How Financial Guardians Can Boost Investors’ Confidence

Trends have changed.

Today, when you walk in to a branded clothing store, it is not a ‘Sales Executive’, but a ‘Fashion Consultant’ who assists you. Their job is to help you make the best choice of garments. They make you feel good showering you with compliments, but at the end, the objective is sales of course.

In the investment advisory space too, things have changed over the years –and sincere thanks to SEBI for regulatory changes enforced in the interest of investors. Many mutual fund distributors have turned into investment advisors or financial planners.

Similarly, at banks there is far more sophistication with the way third party financial products (viz. mutual funds, insurance, etc.) are offered. Yet, when you deal with relationship managers or wealth managers at banks, you ought to be careful, and assess if the financial product(s) being offered suit your risk profile, investment horizon, investment objective, and financial goals.

You have to be a responsible investor, while these new breed of professionals supposedly pervade a sense of trust. Don’t be smitten by the glib talk that can do more harm than good. Unfortunately, not all may suggest products in your best interest. There could be a conflict of interest. Commissions earned from financial products may be their primary focus.

In the financial world, there are many certifications and compliance rules set by regulators and industry bodies. Despite this, many financial advisors have resorted to dubious practices while advising on personal finance.

The trust of investors is breached repeatedly & not to mention the financial loss and emotional duressthat has come along, leaving a sense of betrayal amongst investors.

Certain financial advisors have lured theirclientswith false promises. They didn’t care for the dreams, financial goals, and the objective of wealth creation of the people. You need to clearly avoid such advisors.

Genuine financial advice is far different from what is currently being sold in the market. You need to find for yourself a ‘Certified Financial Guardian’ (CFG) who stands as a symbol of Trust and Respect.

Trust is the foundation bed of any relationship and it needs to be earned by doing things with integrity and a prudent, unbiased approach. If an investment advisor can do that, investors’ confidence is boosted.

However, with the scores of advisors all around, it becomes an uphill task to pick the best financial planner or best investment advisor. But, not anymore …

PersonalFN can help you find Certified Financial Guardians, who are committed to serve investors in the interest of their long-term financial wellbeing & serving their clients with ethics and integrity; which effectively helps in building a long-lasting, trustworthy ‘investor-guardian & relationship.

Here is how a financial guardian can boost your confidence as an investor…

Transparent and Ethical: A CFG is transparent in all his dealings. If there is a conflict of interest, he will make you aware of it, unlike most other investment advisors. He will disclose all commissions earned when recommending any investment avenue to you.Ethics is the first priority. She/he will adopt the utmost care and diligence while dealing with your finances, giving you the trust and confidence that your financial goals can be achieved.

Your interest first: A CFG will keep your interest first. “Food for one can be poison for another”. Thus, before rendering any advice, a CFG will analyse your needs, various subjective factors such as: risk profile, age, financial goals, income, and expenses, asset & liabilities, amongst a host of others. Moreover, the recommendations would be backed by thorough research and analysis.And after a portfolio is built, close monitoring would be done at regular intervals.This would prove useful, during turbulent times in the journey of wealth creation. Also, he would assist you with additional purchase, redemption requests, switch, change in bank mandate, updating your KYC, etc. which could be cumbersome for you. So, in effect a CFG will handhold you.

Explain the rationale behind the advice: Any investment recommendation is substantiated with proper facts, figures and reasoning. This ensures that the advice rendered is congruent to the need-based analysis, which a CFG carries out, that is truly in your benefit.So, you, as an investor can be rest assured that the portfolio is not constructed based on ad-hoc recommendations, which can endanger your investment portfolio, your financial wellbeing

Gives updated and accurate information: A CFG is in-the-know on any changes in policy or Government regulations that have impact on your personal finance such as changes in tax laws, mutual fund regulations, and so on. Any such change is promptly communicated to you along with necessary adjustments to your portfolio. A portfolio review onperformance per se and a corrective course, if needed is taken. Moreover, a CFG would educate you to help you be an empowered investor. This proactive approach augurs well for you, as an investor and you ’re not misled.

After sales support: Entering into an investment is just the starting point; you also need prudent and reliable after-sales support from an investment / financial advisor. A CFG would provide all the after sales support, be it: resolution of your queries, counselling, support transactions, etc., truly a financial guardian standing by your side. In addition, to improve her/his service, she/he will reach out to you with a feedback form to see what she/he can do to ensure a delightful experience for you, the investor.

All these virtues of a good CFG are intended to serve you better and develop a healthy rapport.Do not forget, every investor needs a guardian today, so make sure you  hire your Certified Financial Guardian.

If you are an investment advisor reading this post and interested in achieving the status of a & lsquo;Certified Financial Guardian’ and working towards giving your clients honest, professional, and competent advice; take up the CFG certification today!

Planning For Your Taxes? Avoid These 3 Mistakes

Have you planned for your taxes?

No? Do you still think there is a lot of time in hand?

