In the past 10 days 2-3 people have asked me for feedback about 3 financial planners. I do not know the people asking the questions, nor do I know the planners. Obviously I know the names, but I will not name them. I politely said ‘I as a professional will not comment on the work of another professional’….Obviously the answer was because I am not a professional or a qualified planner. I do some adhoc planning but do not do it as scientifically as I THINK some people do it.

What got the client’s goat was the following suggestion made by the planner:

a) Invest in a MIP (short term) for 2 years to meet your short term goal.

b) buy a ULIP pension plan for your DAD (Dad is 53 years old) at a premium of Rs. 2Lp.a.

c) buy a ULIP for yourself (for 30 years) premium of Rs. 1 L p.a

d) take a Home loan of Rs. 40L for buying a Rs. 50L house

….the reader felt that the ‘planner’ was behaving like a distributor. The worst thing was the reader is a brilliant guy – a techie who reads voraciously about finance. He felt that he should be putting his money in a large cap equity fund, building up a corpus for 3-4 years and then buying a house.

His father’s portfolio he wanted it in a balanced fund (like Prudence – and I said Prudence behaves like an equity fund, and less like a balanced fund) and not in a pension plan.

He felt that any planner who does not suggest a term plan is a #@$%^&….and I did not know what to say.

Frankly to me NONE of these suggestions are worth screaming about. Taken in isolation it may look good or bad, but in the overall plan I still do not know how it looks. I DID NOT ASK FOR ANY DETAILS because I was not planning to comment – frankly it is none of my business.

So still I do not know good plan or bad plan?

ps: needless to say the planner was an agent for all these

 

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  1. Subra,
    Since this section *IS* for comments, I’ll take the burden of commenting!
    I agree with your reader…this *planner* is a complete @$$#013
    I had a similar experience recently. I asked my bank RM for financial planning advice, even saying that I’m willing to pay for it. I was assured that no payment for me since I was having a large balance with the bank.
    Well, we sat in the RMs office and went through a software. I would say it was a good software. It essentially asked you for your goals and asked you to give an approximate value for each as of today. Then it extrapolated it out in time based on when you required each goal with an earnings rate and an inflation rate to compute required contribution over the time period.
    After all the exercise, what action plan do I get?
    Sir, to meet all these goals, just invest 5L pa in this ULIP scheme. One plan is sufficient and all you need is this plan. It is soooo flexible, you can do anything with it.
    And after that, the follow up was always about, only that product and when I’m giving the cheque!

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