A good advisor is a rare animal. And obviously very difficult to find. So you should ask him the following questions:

1. When was your last vacation?

If he says he went to….(destination does not matter)ask him who paid for it. If he mentions a fund house or an insurance company, he is not an advisor, he is a salesman.

2. Are you in the Gold, Silver, Platinum or a Higher Club in any fund house?

The Higher the club to which he belongs, the greater the chance that he is a salesman.

3. If I were to pay you a fee, would you just do the planning for me? How much will you charge?

Based on whatever yardstick you have to decide whether it is worth hiring him. I have seen planners charging Rs. 2500 for a plan. I have also seen planners charging Rs. 25,000 for a plan. It is your call.

4. May I speak to 3 clients of yours, GIVE ME THE LIST IN 3 SECONDS FLAT.

This is normally a good test. However in India surnames can be deceptive. A Subramanyam can be younger brother of a Gopalan and a cousin of a Subramaniam – be careful of how you pick the list. Tell the planner I will talk to them 3 times each over the next one year….this reduces chances of fibbing.

More will follow….

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  1. Sorry, disagree with #4. Client list in this industry should be sacred. If I was a planner, I would not share my client list, no matter it ends is costing me a potential client. Is it OK to ask a planner the typical type of clients he/she services (by net worth, income range, other attributes), but asking for client names seems unfair. In fact, as a client, I would request/demand that my name not be shared with any other parties…

  2. If a fin planner does not let me talk to his clients, how do i even know whether it is worth talking to him? One fp i met was so poorly informed about even the basics I ran out! And he expected Rs. 30k for a generic solution and was happily selling a ulip to me. Luckily I got out in 20 minutes. He sent me a bill for the aborted meeting, I tore it

  3. Dr Mohammed Ali Khan

    I am an anesthetist and I observe many surgeons performing surgery.. But if I do not know anything about surgery I would not know whether he or she was good or bad..
    The answer to selecting a good professional is knowledge.. One should have some knowledge about the subject in concern to first know if the professional is good or bad.. Or, get good references.. There is no other way to judge the quality and integrity of any professional.
    Its the same with a financial advisers.. We have to be financially literate to judge whether a financial advisor is good, and if he or she is worth the money charged for the services

  4. Interesting, In India we have a unwritten rule that you dont ask too much questions esp if they involve money !!, financial advisors are no exception they promise heaven and usually deliver hell. Consumer activism is almost nil in this industry, investors money is lost on frictional costs.btw i wonder why no one talks about stock brokers, collectively i think they have destroyed more wealth than the great depression, and the current recession combined. So even today the adage is ” A fool and his money are parted in the least possible time “

  5. My financial advisor talks to me 3-4 times a year, he has put my portfolio on an autopilot mode. He expects me to put it in a website and look at it myself. However, I think his value add is in making stay the course. When the index comes down he tells me “You should be happy, stop expecting 40% yoy every year for 30 years – now the market is telling what I was telling u for so many years”. Frankly the relship is in the value add like ‘should i insure my kid’, or when i ask him ‘will a 15% bonus across my team work’ or ‘how much should i pay my head of sales’…all this experience is useful. Frankly I need managerial inputs, not clerical.

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