Avoid These 7 Mistakes While Dealing With Your Financial Adviser
Financial Planning

Avoid These 7 Mistakes While Dealing With Your Financial Adviser

Good advisers are better used for creating financial plans and may not be the right fit of you if you only want to use them for picking stocks.

Finding a good financial advisor is always a big challenge. But once you find that advisor, keeping that trusted adviser, who is like your personal Chief Financial Officer (CFO), requires you to take seven vows, much like the saat phere one takes at his/her wedding!

Just like how one goes to the same doctor or even to the same hairstylist, one needs to stick with the same dependable financial adviser, simply to ensure that their money is well taken care of.

But there are certain behavioral traits that could affect your relationship with your financial adviser. 

1. Not disclosing all information

You should disclose all relevant information to your advisor to allow him or her to provide proper assistance.

Further, clients tend to split their investments among many advisers but expect the right advice. This is unreasonable considering the adviser does not have the full data required to do so. Clients have a tendency to pit one advisor against the other which finally does not work in their favour.

2. Not allowing them to devise financial plans

You should not deal with an adviser just on a transactional basis rather engage them for goal planning. Good advisers are better used for creating financial plans and may not be the right fit of you if you only want to use them for picking stocks.

3. Chiding adviser for every drop in portfolio 

Avoid getting perturbed by daily volatility/events and question the adviser on why he/she did not see it coming. An adviser can only guide you on your investments but cannot be blamed for markets falling.

4. Following advice of media/friend

You should avoid investing based on financial media or what a friend/colleague has invested in. Follow investment gurus on social media but remember their risk profile and goals differ from yours.

Just because you have an MBA finance or Chartered Accountant in the family, don’t allow them to tell the adviser what to do. They have not managed money earlier and may not understand the nuances of doing so.

5. Old is not always boring, new is not always sexy

It is not prudent to invest in something new each time instead of sticking to the allocations decided. Old is boring, new is sexy applies to fashion, not to investments. Most new investments are old wine in new bottle.

6. Running after exotic products

Avoid putting down the adviser for recommending simple, boring products. So many financial advisers have mentioned how frustrated they feel when clients put them down for advising simple mutual funds instead of exotic products. And how they are judged to be poor advisors just because they don’t advise investment into current favoured investments like angel investments in startups.

7. Not paying for advice

Do not appreciate paying fee to advisers. It is well known that Asians hate paying fees for financial advice, while they are willing to pay for every other service for their betterment.

Clients are willing to pay an interior decorator, fashion designer, wedding planner, personal trainer etc. but when it comes to managing money, clients always crib about the fees and are known to switch advisors for a small difference in fees or even manage money themselves.

Further, do not squeeze the adviser to extract extra services – you don’t do this to your personal trainer, don’t do it to your money trainer.

While an adviser’s recommendations will have a direct impact on your wealth, they also sell you something intangible – value. The value of being a lifelong companion in your wealth creation journey.

Courtesy: – Money Control date:-5 Dec 2018(Mrin Agarwal) 

We help you in creating a goal and achieving the same. We are there to support you at each and every stage of your financial life right from cash flow system to create Will. We would like to remind you that we are the only practicing financial planners in Rajkot. Contact:-mega@megafina.in

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