Did you have the current financial adviser in 2007?

and you stuck with him for the past 8 years? It means he has done a good job.

Sadly people think the job of a financial adviser is to be an encyclopedia of all the funds in the market and that he /she should be able to answer questions like:

How is the DSP Blackrock Micro cap fund? should I do a Rs. 3000 sip?

I have nothing against such a question, but I know many excellent financial advisers who will just not be able to answer this question.

When you are looking for an adviser with a longish track record ask him what did he do in 2007? or 2008? Did he panic? I would be very happy if he said yes. I was a busy trainer and I saw the panic on the faces of most of the RELATIONSHIP managers whom I was training. Nothing wrong. The question is what did they do about it?

Did he cut and chop your portfolio? Did he ask you to stay the course? Did he increase / decrease / stop your SIPs? Did he withdraw your money in 2008?

Did he have the guts to tell you it could take another 10 years for the market to reach 21000 on the Sensex?

Was he emotionally stable and tell you ‘since you do not need the money till 2015 and beyond’ you should stay invested?

Did he say “how can you trust equity markets, you might as well sell your equity and pay off your home loans” ?

If he was not your adviser ask him for references from people who were his clients in 2008. See what they have to say. Some small time tinkering or dramatic changes? Were they just to please you or was it just to keep some other fund houses happy? Can you now revisit and see what would have happened if you had not made the change?

Did he ever say “I do not know” – the 4 most powerful words in any high level advisory engagement?

Did he say “do not worry the market will bounce back soon continue your SIP”

Did he say “your goals are far away, these fund managers are good, and they will ensure that your funds are well managed”?

Did he show you examples of ¬†fund managers panicking? Lets face it, it was a tough time for all of us – as investors, advisers, fund managers, bankers….so the question is ‘did you come out of it unscathed, not worried and sure that your goals will be met?’

if the answer to the last question is YES, you are in safe hands.

Your adviser’s EQ is high, IQ does not matter and his consulting skills are better than his sales skills.

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