Many people think that the role of an IFA is to select schemes for the client and then go off into hybernation. I met a bunch of high end IFAs and realized that they do the following things which websites and FB groups cannot do for them!!

These high end IFAs (the smallest had a 3 digit crores Aum) were telling me the things that they do…enumerating what I remember:

1. Holding hand when the markets are volatile.

2. Telling them the advantages of certain portfolios vis-a-vis other types of portfolios.

3. Explaining how nominations work – Google has so much info that a common investor does not know where to start

4. Explaining how the asset allocation works – even between Large cap, Mid cap, etc.

5. Bringing in the discipline to keep the SIP and increase it on an annual basis.

6. Stopping the client from buying nonsensical products thrown at them by the bank RM

7. Explaining the qualitative factors in fund house and therefore fund selection.

8. Explaining nuances of life insurance and mutual funds

9. Helping with mandate change, folio aggregation, transmission…and finding out how difficult it is for the retail investor to deal with fund houses.

10. Hand hold during asset transitions – like selling funds to buy a house. Or investing lumpsums amounts when their parents retire, sell a house etc. Having moral and physical support very critical.

11. Help talk money across 3 generations – something which the client finds difficult.

12. Explaining asset allocation, compounding, tactical asset allocation – at the time of application

13. Goal amount calculation with the help of commercially available calculators

14. Helping people navigate through a lot of noise available on the web

 

…actually there are about 20 more…but my memory is slipping!

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  1. finding out the right ifa is tricky.I ended up with one Junk who try to up one guy who sells high commision the product. If we have the time and inclination we can learn and try to do all these!

    DIY!

  2. Subra – These are great info – thanks for sharing.
    What about estate planning? I am assuming these IFAs have focused conversations on that topic as well?
    Also, while they talk cross-generation, do they work closely with the client’s accountant and lawyer as well?

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