There is too much venom these days against the IFA. Not that I have not ripped them apart in my blog, but he/she has a very important role to play. I will try to say some of the things that an IFA can/ should do for the client. Whether they are equipped to, is a book in itself. Given the remuneration and other opportunities available I would not advise anybody to become an IFA.

– he (includes she) should be able to keep the client be in control of his investments

– make sure that he and the client understand every part of the portfolio – why, how to redeem, when to review, basis of change, etc. GET THE CLIENT to articulate, write and save it. His spouse too should know the details.

– avoid the inherent traps in the Financial Advisory business.

– communicate in such a way that the client understands the importance of record keeping, calculations, writing down things, communicating with other family members…etc.

– ensure that the client is not impacted by the extremely stupid short-termism in the media and mutual fund managers talks

– understand (and convey to clients) that wealth does not get built overnight. It takes decades, even generations to build up real big good wealth. If you get a good ‘r’ for a few years, YOU are lucky – actually it is the ‘n’ in the compounding formula that is important.

– explain the risks of PPF, NPS, NSc, bank fixed deposits, etc.

– explain concepts like growth option, tax deferral etc.

– explain index funds, star fund managers, temper expectations, past returns, etc.

eeks! there is a long list, dammit.

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  1. creed of the successful IFA


    Maximize my personal income. I will take all I can get as quickly as I can. (My business may not last)

    found on internet

  2. in my experience the biggest job of an advisor is to stop the client from making bad decisions, good decisions may or may not give great results but they will let you sleep at night.

    I don’t know why people own 90% networth in RE but worry about the 10% that is in equity funds more !

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