Yes? Think again…

The last day of February has arrived and you just have a month (last date: 31st March) to plan your taxes and submit the proofs to your Human Resource Department.
Have you figured out how are you going to plan your taxes?

Of course, you have. After all you have been planning for your taxes through the year to use the entire benefit available under Section 80C and 80D, isn’t it?

That is a good start…

But aren’t there tons of financial products available under these sections? Which one are you going to choose?

Are you going to purchase yet another insurance policy to help you save taxes? Or are you going to invest in a 5-year fixed deposit?


Have you looked beyond Section 80C and 80D to save your taxes?

Don’t be shocked! Yes, there are options that can further reduce your taxes.

During this last month, keeping a cool mind can be a bit challenging. With the year-end pressure, there is a possibility that you may make unwise decisions while planning for your taxes.

So, in today’s article we have listed three such common mistakes to avoid while planning for your taxes.

  1. Not looking beyond Section 80C and Section 80D: This is the most common mistake done by tax payers. If you believe that you can plan taxes only under the purview of these sections, then think again.

    The Income Tax Act, 1961 permits you to claim deductions on interest on the loan that you have borrowed for your child’s higher education, or the amount spent on the treatment of a dependant, or the rent that you pay on your residential premises, etc.

    Some sections you can use to plan your taxes are as follows:

    Tax Planning Sections beyond Sec. 80C and 80D

    Section Who can claim Nature of deduction Reason
    80CCG Specified retail individuals (New retail investors) 50% of the amount invested (maximum deduction Rs 25,000) Rajiv Gandhi Equity Savings Scheme (RGESS) is available for current Assessment Year 2017-18 only. It has been repealed from the A.Y. 2018-19.
    80DD Resident Individual / HUF Rs 75,000 (Rs 1,25,000 in case of severe disability) Any expenditure incurred for the medical treatment (including nursing), training and rehabilitation of a dependant, being a person with disability.
    80DDB Resident Individual / HUF Maximum deduction of Rs 40,000 (Rs 60,000 in case of senior citizen and Rs 80,000 in case of very senior citizen) Expenses actually paid for medical treatment of specified diseases and ailments subject to certain conditions.
    80E Individual No limit on interest on loan (maximum period : 8 years) Amount paid out of income chargeable to tax by way of payment of interest on loan taken from financial institution/approved charitable institution for pursuing higher education.
    80G All Assesses 50% of the net qualifying amount or 100% of qualifying donations, as the case may be Donations to specified institutions.
    80GG Individual Rent paid in excess of 10% of total income for furnished/unfurnished residential accommodation (subject to maximum of Rs. 5,000 p.m. or 25% of total income, whichever is less) Individuals not receiving any house rent allowance (HRA).
    80GGC All Assesses (other than local authority and artificial juridical person wholly or partly funded by Government) Sum contributed to any political party/electoral trust Deduction will not be allowed if sum is contributed in cash.

    Note: The table is for illustration purpose only
    (Source: Income Tax India)

    So when you are planning for your taxes, take a look at the above Sections too and see if you can claim a deduction under any of them.

Moving on…

The second mistake to avoid is…

  1. Buying a lot of insurance plans: Have you ever walked into a bank during the tax saving season?

    If yes, you would have noticed bank representatives (relationship manger) recommending that you purchase a traditional life insurance plan.

    Even when you inquire about other tax saving instruments, the representatives will try to convince you to buy a traditional life insurance plan only.

    They package it as the only financial instrument that save taxes, have an insurance cover, and earn returns on investment; all at the same time!

    But there is a catch…

    These traditional life insurance products generate high commissions for the bank and help the representative to achieve his yearend income targets; often at your cost.

    What you fail to realise is insurance premiums on traditional life insurance plans are largely allocated towards mortality charges and distributor commissions; this affects returns. Traditional life insurance plans offer paltry returns in the range of 4% to 6% even after 10 to 20 years of investment.

    Moreover, you may be unable to recover your principal investment too if you pay insurance premiums for only five years and then redeem the investment!

    Although an optimal insurance is needed to protect against life’s uncertainties, it isn’t an investment product as most agents and bank representatives would like you to believe.

    So stay away from these “well meaning” advisors as much as you can and purchase insurance to indemnify your loved ones from bereavement.

The third common mistake to avoid is…

  1. Investing in tax inefficient schemes: Investing in a 5-year fixed deposit or a National Savings Scheme (NSC) is an inefficient way to tax planning.


    Well, the interest you earn on these fixed deposits and NSCs is taxable, unlike Public Provident Fund (PPF) or Employees Provident Fund (EPF) and Equity Linked Savings Scheme (ELSS) etc. who enjoy the Exempt-Exempt-Exempt (E-E-E) status.

    But shouldn’t you have a mix of equity and debt in your portfolio?

    Yes, you should! But too much of debt can affect the overall returns on your portfolio.

    What you need is a balanced debt-equity ratio that is in sync with your financial goals.

