There are a few words which when a financial planner says looks cool. If my planner said them to me, I would look for a new planner! What are the words?

1. I will give clear, and UNBIASED advice! After 30 years in the trenches of the financial services industry I have not been able to see anybody being able to give ‘unbiased advice’. for e.g. believes in equities, the head of a mutual fund believes that all problems in life can be got from mutual funds, life insurance companies believe all problems can be solved by life insurance. Bankers of course believe that what is good for the bank is good for the customer.

my take: ONLY you can think clearly for yourself. Learn. Think. Meditate. Do.

2. Look at the historic return: Planners who tell you ‘look at the equity return over the past 30 years…so invest in equities’ are saying history repeats itself every 30 years. Sorry, not true. Equity markets vs Debt market returns in India have been sensationally good from 1979 to 2012.

My take: Forget getting returns 3X of debt returns, it will NOT happen. 1.5X of debt is possible, a real return is perfectly possible, but you will have do some indexing, some cherry picking, some stock timing…life will not be easy. Quoting historic returns without quoting historic risks, inflation, demographics, is akin to cheating.

3. I will give you a clearly worded full disclosure of what I will do with you and your money: This just cannot be done. Either the guy is brilliant in drafting (then he might as well be a well paid lawyer) or a fumbling drafter.

my take: a brilliant chance he is the later. So he will create documents which will confuse you. However you are too well educated to admit to him the fact that you did not understand. GRRRRRR…..aaaggghhhh.

4. All the products that I sell or recommend are regulated by sebi / irda and so APPROVED by them.

My take: Australia and Bangladesh are both recognised by ICC, so they are both equal. Take the hint. The regulator ONLY says ‘this company is eligible to do business, these guys have passed the exam, ……’ if you think the system is there to protect you, ask the victims of Gujarat and Delhi massacre. The system normally protects the big and mighty. They made the rules, right?

5. I will put YOUR INTEREST before MINE.

My take: Frankly, can he? and why…..should he? Life is a compromise guys, learn, chill but relax.

sorry, had to do this post….it was long overdue….:-)

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  1. brilliant post Subra sir. As a bank Manager I tell the clients similar things – I hope not too many of them read your post. In my earlier job there was a client who introduced me to your blog…I am thankful to him. This year when I went to our college for an alumni meet I recommeneded it to my juniors, I hope they are reading too!! thanks

  2. nice post SIR. can you pl give your views on SWING STP introduced by HDFC. somebone has said “This Process is SUPERIOR as it does not INVOLVE HUMAN EMOTIONS for DECIDING about INVESTING & PROFIT BOOKING”..regards

  3. absolutely SPOT ON sir..I think this FP thing is the current fad, flavor of the season. I am an insurance agent/mutual fund distributor, and currently doing CFP, only to enhance my sales 😉

  4. Brilliant. This ruthless adherence to truth/facts and even admitting your own bias is coolest and prods others to think for oneself and reach own decisions.

  5. Thanks but disagree on most of the points.

    and Mr. Subra- as regards point no. 5, please read “Go-giver” its an excellent book…can really open anyone up to “giving”:)

    your posts are really hard hitting..road to establish a career in fee-based unbiased advice is tough but not impossible…your such posts keep new planners focussed and motivated:)

  6. Have read ‘Go-giver’, have not seen it happen in the financial service industry or in the health industry except at super top levels. No, not yet seen a pure financial planner. Most, if not all sell some product or the other. Not sure if you have heard of BNI – they say ‘Givers-Gain’ but again the giving and the gaining are methodically enumerated. Alas, that is losing the soul.

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