investment advisor

Investment Advice – “I don’t need it”

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investment advisor, investment advice

Remember: Never ask a barber if you need a hair cut.

3 views on Investment Advice

View #1 – It’s worth nothing.

I can invest my own time and effort to make my own investment choices. I understand what I am after. I have the plan in my mind. I have the discipline to follow it through. I might make a few mistakes now and then but better to fall an learn by oneself than burn fingers based on someone else’s advice. I don’t need investment advice.

View #2 – It’s worth something.

I believe an advisor by the virtue of his specialisation, possesses more understanding and knowledge of the subject than I do. It is good to access and benefit from the same to compliment my own effort to build a solid investment portfolio. Plus the advisor helps me keep a control on my urges to act strange or invest in “fancy” products. I want this investment advice.  

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Dhan ki baat #2 – Banker at the gates

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BANKER AT THE GATES

Welcome to the second edition of Dhan Ki Baat. In the previous edition, I had written about ‘making money even when you are sleeping’.

It is a very tantalising idea and in times to come, we will explore it further.

In this second edition, I want to cover the other side and that is – ‘losing money even when you are sleeping‘.

Sounds scary. It actually is. Protecting your money from undue influence is equally important.

There are several entities out there to rob you of your money in a very sophisticated, legal way.

You deal with them on a day to day basis and in some cases trust them blindly.

The one at the forefront of this robbing act is your bank. Once you enter in bank’s official records, it is hard to come out and it is even harder to resist their advances.

It reminds of the famous Eagles song – Hotel California.

The famous line from the song –  “You can check-in any time of the year, but you can never leave.”

The song is one of my favourites but for different reasons.

Now, let me recount a brief story to you.  

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Here’s what SEBI wants you to know and tell about Investment Advisers

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Investment Advisers

SEBI has been working for you, the investor, and how

SEBI has been pushing the pedal on protecting your, the investor’s, interest. It has taken several steps to eliminate conflict of interest between your adviser/distributor and you. This is specially true for mutual funds.

As a first step, in 2009, it banned upfront commissions on sale of mutual fund products.

Then in 2013, on its behest, mutual funds introduced direct plans of all their mutual fund schemes. In my view, this was the best thing to happen. Direct Plans means no commissions paid out to anyone and all the resultant savings adding up to an investors returns.

In contrast, regular plans are sold by distributors where they receive regular commissions as a % of the marked value of your investments.  

Further, in the same year, that is 2013, SEBI also introduced the Investment Advisers (IA) Regulations 2013.

Simply put, any advisor who is offering one to one investment advice to investors related to securities, etc. must register as an Investment Adviser.

As per SEBI Investment Adviser regulations, “investment advice” means advice relating to investing in, purchasing, selling or otherwise dealing in securities or investment products, and advice on investment portfolio containing securities or investment products, whether written, oral or though any other means of communication for the benefit of the client and shall include financial planning.

Did you know this?

Here are some more facts about Investment Advisers

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Who should be your investment advisor?

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investment advisor

So, who should be your investment advisor? The mutual fund distributor, the insurance agent, the bank RM or your uncle? Let me try and get around this question by looking at the other side. But first, a story from my personal experience. The story of the Bank Relationship Manager A few years ago, I was … Read more