    To start off, you can use the following thumb rule:

    Proportion of Equity in one’s portfolio = 100 – Your Age

    As per the above thumb rule, the proportion of debt in your portfolio should be equal to your age. So by this rule, asset allocation for various age groups would be as under:

    Proportion of Equity and Debt

    Age Proportion of equity in the portfolio Proportion of debt in the portfolio
    30 70 30
    40 60 40
    50 50 50
    60 40 60
    70 30 70

    Note: Only equity oriented NFOs are considered 
    This table is for illustration purpose only 
    (Source: PersonalFN Research)

    The rationale behind this rule is: the older you get, less time you have to recover if the stock market tumbles and your risk appetite recedes as well.

    As you enter retirement, taking all your money out of equities could slow down the growth of your portfolio too much, preventing you from keeping pace with inflation and possibly deplete your retirement savings.

    Although this isn’t the optimal approach to structure one’s asset allocation, it could be a good starting point for beginners in the investment arena.

Now that you know the common mistakes that an individual makes during this time of the year, how do you avoid them?

By seeking the help of a Certified Financial Guardian (CFG), of course.

A CFG is an ethical professional financial advisor with years of experience in the personal finance space.

And we have listed them on a common platform for your benefit!

To get listed on these CFGs have gone through an intensive program emphasising not only on the different areas of personal finance, but also on the importance and essence of developing a financial planning advisory based on the principles of ethics and integrity.

We invite you to connect with them to sync your financial goals with an efficient tax planning strategy.

3 Mistakes To Avoid While Choosing A Financial Advisor

Have you ever opted for the services of a financial advisor?

If you are reading this article, then the answer would probably be a “yes”. You either opt for his/her services regularly or you may have consulted him/her at least once in the past.

Your financial advisor could be the next door neighbour, a close friend, a relative or even a newspaper which you follow diligently to make your financial decisions.

But has it been a thoughtful choice with thorough due diligence?

One may retort: What Due Diligence? Why do I need due diligence to hire a financial advisor?

We believe hiring a financial advisor can be challenging and it isn’t as easy as hiring a plumber or a painter.

Yes, we mean it!

Why? Because…

When you hire a plumber to fix the pipe or a painter to paint your house, you would know whether your decision was wise or not in a matter of hours or days.  But it isn’t the same case when you hire a financial advisor!

If you pick a bad one, you may not realize it for years. You may go on relying on his/her services, until you realise that you fell way short of achieving your financial goals; without time to correct the course.

What should you do in that case? How could you spare yourself any financial heartache?


Avoid these 3 common mistakes when selecting a financial advisor and you’ll be on your way to financial wellbeing.

  1. Not doing enough research: What would you do if you were to get married? Will you marry the first lady/man who comes along? Or will you try to get to know him/her better?

    The answer is a no brainer…

    Of course, you would spend time with the individual to get to know him/her better. After all, it is your life’s happiness that is at stake and you wouldn’t like to tie the knot with an individual who doesn’t resonate with your views.


    Now that’s exactly the kind of approach to follow while hiring a financial advisor!

    It is weird that most individuals don’t have a set of questions to ask a financial advisor before associating with him/her. They prefer the “first come, first serve” approach when selecting a financial advisor.

    But isn’t this approach completely absurd?

    How can you just park your money with an individual you hardly know?

    But then you may argue, “The financial advisor was referred by a close friend and my friend will always have my best interest in his mind”.

    Maybe yes. But while a referral is the first step to building trust, it is important that you evaluate the advisor on your parameters before signing up with him/her. Questioning the advisor’s approach is a smart investor’s way of taking precaution and treading cautiously.

    But then, how would you evaluate the financial advisor?

    By asking him/her a series of questions, like a job interview that matter to you, such as:

    • The number of years of experience in the personal finance space the advisor holds
    • Does the financial advisor use technology to disseminate information? Or does he/she still follow the age-old methods of communication?
    • Is he/she a sole proprietor? Or does he/she have a professional team in place.
    • What is his/her educational qualification? Is it in-sync with prominent personal finance qualification such as the Certified Financial Guardian (CFG)? Likewise with his/her employees – are they well-qualified and experienced to guide you?
    • Does he/she use any software to evaluate a financial product? Or does he/she just give advice based on suggestions made in a newspaper?

      How does he/she stay updated on the changes in the personal finance space? Is he/she associated with any professional organisations?
    • How frequently will he/she would review your portfolio?
    • Ask the financial advisor for at least 3 references of individuals whom he/she has serviced, and make sure to ask these references at least 3 areas where the advisor can improve his/her service. This will give you a better understanding on the respect the advisor commands among his/her clients.

    This list isn’t exhaustive. However, it’s a good starting point. You can add other questions to this list that you think appropriate.

    Do make it a point to check the answers of the financial advisor and see if they are in sync with what you expect.

