You have found a new adviser and you hope to build a great relationship. You are meeting him…maybe for the nth time and what are the words that you just do not want to hear:
1. Your risk tolerance is high: Hey dude, I am myself not sure how I will react to a 35%fall in my portfolio.
2. This time it is different.
3. The Midcap out performance is here to stay.
5. I can create a direct equity portfolio that will EASILY out perform Hdfc Top 200 and I Pru Discovery.
6. We will use some strategies which are normally used by Hedge funds.
7. We can EASILY ‘future-proof’ your portfolio.
8. We can predict that the interest rates will go DOWN in the near future, but over the next year it might actually go up.
9. We have some non traditional investments that I want you to consider.
10. These are portfolio houses, managers, and strategies that me and my team has carefully selected and hand picked for YOU.
11. Seeing your risk profile, we will target smooth equity returns.
12. Out performing the Sensex is easy – all our fund managers are regularly doing that, AND will continue to do so.
A dirty dozen is good no?
There is a major problem with the BFSI. Most of its players are here trying to impress the clients who want to invest. THAT is the problem. Face it, most clients want a decent REAL RETURN that will help them achieve their goals. I have not met any investor who came to “be impressed” by me. They could not care a damn about me UNLESS they were convinced of the following:
1. I will talk in a language that they can understand (I am in a minority, I know!!)
2. I will keep it simple.
3. I will repeat it more if you have not understood.
4. You do not need sexy, un-understandable products which give you sub-par returns
5. You honestly do not need weekly monitoring and monthly fund switches. Seriously you need only if we are nearing an event.
6. The best way to meet small goals is from current income. For example if you can pay his Engineering fees from your current income, do not disturb your portfolio.
7. You have led a simple life, you are continuing to lead one. Your ‘financial plan’ has to be a one sheet plan which your daughter in class 6 can understand.
Sadly there is a vested interest in selling complicated, capital protected, future proofed investments, with hedging strategies and smooth equity returns.
When you hear those words, do either of the following:
1. Ask him/ her to turn around and give a nice kick – choose which ever part of the anatomy
2. Turn around and sprint. A good 500 metres
Either way the relationship would be over.
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