Fee based advisor : Will create wealth for you


Fee based Investment counseling is the cure to all problems, so say the Learned Men. They ought to be correct, because all channels are also saying it.

Now I met a ‘Good Intentions’ – we will only do what is good for the client financial planning company. They wanted their ‘planners’ to be able to talk to trustees, fund managers, directors about equity returns, mean, variance, goal setting, …..and generally be seen to be far more competent (significantly more as the MD said) than the general relationship manager in the market. So far so good.

They had very little training budget but they had done a cut paste from a leading course on fund management and had done a good job at that.

They wanted to move the ‘sales’ guy from selling to advising – they had enough ppt to prove to me how this will happen over the next 12-18 months. Voila they said “Our xxxx sales personnel will migrate to becoming an adviser”.

I said: “All nice to say things but in an industry where it is much easier to earn sales commissions why would you be in the fee business?”

He said: After some time we will also sell products like life insurance, P M S,….

I was stunned. Is the ‘Fee-only adviser’ dead or was he not born at all?

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8 Responses to “Fee based advisor : Will create wealth for you”

  1. “Is the ‘Fee-only adviser’ dead or was he not born at all?”. Perhaps it was a still-born 🙂

  2. is there any financial adviser out there who would share your losses as well?. hedgies like the 2/20 loot scheme and seem to be the worst. i can think of only michael burry of the erstwhile scion capital who refused to take any money unless he made atleast the hurdle rate (above the treasury risk free rate)

  3. as a fund manager if I have to share losses, I might as well leverage, at least all the profits and losses will be mine. Clearly there can be a limited partnership (in India done outside the purview of the regulators) or as a PMS. The limited p’ship that I have seen works like this – a p’ship firm (or a pvt ltd co mostly) is formed between 10 ‘owners’ each investing Rs. 50 L. The 5 crore corpus is handled by a fund manager – normally one of the owners. Profits are distributed as tax efficiently as possible. Very, very, very secretive reporting only in electronic form among the owners.

  4. Hi Subra,

    The workshop on 18th and 19th of june is at Delhi or Mumbai.

    If its at Mumbai, I would definitely like to attend your Seminar.


  5. 18-19 is in Delhi, and 21-22 is in Mumbai.

    It is a BUSINESS FINANCE seminar….therefore 2 days. Did not see much of a demand for a One-day Personal Finance seminar. Need at least 14-17 people. Easy to get HR / training departments to spend on training for ‘business finance’ but not willing to spend on ‘Personal Finance’ ….so people choose financial ignorance. I have told them it is expensive…:) but they do not listen.

  6. Hi, Where is this personal finance seminar? In Mumbai?
    Can you plan something for Delhi?

  7. ohhk this is business finance!

  8. Hi ,

    Are you planning to give a seminar in hyderabad.If so , please tell the details.

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