    Make sure to flag the answers you don’t understand and ask the advisor to explain these in a layman terms. Those advisors who can communicate in a simple easy to understand language, free of jargon immediately build trust and confidence with their clients.

The second mistake to avoid is…

  1. Not knowing how the financial advisor will be compensated? Financial advisors in India follow any of the three revenue models:
    • Pure commission model — Here the financial advisor is compensated based on the commission he/she earns from the financial products that you invest.
    • Pure fee-based model — Here the financial advisor is compensated by the fees you pay for his advice and avail his/her services. He doesn’t earn any commissions on the financial products you invest.
    • Fee + Commission model— The financial advisor is compensated by the fees you pay for his advice and avail his/her service + the commissions he/she earns on the financial products you invest.

    Now that you know the three models, have you ever wondered how most financial advisors in India are compensated?

    The most common model in India is the Pure Commission model. Most investors unknowingly prefer to associate with an advisor who follows this model.

    A naïve investor believes that since he/she isn’t paying any money from his/her pocket, there is no downside to associate with advisors practicing the pure commission model.

    Do you really think that there is no downside? Think again…

    It is in an advisor’s best interest that you purchase/ invest in financial products that earn him/her more commissions; at the cost of your financial goals.

    These type of advisors (misrepresent themselves as ‘advisors’; in fact they are nothing but agents) mostly recommend traditional insurance products for all your financial goals. After all, insurance companies do offer some handsome commissions. This vested interest leads to mis-selling.

    Now that you are aware, would you associate with an advisor who keeps his best interest ahead of yours?

    No, isn’t it?

    So, ideally, you should approach a financial advisor or a financial planner or a CFG practicing on pure fee-based model.

    Since he charges professional fees (just as a doctor, chartered accountant, architect and lawyer etc.) for his/her services, in most likely case he would put your interest at fore and handle your money with as much care as he would while managing his own money. So, therefore chances of mis-selling reduce drastically.

    Always consult a SEBI Registered Investment Advisor (RIA) who are subject to audit, legal compliances, and ethical code of conduct. If they are found in contravention of the provisions laid down by SEBI, they can even lose their licence to practice (just like any other professional).  You can find a list of these RIAs here.

The third and the last mistake to avoid is…

  1. Associating with a relative or a close friend as your financial advisor: Yes, we recognise how controversial this statement sounds.

    Like most individuals, you trust that a relative or a close friend would be the best person to act as a fiduciary.

    After all, you know him/her since a long time and he/she wouldn’t take you for a ride.

    But, that is exactly the problem while associating with a close friend or a relative!

    You let your “smart investor” guard down and that is detrimental to a healthy professional relationship and your financial wellbeing.

    When you work with a close friend or a relative, you tend to make decisions based on emotions rather than rationale. You trust blindly and don’t do the much needed due diligence before signing up with them.

    Ask your childhood friend for his business history, experience and credentials etc. and he/she may take offence; fail to ask a full set of questions and you remain unsure you have the right expert.

    There is more than money at stake when you do business with friends and family. If the decisions taken by the friend or the relative do not bear the kind of results you had hoped for, you will end up losing a close relationship too.

    If you still want to go ahead with the relationship, make sure to factor in the extra value of your friendship into your decision making. Remember, you’ll lose a lot more than just money if a relationship with a friend or relative turns sour.

So what is the best way to avoid all these mistakes?

Is there an online platform/resource where you can associate and compare financial advisors?

Well, there is…

We invite you to explore

All the CFGs (as they are called) listed on the website have gone through an intensive program emphasising not only on the different areas of personal finance, but also on the importance and essence of developing a financial planning advisory based on the principles of ethics and integrity. Connect for the right advice.

CFG, Mr Kannan K.K. – Guiding Investors To Make Informed Decisions

In the endeavour to help investors achieve their financial goals, Mr Kannan ardently conducts his financial advisory business. He’s been practicing over five years battling all odds: competition and a fierce regulatory environment,where some have even exited the financial advisory / mutual fund distribution space.

Guiding investors to make an informed investment decision by recognising the risk-return trade-off is what distinguishes him from the rest. It is his vision to see as many investors achieve their financial goals.

He proactively reaches out to his limited set of clients addressing their queries/needs. As a result they’re satisfied with his service, and now endeavours to expand his advisory business pan India.

Mutual fund investing and bond investing are some of the key services he offers.

He counsels investors on what is best suitedfor them.

Mr Kannan stands for transparency and ethics in the financial advisory space, and that encouraged him to take up, and successfully complete , CFG certification.

He keeps himself abreast on various developments in the industry, unceasingly reading newspapers, websites, blogs, etc.

He admires, India’s top fund manager, Mr Prashant Jain (ED and CIO of HDFC Mutual Fund with collective experience of over two decades in fund management and research in the mutual fund industry) for the consistent performance across different market conditions.

Besides financial advisory, Mr Kannan holds interest in copywriting, and therefore reads many books, blogs, related to it during his spare time.

