I meet many IFAs as a part of my profession. It is impossible to find ANY IFA speaking like an IFA. Most of them speak like fund managers. Read on:

  • Sir I moved my clients from Large cap to Midcap and then Midcap is doing very well.
  • Sir, my clients have invested in 3 large cap, 3 midcap and 1 microcap fund – all funds are doing very well
  • Sir some fund houses I do not do equity some fund houses I do not do debt – I feel my calls are better..
  • I do think that the market is over heated…i have suspended their SIP for the past 7 months, I am waiting for the market to fall

Seriously, is this the work of an IFA? Many of them who do this, think that is the raison de etre of their life and they are doing a good job.

Many of my friends, students, clients, relationship managers at banks, business development managers at life insurance companies concentrate on ‘r’ – or the return that they can get on the potential new investment. I really am amused.

Let me tell you why.

None, repeat none, except one brilliant uncle, knows their current income (unless it is all from salary), their dividend income, their investment ROI, …and I could go on and on.

In case you were to drop dead tonight, does your family know what to do, financially speaking?

Sadly for most people I know the answer is no. NO.NO.

Yes it is a capital no, font size 72, bold, underlined and italics – just for effect.

If you want your family to know what to do next, first do the following:

Create a master notebook of all your investment, mostly like a guide to the executor of your estate. Please realize if your wife knows nothing about mutual funds, even words like units, redemption, may sound like Latin. So please explain in brief.

Make a list of people you deal with – your accountant, your lawyer (if any), your mutual fund agent, your life insurance agent etc. and please explain each person’s role. If you have a friend who knows all about your investments, give his name and telephone number specifically explaining where he can help.

If you have invested smartly and know why each investment was made (elsewhere I have called it the investment philosophy statement – not knowing whether to call it philosophy or strategy) – make sure a copy is available to your spouse.

Your IFA should TEACH you why

a) choice of fund does not really matter as long as the fund manager is honest, has longevity and the fund house has a process.

b) your SIP amount is a function of your goal, not the IFAs ability to extract a bigger cheque than what you wanted to give.

c) if you dreams are mega, your sip cannot be mini.

d) asset allocation is difficult, and equity investing is addicting

e) making a will is unpleasant, dying without one is worse

f) proper record keeping will help in Income tax filing being easy, and making a will can be smoother

g) if you cannot tag your investments to your goals, you have a dhobi’s list, not a portfolio




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