Many people have asked me this question:
Should we invest direct or through an advisor?
Like every economist or a CA I will also start by saying – ‘there is no yes or no’ kind of an answer. It depends on the following:
– were you investing in 1999, 2000, 2008, 2010…..? then you may not need an adviser.
– will you spend at least 3 hours a week reading about mutual funds, economy, company results, personal finance articles or are you busy with your social life, watching television, hobbies, etc – then you may not need an adviser.
– will you invest in LEARNING before you invest your money – then you may not need an adviser.
if your answer to any of these is NO, you should have an adviser.
Your adviser should be able to do all this, help you with the form filling, annual review, asset re allocation based on some time based goals, changing your SIP amounts based on your goals, tell you when and how to change your term insurance policy, advise you regarding nomination, making a will, broad asset allocation and tactical asset allocation, …..
AND you think he can get you about 1% more than what you can get on your own, he deserves to be your adviser.
How much should be his fees?
I have heard a huge range of fees – everything from 20,000 Rs. to Rs. 5,00,000 – and frankly I feel all numbers are justified depending upon the client!
Largely for portfolios upto Rs. 2 crores: go through an adviser allowing him to earn a commission.
Portfolios of Rs. 5 crores and above : go for a fee + direct application….
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