For more such profiles visit the CFG Blog

5 Reasons Why You Should Avail The Services Of A Financial Guardian

Good money managers know when to delegate, and when to seek expert opinion. So as the leader of your personal finances, you shouldn’t be afraid to consult a Certified Financial Guardian (CFG) when appropriate.

If you are still contemplating on associating with a CFG, here are 5 questions to ponder on…

All we want you to do is honestly answer the questions with a “Yes” or a “No”.

So, let’s begin…

  1. Do you need help tracking your monthly finances?—A Financial Guardian’s job is to help you achieve your long-term financial goals. And in order to do so, he would want to have a look at your Net Worth and Cash Flow Statements.

    There are tons of free software such as Mint and Budget Pulse that can help you keep a track of your expenses. You may even record your expenses in a diary or an excel sheet. The idea is to record the expenses (even the small ones) daily diligently.

    As Financial Guardians, since 1999, having catered to over 2,000 clients, we use an excel sheet to help our clients and investors keep a track of their expenses. You can download it here.

  2. You’re 54 and your goal is to have Rs 8 crore in your portfolio by the time you retire at age 60. So far you have accumulated Rs 3 crore. Should you consult a Financial Guardian?—The quick answer is Yes, you should. Who wouldn’t seek help of a professional when they are way short of achieving their financial goals?

    But, before you quickly jump to this conclusion, here’s an analogy that can give you a different perspective…

    Going by the same premise, would it be wise to consult a doctor when a life threatening disease has spread across your body? Wouldn’t it be a bit too late to seek help and expect the doctor to work his magic?

    On the other hand, a regular annual check-up would have helped to detect the disease at the earliest and restrict its spread.

    The same logic applies to your finances too!

    Let’s go back to the main question and assess the situation…

    In order to achieve the retirement corpus of Rs 8 crore in 6 years, you would need an annualised return of 17.76%, without any additional savings.

    That’s quite ambitious given the time horizon to achieve the goal.

    If you believe that you should consult a Certified Financial Guardian only when such situation arises, we request you to think again.

    A Financial Guardian isn’t a magician nor can he/she predict the market movements. Unlike other stock market professionals who paint a rosy picture and boast of having conquered the stock market fluctuations, a Financial Guardian acts as a fiduciary.

    A Financial Guardian would help you set realistic expectations and realign your goals with the accumulated corpus to help you live a peaceful and stress free retired life.

  3. You have invested in dozens of different funds. Your spouse has another set of accounts. You both contribute regularly. But you lost a considerable amount during the bear market. Should you consult a Financial Guardian?A good Financial Guardian can improve a messy portfolio by analysing its risks and returns. He will be able to highlight unnecessary investments, and the fees and taxes you’re paying. You can pay for ongoing service, or you might get a one-time-only mutual fund investment review for a few thousand rupees.
  4. You have a lump sum to invest, and you’re thinking about buying an annuity. Should you consult a Financial Guardian?—Yes, immediately! An annuity is a lousy investment product offering paltry taxable returns of 3 to 6% p.a. But, insurance agents try to distort facts and paint a rosy picture.

    There are investment products such as Monthly Income Plans, Senior Citizen Savings Scheme, and Balanced Mutual Funds etc. which can offer optimal returns during retirement. A Financial Guardian would be able to build a portfolio that is in sync with your financial goals.

  5. You want to retire early and volunteer to do good work abroad. Or go into business for yourself. The numbers don’t seem to add up, but you’re determined to find a way. Should you consult a Financial Guardian?—Oh Yes!

    This new trend has been pioneered by millennials… the ones who have introduced the ‘start-up’ culture in India. They don’t worry about taking risks. It’s all about following their passions. For these youngsters working till 60, seems an old-age philosophy; ’45 is the new 60’.

    And if you are a part of this new generation and plan to implement your new business idea, it is wise to assess where you stand today, financially.

    You see, like all businesses, your business will not take off overnight and would require a few years to break even. In the interim, there will be EMIs and school fees to pay. A holistic financial plan designed especially for you, will help you focus on your business rather than the bills that you have to pay.

The list can go on.

So hope you recognise the need for a Financial Guardian who can professionally and prudently handhold you in the journey of wealth creation. Irrespective of where you stand in your finances, it is a wise decision to seek a second opinion.

You will be able to evaluate and choose a Financial Guardian here.

All the Guardians listed on the have gone through an intensive program emphasising not only on the different areas of personal finance, but also on the importance and essence of developing a financial planning advisory based on the principles of ethics and integrity.

One such CFG is Mr Viran Patel, who holds the distinction of being India’s 1st CFG. He has over 15 years experience in the financial advisory space. Mr Patel had noticed that agents lack professionalism. Financial products are sold rather than advised. This impelled him to make a change and save investors from the clutches of such agents (who often mis-sell). To know more about him, click here.

Is Your Financial Advisor A Guardian?

