It’s all about investing your hard earned money and we cannot do experiments with it so it’s always advisable to invest based on an advisors advice.
Sameer & I recently met at a get together of my class buddies. Since we met after ages, we had long drawn conversations around careers, family, life goals, travelling along with apple juice in hand (don’t get surprized as I don’t drink) & dinner.
In the midst of all of this we somehow happened to discuss about investments. I did mention to him that I was particular and disciplined as far as my investments are concerned and always believed in doing it through an advisor. Sameer said, “I do my own research and do the investments whenever I feel like!” I couldn’t stop myself but busted out laughing and commenting “Does your Google baba have a solution for every problem?” Both of us had a great laugh but we ended up discussing, why this approach is not the perfect one.
Most of us, in the world of internet, want to adopt the do it myself approach. The reasons may vary from saving the meagre fees that the advisors charge to adding value to our knowledge base. Some of us also get that kick if our investments give us good returns in the short term.
info. One may get confused and end up making a wrong decision.
But one thing I would like to suggest that don’t supress your own creativity. Do search online and cross check the advisor’s advice and ask him questions based on knowledge acquired by you in this way. This approach of yours shall always make the advisor cautious and chances of cheating or making you fool comes down, in case the advisor sometime wants to do that.
However, asking the right questions is very important before you zero in on any one advisor!
• What is the methodology that they follow before choosing an investment product? Every advisor or firm follows a different approach. We may not get into the technicalities or financial ratios however, as an investor we need to know the basic philosophy that they follow like short term or long term, goal based investing or return based, do they look at the fund house or the fund manager or the investment process?
• How frequently do they review your portfolio and discuss the same with you? It is important for you to track it periodically and take appropriate actions. We need not invest once and forget it for eternity.
• If the advisor comes from a company or a bank, how does the institution continue to work if the employee leaves the company?
• What are the services offered by the advisor or the bank or the company/firm?
Lastly a must question to be asked to your agent or advisor, as to how will you help my family get access to the investment proceeds if an eventuality happens tomorrow. Is there any service to be subscribed so that family need not to run around to get ownership of all the investments and policies.The author is CEO & Co Founder of FinPeace Technologies