When you get advice from somebody you are hardly in a position to tell whether it is in YOUR interest, right?

Well, here are some tips!

When you go to any professional these days they make their advice sound very ‘professional’ sounding. So what are the signals that you should look for?

1. You go to a dentist with a Rs. 750 budget and he gives you a Rs. 84,000 solution: Sure it is the Merc that he is suggesting, and your whole body is screaming against it, listen to your GUT. Say No. Maybe you need a simple solution, look for one. Looking for 30 year solutions makes no sense when you are 50 years old or for worse looking for 30 year solutions when you 84 years of age. The wood that burns you is not likely to appreciate the quality of the dentistry, right? LISTEN TO YOUR GUT.

2. The advice is from somebody who is NOT bothered about YOUR GOALS: If you get a running coach who is interested in making you run faster, and harder may not be the right coach for you. Face it, if you are an amateur runner and run for fun and your coach wants to showcase you as a ‘show off’ or ‘beta’ client – your goals do not match. Do not listen to him and injure yourself. This is poor advice!

3. The advice is not aligned with your life goals or ultimate vision: If you are a CA and have also done your MBA in finance, maybe you wish to be in equity research. It is possible that you get a sales job and your boss is advising you to do aggressive wrong sales, it is poor advice. This is largely taking a short term view and looking for short term success whereas your long term goals are not in tandem with what you are doing. Avoid such jobs. If you can afford it work for a lesser salary in a job that co-ordinates better with your long term vision!

4. The adviser is wrongly qualified: He is a friend who has experience, but is not qualified. I have seen Electronic engineers, Marine Engineers, CAs, doctors, handling their equity portfolios. Many of them have done a fantastic job of managing their portfolios. However it does not qualify them to give you advice simply because they may not know asset allocation, may not understand risk covers, may have been lucky with a few deals. Be careful – education helps while giving advice – empirical evidence is not enough. Good track record is fine, but not adequate.

5. Your body feels wrong: When you feel somebody has a conflict of interest – a doc selling a particular action, an agent selling a particular product, …..scream and run away from the place. When you know that there is a conflict of interest, run away from there!


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  1. I disagree with point (4). Well, not disagree exactly, but I think it’s very weak. Are you assuming that degrees = qualification? There are people who have degrees but don’t understand the subject. And there are people who don’t have degrees but understand the subject much more than anyone else. So by making the assumption that degree = knowledge, you introducing both Typ1 1 and Type 2 errors. Degrees are one (lousy) way to gauge someone’s knowledge. Track record is another, better in my opinion.

    Would like to know what you think about advice from amateurs (who do something purely for the love of it) vs professionals (who do something because it makes them money). The problem with some professionals is that it’s in their interest for problem to remain unsolved and require their intervention. Kinda like how some doctors prescribe fake treatments so the patient continues to need their help. With amateurs, there is no conflict of interest but at the same time, since their livelihood doesn’t depend on it, one can’t be assured of sincerity. Everything might be a fun experiment to them.

    I think the bottom line is that no one else can have your true interest at their heart. The only person guaranteed to look purely for your interests is yourself. 🙂

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