I do financial planning at a more philosophical level than most other planners. I largely look at my ‘job’ of helping people help themselves. This of course is NOT a good business idea, and does not make any sensible money, but so be it.
Recently a reader turned friend had asked me to review his financial plan. I did it for a fee, and was scathing. I was convinced that this planner need a planner if he had done to his portfolio what he had done to Mr. S’s portfolio. No names please, this is not a place to embarrass people.
Let me enumerate a few of the bloomers:
1. He had PERSONALLY sold some expensive, poorly managed unit linked plans: To me this is a no-no. If you are a planner say you are a planner, if you are a salesman, say you are a salesman. A white coat and stethescope wearing pharma salesman is a fraud. Be that as it may, the plans were expensive (high load, high admin charges) and it was being managed very poorly. He could see the charges, but he could not have seen the poor management, I agree. He could have seen the poor fund management and taken corrective action. He did not, I guess it was CONFLICT of Interest.
2. He had chosen an annual premium for the ulip. To collect the money for ulip he had done a SIP in an equity fund….and he would withdraw the premium amount on the premium due date. This is clear stupidity. Nothing less. As the ITO was not seeing the returns, the short term capital gain/ loss was not even being calculated. The planner said ‘No way how the ITO will know’. The whole strategy (if this can be called one) sucks. Also the funds chosen for SIP were equity funds…but the ULIP itself was MOSTLY in debt (80%). I told the client such actions are not even worth spitting on.
Not sure how many such financial planners are going around offering their services!
Reminded me of a gathering of about 45 doctors at an entertainment program. Out of this group about 40 were obese or surely over weight. About 30 of them were drinking – whiskey, rum, gin and some beer too. Almost all of them were munching on the chips, samosas, etc.
If my doctor does not look after his body, eats junk food, is personally overweight, ….I will find it difficult to listen to him.
And I think the same holds for financial planners too. If your planner is not going to a planner to have his finances planned, ASK him why should YOU as a client go to him?
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