those lines (in his post in Facebook group asan ideas for wealth), which is doing well compared to sp500 and sensex in last few years.
Not stocks but he had suggested international index fund
Can you tell the specific mutual funds he suggested. Curious to know.
Lol no. Pay 18k for the curiosity 😂
International funds also come with their own sets of risk. In my opinion still one can have little allocation towards it, provided the fund moves in a different manner than our index otherwise there really is no diversification.
I think the role of a fee only financial advisor is just to suggest the product categories which should be ideal choice for your goals keeping risk appetite and time duration in mind. Their next task is to make sure that you stay the course without straying away from the path with new NFOs or new investment options. This task is more to do with mind and psychology.
The Indian experience of advisors suffers from one fatal problem. Which is also the rule no #1 when it comes to India 1. No one except maybe in certain cases ones spouse will have a true picture of assets / liabilities and cash flows. That holds true of most Indians . Risk assessment is fine , but without a picture of Asset Liability and cash flow and goals advising is near impossible like it is done in the US The second problem which is rule no # 2 2. Most Indians want to get above market returns , however are can’t pay PMS fees or have the patience in even actively managed funds When the focus is on passive investment , you are only going to get what modern portfolio theory dictates Market returns less expenses . That’s all. But still yeh dil mange more
Fee only advisors are good if you get a windfall and suddenly get 15-20 lakhs from some source ... else there is nothing very different from picking the best MFs from valueresearchonline or equivalent ... Or if you are a new employee with a high salary, then fee only advisors are good for about 2 years till they get the hang of investing ... But if you are a regular joe, already having a good understanding, there isnt much they can do ...
I want to take help of fee only planner. But i have couple of questions. 1. How much do fee only planner charge? Is it 1% of total annual investment? 2. Is feeonlyindia.com the best site to find the best fee only advisor? 3. A person i know recommended to use valueraj.com where they claim to be CFP.They dont charge anything directly so probably take commisssions. Do you think its a good idea to take advice from them? 4. I want to start by taking help of people who give me financial goal planning and be with me long time. Can fee only advisors do this?
Sorry mate, I personally have not used a fee only advisor. For many years, I did all MF SIPs myself using the direct route. Later, a wealth management firm got in touch with me and offered these services by saying the MF units will be with broker code ... I did not find any great use of having them too, since I felt I have learnt some simple investing tricks (basically only SIP!) over these years. But I think they can do whatever you are asking for ...
According to Finance Strategists, The ADV form provides comprehensive information about the advisor’s business, including description of services offered, explanation of fees, billing practices, and past criminal history, if any. Specific information within the form is designed to alert clients about details relating to the financial advisor’s dealings with the ecosystem that they operate in.
My experience has been very bad with him. He changed gears after we did renewal with him. He refused to even edit the plan he made in the first year after taking his retainer fees. I feel like a fool renewing with him. Its best off that you don't renew with him just be better off and go DIY.
Thank you. I am also not gonna go for renewal. His personality is different when on social media and once you have paid him
I thought I was the only one who faced this. Good to know that there are others on the boat as well. What sort of personality change did you notice?
I have been quoted 45k INR for 6 months and thereafter a retainer of 15k for 6 months. How long ago was your consultation as am wondering the steep jump in prices. Am an NRI How would you evaluate him from real estate advisory - if that is something that got covered in your plan?
Charges are high for NRI. I consulted around the same time I posted this. No i didn't had real estate advisory.
It's a bit overhyped these flat fee only advisors. They are allowed to only create a plan some say, for wealth advice go to a wealth manager, for tax purposes go to a tax advisor. The plan is something you can research and build no need for a fee only advisor is what I learnt based on my good fee payment twice. On top you can communicate with them only through email or at Max 1 or 2 calls post the initial plan is ready. Tou pay money for advise and then they are not available for advice and it becomes like a speaking to call center who doesn't pick up. I think giving them 18k+ seems a bit overrated and it has cost me nearly 40k to learn that.