Invest in ABC Ltd“, said Mr Stockbroker, who runs a financial services boutique firm at Nariman Point, a financial services hub in Mumbai. “Mujhe news mila hain ki ABC Ltd. ke share prices badhne wale hain. Abhi time hain market mein invest karne keliye, teji chalu hain” pitched Mr Stockbroker (The share prices of ABC Ltd are going to rise and this is the right time to invest in the amid the Bull market phase)

How many times have we heard these words, where a stockbroker has lured you, an investor, to invest in the stock markets with a promise of stupendous gains? And, if the stockbroker is a close friend, relative, accountant etc. such tips are trusted even more and often perceived to be reliable.

Much to our misfortune, most of us follow through on these statements; we view the stock markets as a place that can give us quick returns. We believe that the only way we can make a “killing” in the stock market is by “timing the market correctly”. Succeeding leads us to crave for more; and if we fail, then we invest more to make good the loss.

Have you considered the harm you may be causing your long-term financial wellbeing by indulging in trading of this sorts or gambling? The similarities are appalling-both are speculative in nature, and gullible investors fall for the thrill of it, believing they can get rich quick. The fact is you cannot create wealth by doing either, although there are many out there who attempt to. Remember, a trader or a gambler is only good until his last trade/bet.

Today, our brain is programmed to consider trading in the stock markets as an acceptable norm amid the exuberance of an urban life vis-a-vis gambling, which is still considered a taboo. The information overload has left many investors mystified, bamboozled, and directionless, perhaps even forgotten the basic tenets of investing.

Proponents of Behavioural Finance (the study of the influence of psychology on the financial decisions we take in life and the subsequent effects on our financial wellbeing) mention that, four important emotional areas are triggered when it comes to stock market trading:

  • Greed: Greed is one of the strongest emotional desires. It drives an individual to acquire as much wealth as possible in the shortest possible time from every channel available.
  • Herd Mentality: Individuals find solace in a group. We tend to follow what is the common, socially-acceptable outlook towards money and seldom question its prudence on account of the fear of being ostracised.
  • Faith: Have you ever wondered why professionals suit-up for a meeting or an interview? Well, it’s being said that many investors evince faith in well-dressed professional as against those who approach with modesty. (“Clothes make the man”-Erasmus) But as they say, “looks are deceptive” so, use sound discernment before you hire a financial advisor.
  • Emotions: Emotions play an important role in influencing our financial decisions, causing us to behave in an unpredictable or irrational way. Even at the stock markets, we tend to invest more and more when the markets are on a high and hold on to our investments when the markets are falling (as we believe they will rebound). Quoting Mr Warren Buffett, you should “be fearful when others are greedy and greedy when others are fearful”.

Behavioural Finance studies suggest that the important traits of successful individuals are self-discipline, will power, strength of character, and delayed gratification.

The purpose of seeking advice from an experienced financial advisor is to receive intelligent, prudent advice that can help achieve their investment objectives / financial goals by clocking an optimal rate of return. Every investor would weigh the cost-to-benefit ratio of having a financial advisor. In the financial advisory space, we call this the value of advice’, and it need not always be monetary.

Amid the mis-selling practice in the financial services industry, what investors are looking for is an advisor who can serve as a ‘Financial Guardian’. One who can understand their clients’ outlook towards money, and guide them in a manner that helps them achieve their financial goals, keeping their best interest in mind.

If financial advisors act as ‘Financial Guardians’, with ethics as their compass and handle the hard-earned money of investors with enough care, prudence, sense of responsibility, and intelligence, they can earn the trust, respect, and loyalty of several investors.

Do you believe that your financial advisor adopts high fiduciary standards and keeps your goals in mind? Do share any experiences (positive or negative) you have had with us, as it could benefit fellow readers. It would fuel our editorial team to bring you other in-depth, relevant perspectives. As they say: “each one help one”.

A CFG Whose Advisory Business Is Built On A Foundation Of Ethics and Honesty

Right since college days, Mr Hemnani took keen interest in equity markets. He admits making a lot of mistakes then; but believes that was good learning experience. Ultimately, embedded with the motto of handholding individuals to plan their goals prudently in the journey to wealth creation, he founded a financial advisory business.

Today, he has over a decade of experience – with of course ups and downs, hope and fear – but believes it’s been an enjoyable and fulfilling experience. Mr Hemnani makes it a point to be in touch with his clients whenever they need him, and even does so proactively – through technology and even personally. As a result his clients are satisfied!

Guiding clients to select winning mutual fund schemes, charting asset allocation, portfolio rebalancing, by leveraging on technology are some of the key services of he offers.

Mr Hemnani abhors kickback and believes there need to be strict regulations to fight this malpractice (which is rampant in the financial services industry). He’s of the opinion that those giving due importance to thorough ‘financial planning’ (which includes optimal insurance planning as well) should be incentivised.  He took up the challenge and has successfully pursued the Certified Financial Guardian (CFG) Certification with the endeavour of growing his business the ‘ethical’ way.

