THINGS TO KEEP IN MIND BEFORE HIRING A MUTUAL FUND ADVISOR

As the mutual fund industry is growing at a very fast pace, many new investors are entering and committing investments to meet their long-term goals. It is not possible for every individual to track their investments. Therefore, it makes sense to choose appropriate mutual fund advisory services which can help you manage your investments.

Reasons to hire an advisor

• Most of the people don’t have sufficient time or interest to research about managing their investments. Enlisting the expertise of a financial professional could be a good option, as they will save your time by doing the research and advice you the best way to invest your money.
• Financial advisors invest years in acquiring knowledge and expertise in finance and investments. Therefore, a good advisor and his/her team can look at your overall asset allocation, evaluate your current investments and advice you the right strategy to invest in order to get maximum benefits in the future.
• Financial plans are not a one and done project; they change with your priorities and your goal. You may have big financial decisions to make, such as buying house, child education, marriage, retirement or medical emergencies. Your financial planner will be there to walk through these options with you. S/he will guide and prepare you well in advance for each scenario and make an informed decision that aligns with your goal.

Therefore, it is important to find a trustworthy advisor who has your best interest in mind. But, before looking for a mutual fund advisor online or otherwise, there are certain things that you should keep in mind:

Qualifications and the experience of the advisor

Investing in mutual funds to help you meet your long term goals is something crucial and making mistakes or going wrong in the same can be very costly. Therefore, it is wise to engage with a good advisor. But before engaging with one, check for his qualification and experience and make sure the advisor have good knowledge of different asset class such as equity, fixed income, and gold. The advisor and their team should be in a position to decipher and understand how domestic and international events can affect these asset classes. This is essential because the advisor is supposed to advise and identify you on products that will meet your life stage requirements when they are needed.

Past track record

Although there is no formal rating or ranking system for mutual fund distributors in India, it is sensible to look for references before getting associated with an advisor. The best ways are – to ask around for referrals, use social media websites to understand the products recommended by them in the past. This will give you an idea about the strengths and abilities of the advisor. Also, look for how long the advisor has been in the business.

Is s/he easily accessible?

Since there is no limit on the number of clients an advisor can engage with, a common complaint investors usually have is that the advisor does not call back or respond quickly to their messages. Therefore, it is of very important for you to entrust your money to a person who is accessible. The advisor or his/her team should be able to answer your queries in a reasonable period of time and should be accessible by whatever means of communication you choose, it can either be a telephonic conversation, emails or meetings.

Do they offer comprehensive services?

There are so many investors who don’t want to discuss their finances and investments with strangers. Hence, they want an advisor who can handle their investments with confidentiality. So, choose an advisor who’s unbiased and can offer you mutual fund products from all the fund houses and not just one or two funds.

How is the advisor compensated?

A good advisor needs to be well compensated. Some of them use the distribution model, while others simply ask for a fee for their services depending upon the time they have to spend with you, the level of advice you need or any other personalized requirement. There are many mutual fund advisors in Delhi NCR who actually help you to make a financial plan by gathering data from you; it could either be free or there are some seasoned financial planners who charge a nominal fee for the same.