Financial planner: must he be qualified?

I am an anarchist and do not believe that Rules and Regulations are very important. In fact I do think that lawyers, accountants and even doctors exaggerate their educational processes.

Having said that when I meet financial planners who do not understand:

Indian Income tax – especially clubbing, scope of what is Income, the difference between the applicability of tax slab rates vs TDS rates.

Compounding: seriously missing in their ability to understand equity compounding

Equity markets: when they talk of ‘booking’ profits and at the same time can talk of Warren Buffett thanks to some reading somewhere, not knowing the difference between trading rules and investment rules

Asset allocation: across asset classes, geographies, groups,…….etc.

Law: need for pre nup agreement, making of a will

All these topics are, well, a little technical. Not really something that can work from the gut. Sorry, but the so called financial planning course does NOTHING to tell you that a planner is NOT a fund manager. That is scary.

So if there are half baked people who are advising on all these things that is stupid. Worse people not knowing whom what questions to ask.

If you want a will – and it has some complications – for example a parent wanting to leave a house for the usage of one child (or sibling) for say 20 years and then the sale proceeds to be split among ALL the children – YOU NEED A LAWYER OR A CA dammit not a half baked guy who can write some generalities and obfuscate.

Be careful. I keep saying you can do FINANCIAL PLANNING yourself, but to think through the process, creating the document, understanding global taxation (if you are a NRI can you claim the TDS of your Indian bank fixed deposit?) or whether the income when you were a shippie – how will the clubbing rules apply, or should a will be registered, or whether a nomination can be challenged, or why a co-operative society insists on a probate…………..are answers to be given by experts, not by cut copy paste artists. Sorry.

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One Response to “Financial planner: must he be qualified?”

  1. more than agree Subra sir! In one website I saw the owner of the website say ‘Indian income is taxed in India but US income is taxed only in US……dangerous and stupid!!

    One FP had said ‘Your child’s income is added to your wife’s income because HER INCOME IS LESS!

    long list

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