To keep himself abreast, he voraciously reads business dailies, magazines, and various finance posts on the internet. He loves reading books are those authored by Warren Buffett and Benjamin Graham.

Mr Hemnani looks upon Mr Warren Buffett and Mr Ramesh Damani as idols, and believes they’ re true wealth creators with a long-term view.

Besides work, Mr Hemnani spends time with friends, family and reading.

His advice to investors is : “Be patient with your investments and always timely review your portfolio. Never go for quick bucks.”

Mr Chandrasen Hemnani can be reached here

It’s Time to Get Yourself a Financial Guardian

There are moments in life when you are offered two paths. The first is crooked but easy, the one most choose to follow… and the other may be a path less travelled, punctuated with cliffs and valleys: a path of honesty that very few want to follow.

The choice is yours…just like it was ours 15 years ago.

In the late 1990’s many companies entered the financial services sector to sell either insurance or mutual funds – but not many may have focused on the mandate to serve in the best interest of their clients.

PersonalFN was founded in 1999 fueled by the ambition of empowering Indian investors to make better investment decisions. Built on the cornerstone of honesty, integrity and competence, PersonalFN successfully guides investors in their journey to financial freedom in an unbiased and transparent manner.

Amidst the organized mis-selling by many players in the financial world, PersonalFN has spent over 15 years educating investors and has established a loyal following with the support of tens of thousands of valued readers like you. Yet in our interactions with the clients and readers, we have found one common dilemma…

Unethical Advice!

Now, there are people who – while driven to earn a quick buck – give in to ‘making it’ by adopting unethical means.

Here’s a case of one of our HNI clients, Mr Kanan (name changed) who had been actively taking advice from his bank relationship manager on money matters, which also included maximizing returns on money lying ideal in his premium banking account. Mr Kanan lost trust in his relationship manager when he realized that he was short of the money needed for his daughter’s higher education. This was something that Mr Kanan had planned 5 years in advance. However, the lack of knowledge about investing had forced him to place his trust in the hands of his relationship manager.

The relationship manager had suggested investment products without completing a risk profile of Mr Kanan and without fully understanding his investment objectives. Predictably, most of Mr Kanan’s investments were made in fancy NFO’s and ‘structured’ products which paid high commissions. Additionally, the relationship manager actively suggested churning the portfolio to ensure that the relationship manager kept earning more commission income and met his business targets.

The relationship manager convinced Mr Kanan that it was really important to get strong returns – and one way to ensure this was by shifting money in equity mutual funds that took excessive risk to generate higher returns. This was very unethical as the recommendations made by the relationship manager were driven by hefty commissions paid by the NFO factories. Moreover, some of Mr. Kanan’s investments were not in line with his investment objective and time horizon. Ideally, one’s savings should be allocated to those investment products which are in line with their risk appetite and time horizon. All these factors were clearly missing in Mr Kanan’s case-and that cost him a fortune.

Mr Kanan trusted the relationship manager and thought that the advice from his relationship manager would be good for him. But the huge losses suffered during a recent market downturn completely caught Mr. Kanan off guard!

There are many Mr Kanan-like stories in India – you read about them in the press or you hear about them from friends and family members.

This is not to say that unethical advice is given only by relationship managers working for a MNC bank. Vested advice may also come from mutual fund advisors / distributors, insurance agents, stock brokers, financial planners – or websites that are targeted towards those looking for alternatives. And it is also not true that all relationship managers are out to mis-represent their clients and only focus on the commissions paid by the manufacturers. But it is fair to say that investors need to be careful.

PersonalFN wants to solve your problem of finding a person you can trust. While there are many certifications and requirements set by regulators and industry bodies, it is unfortunate that many financial advisors have resorted to suspect practices while advising on personal finances. To curb such practices, PersonalFN is creating a group of individuals that are ethical and competent in their dealings with clients. And we will introduce this group of individuals to you!

There is a genuine demand from investors for authentic, independent, and unbiased advice on all aspects of personal finance.

PersonalFN has, in the past, launched various services backed by unbiased views and honest opinions.

And today, PersonalFN brings the first-of-its-kind exclusive endeavor that can get like-minded advisors and investment professionals together and place them at the forefront of the financial advisory industry.

PersonalFN is glad to launch, an exclusive platform of advisors who want to become a financial “guardian” for lakhs of investors like you: investors who may have been misled and exploited by unethical advisors.

A Certified Financial Guardian will be a symbol of honesty and commitment towards the interests of investors and help build a long-lasting and trustworthy relationship between those who have the savings and need investment advice – and those who can offer it.

In an ocean of rampant disappointment and extreme distrust, a Certified Financial Guardian will be among the chosen FEW whom you could meet and place your trust in with a high level of confidence.

Do not forget, every investor needs a guardian today, so make sure you hire your Certified Financial Guardian.

If you are an investor and need a Certified Financial Guardian to contact you, please click here.

