Today all websites tell you that you are just not competent to manage your own money. This is followed by a corollary saying ‘therefore you NEED a financial planner’.

Be that as it may, assuming you have a financial planner, what are the questions that you should be ASKING him….and then hope that he answers them straight.

1. Why are you in this business / profession: Does he say ‘just like that’ or does he say ‘I did not get any other job’ or is he there because he wants to help people go towards their life goals…?

2. What is your qualification to do this business: learn a little about the various qualifications…please remember most of the titles are self taken! CA, MBA, CFP, ….are relevant.

Caveat: I know planners WITHOUT these 3 qualifications and who do a good job.I also know people with some of these qualifications who do a bad job.

3. What other professional training / courses have you done?

4. How many years experience do you have? – it is not to say that longer the better, but you really do not want to go to a guy with no experience, right?

5. How do you stay current on the Income tax laws, and other laws that keep changing regularly?

6. How much is your understanding of equity markets, debt markets, mutual funds, and insurance?

7. How are you going to be compensated for all this effort that you are taking? Will I pay you a fee or will you sell me products and earn a commission from that? Or is it a combination of the 2?

8. How will you decide on my asset allocation pattern and what will you do if I get a lump sum?

9. How will you help me keep track of my investments and how often will you suggest changes? And what will be the trigger to make the changes, if any?

 

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  1. Another question might be to ask for references from existing clients…if it doesnt violate any confidentiality or legal agreements. Testimonials are always good:)

  2. Are you fee-only planner or a fee-based planner?

    Fee-only: remuneration from clients only.
    Fee-based: from clients, from MF commissions, insurers etc.

    Easy to judge who is better.

    The financial planning community is very silent about this distinction. I see people call themselves CFPs and LIC agents!

    Also CFP planning fees varies from 5000 to 20000. CFPs talk about value they offer and hence higher fees. I dont see how a layman or anyone else for that matter can discern value in a couple of meetings.

  3. still difficult pattu. In such cases you pay the planner and the fund manager anyway.

    it is like which hotel is cheap and best? you want nutritious food, you need to learn cooking.

    still to come across a good fp – not that they do not exist, it is just that I find it difficult to find them..

  4. Subra few questions

    People do CFP who are already in job, earning well. Students who are doing it get good jobs

    People are doing cfp at the age of 25. nay practical knowledge. NO. So what to do. Everybody says consult a financial planner. Is there any awareness? no. Banks,insurance companies,MFs supporting to spread awareness no.

    How does it make a difference if i have done professional courses if i do not have practical knowledge

    Same about experience- people re doing excel and ppt in corporate job so how does experience matter

    I will ask income tax laws if i know about it. what if i do not know

    Is there any need of equity market. Do financial planners suggest anything in equity

    I am being compensated for both.what if i am selling endowment or money back policies

    o man. how will a investor come to know. Its only after 5-10 years he knows i am screwed

    I acn not tell u every month. this is a long term investment. So pls do not ask me before an year.

    Give me the solution. I already know the problems

  5. Subra few questions

    People do CFP who are already in job, earning well. Students who are doing it get good jobs

    People are doing cfp at the age of 25. nay practical knowledge. NO. So what to do. Everybody says consult a financial planner. Is there any awareness? no. Banks,insurance companies,MFs supporting to spread awareness no.

    How does it make a difference if i have done professional courses if i do not have practical knowledge

    Same about experience- people re doing excel and ppt in corporate job so how does experience matter

    I will ask income tax laws if i know about it. what if i do not know

    Is there any need of equity market. Do financial planners suggest anything in equity

    I am being compensated for both.what if i am selling endowment or money back policies. so what i am screwed again

    ohhhhhhhhh man. how will a investor come to know. Its only after 5-10 years he knows i am screwed

    I can not tell u every month. this is a long term investment. So pls do not ask me before an year.

    Give me the solution. I already know the problems

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