If you are interested in achieving the status of a Certified Financial Guardian and working towards giving your clients honest, professional, and competent advice, please click here.

“Your Prosperity is our Goal”: Mr Sushil Sabarwal

“Your Prosperity is our Goal,” is the motto that defines Mr Sabarwal.

Offering services from creating a mutual fund portfolio to asset allocation, he goes a step ahead to help clients with their financial goals through retirement planning,amongst a host of others.

He vows not to leave you in the lurch. “Being Accessible& Available,” is what he promises to his clients. He proactively shares policy changes such that the clients can implement in the restructured plan.

Mr Sabarwal has created sound processes and programs that help him to serve his clients better. “Through our well-managed wealth creation program, we have helped hundreds of our clients by dramatically reducing the mortgage terms through best realising their goals,” he proudly says.And to compliment this, he has a vision to “to improvise a client’s financial wellbeing by underlying those investment plans that turn their desired goals into reality”

With over a decade of experience, he is serving multiple family generations. This alone speaks a lot about his commitment to serve clients and the trust generated over the years. His strong adherence to ethics is what made him take up the CFG course, to offer the best practises and transparency to his clients, while offering the best support and services.

Mr Sabarwal is a part of theNetworkFP& FIFA group, which are associations of financial planners and financial advisers. This helps him to keep abreast with developments in the financial services industry. This ensures you get the benefit from the latest and best practices.

He loves reading Robert Kayosaki.Kayosaki’s book, Rich Dad Poor Dad is his favourite.

He admires Amit Trivedi, Gaurav Mashruwala andKeyur Shah, who have contributed immensely to the financial planning domain.

His advice to investors is: Have trust & faith in your advisor, riding the sea of investment planning and financial goals achievement’s cannot happen without a financial advisor.

Mr Sushil Sabarwal can be reached here

Why Financial Guardians Shouldn’t Ignore Investor’s Needs

But if financial (investment) advisors follow high fiduciary standards and put their client’s interest at fore at all time, RESPECT and TRUST can be earned.

But financial advisors directly jump to the last step—offer a solution (financial product) without understanding the client’s outlook. This approach results in a fractured relationship. 

By failing to understand a client’s needs, you risk the following:

Losing the client, credibility, and trust– What would you do if a doctor recommends a medicine to you without an examination? Would you be comfortable to take the medicines or would you take a second opinion? A second opinion, off course, isn’t it? You would not visit the doctor again, nor recommend him to your friends and family.

That is exactly what will happen to you, if you recommend a financial product to investors without understanding needs and concerns. He maylisten to you patiently, but ignore the advice and move on.

You’ll be portrayed more as a salesman than a trusted advisor–Because you have pushed a financial product without understanding the client’s financial health, number of dependant family member, his financial goals, insurance needs, risk profile, among a host of facets.

Remember, when an investor walks in, he expect you to handle his money with enough care and prudence as you would while managing your own money.

Pushing investment products is not the long-term interest of investors, or financial advisor. It could splinter relations. No one likes to be sold a product or a service; but appreciates a genuine, advice which is what investors look for in a financial guardian.

Risk tolerance will notmatch with that of the investor–As you may know, there is no universal level risk tolerance. It varies from individualsto individuals based on factors such as financial conditions, financial responsibilities, investment horizon to achieve financial goals,insurance coverage (both life and health) and liquidity.

A prudent assessment of the risk tolerance along with his/her age, past experience, knowledge and the comfort factor; laying an investment strategy is a prudent approach. It is best not to take investors for granted. After all, it’s question of their hard earned money and their long-term financial wellbeing.

For example, aninvestor who has burnt his fingers in the stock market may be apprehensive about investing in the stock market. Respect that! But rightly educate him/her if investing in equities is warrantedaidedfavourable factors viz. age, income, investment horizon, financial goals, etc. on his side. Every drop can make an ocean; so encourage to take up a Systematic Investment Plan (SIP) in mutual funds by advising consistent performing schemes from fundhouses that follow strong investment processes and systems. To achieve long-term financial goals, SIPs are a preferred route. A favourable performance can help investors’ gains confidence to invest even more.

The investment portfolio may go askew:Besides, wealth creation the investment portfolio should be able to address financial goals – children’s future needs (education and marriage), retirement, amongst a host of others, even the materialistic ones. If that not the case, portfolio construction would be ineffective or futile.

Recognising financial goals and then astutely selecting investment avenues, will ultimately achieve investment objectives, and earn the respect from investors.

So, when you deal with investors, ask them to pen down financial goals and edify them if they are S.M.A.R.T (Specific, Measurable, Adjustable, Realistic and Time-based), and classify them into short term, medium term, and long-term for the portfolio construction exercise.

End note…

Reputation is the key in the financial advisory business. If you follow high fiduciary standards and apply professional wisdom with utmost care, the brownie points you earn add to respect and trust amongst investors.

Remember, the customer / client is always the KING. So, always put his interest at fore as financial guardian.