Here’s How To Earn Your Client Loyalty

Has your client misjudged you or showed sign of mistrust? They may have a relationship with you, but are times there when they panic and all you wish is that they have a little faith in you, right?

Reports of how naïve investors have been taken for a ride are plenty, and that’s precisely the reason why investors do not TRUST financial advisors easily today. TRUST is earned over a period of time by doing what’s respectful and moral.

And hence investors are cautious at every step. After all, it’s a matter of their hard-earned money.  And with so many avenues available in market, it’s a little difficult to ensure that your clients stick around.

All advisers claim to provide the best possible advice. In such circumstances, how can you, as an adviser, stand out? Well, one of the key ways of doing this is by providing prudent advice, and striving to seek your client’s interest before your own, by handling their investments with as much as care as you would manage yours. This can be a win-win for you as well your client and would earn you loyalty. Being happy with the advice you render them, clients may even recommend your service to others as they talk highly about you/your organization.

Let us understand how to earn your client’s loyalty by simply understanding the basics of this relationship:

  1. What clients expect

Understanding the each other’s expectations is the most basic requirement in any kind of relationship. And when there is an exchange of money, the expectations are much higher.

And, in this case, your client first expects you to be transparent. So, follow the best disclosure norms. Client’s expect you to understand their needs so they may receive ‘personalised’ prudent advice. Imagine going to a doctor who gives you a prescription without taking cognizance of your physiology and medical history —— the results would be disastrous! Hence, as a financial advisor you need to ensure that your client’s financial health is not at risk. Understand his/her financial history and his goals well. Build pragmatic expectations and goals by showing a realistic risk-return view.

Another important factor is to understand your client’s risk-taking capacity. And accordingly recommend securities which will ensure achievement of goals at their given level of risk. Clients expect you to holistically recognise their financial conditions before you offer advice. They expect you to understand their investment objective, as well as know their financial goals, age, income, expenses, asset & liabilities apart from a host of other facets. They are looking at need-based solutions and are uncomfortable with product pushing. Moreover, when you speak with them, it is best to avoid financial jargons and explain it all in as simple terms as possible. Also, avoid beating round the bush— communicate clearly! 

Don’t resort to pushing products. Remember, as a Certified Financial Guardian, it is vital and beneficial to follow an independent and unbiased approach by putting your client’s interest ahead at all times. Your client expects you to be sincere while handling their personal finances with as much care as you would personally manage your own.

So, you ought to adopt high fiduciary standards, which are always in the best interest of clients.

  1. What do clients appreciate

One thing that clients appreciate the most is transparency and openness. So, to build trust and confidence in your relationship with all your clients, disclose if you’re earning commissions through your advisory practice. It will help. At PersonalFN, we follow high standards of ethics, and that’s helped us win the respect of several clients.

Everyone likes to feel special, and for that you can provide personalised/customised advice to your clients. Show willingness to resolve your client’s queries. If you voluntarily take efforts to maximize the benefits your client can gain, he is most likely to feel content with your recommendations and services. Providing a value-added service to the client, even if he hasn’t paid for it, would encourage his loyalty.

Remember the client will ultimately value your advice only if it compensates him/her well. Hence, work in a manner where your advice and recommendations genuinely benefit the client. This can happen only if you conduct thorough research and in-depth need based analysis. Don’t sell a particular product just because you earn a hefty commission on it; but advice it appropriately because it has the potential to reward the client adequately.

Another thing which clients appreciate is being told the reasoning behind your advice/recommendations logically. He/she will then be able to relate to your views and develop a healthy rapport with you. 

  1. How to cultivate trust  

“Trust is one of the most written about and researched topics because many of us have been betrayed” says David Bedrick, a practicing psychologist. He’s gone on to add that betrayal has two parts:

  1. Violation of a spoken or an unspoken agreement; and
  2. The resultant injury

Cultivating trust is a process. It cannot be built in few days. Remember, you have to earn the trust of your clients, always put your client’s interest first. People do not like being sold, rather they like make their own decisions to buy recommended services and products.

Educate your clients about the processes, the policies, & the procedures. Most investors are ignorant about these things and therefore look for professional help to guide them through the complicated maze of personal finance. A Financial Guardian has to be like a doctor, patiently addressing the queries of his patients to their satisfaction without frowning at them or sounding irritated. Remember, patience is virtue!

Most importantly, follow the best fiduciary standards. Most times, going beyond the purview of the law and acting on moral grounds in best interest of your client, can earn you trust and goodwill. So, beat the stereotype.

To sum-up

To build a trustworthy relationship, you need to earn it. You might get clients by adopting various advertising techniques, but to continue a healthy relationship over a longer time period, you need to win their trust. It will not happen by chance, you have to consistently be for them throughout their financial journey.

Help Your Clients Link Their Mutual Fund Investments With Aadhaar Card

Millennials brag a lot about being connected and how technology facilitates staying in touch even if they are miles apart. Thanks to social media, you can connect with your loved ones 24*7, throughout the year.

The Government of India, in an effort to track down black money, is trying to link all financial transactions to one unique source — Aadhaar number. Hence, by linking PAN, bank accounts, mobile number, Employee Provident Fund (EPF), as well as the demat account and mutual fund folios, the Government will be able to keep track of nearly all financial transactions. By doing so it will be difficult for income tax evaders to reroute their illicit wealth, as all transactions can be tracked by Income Tax officers.

Making Aadhaar mandatory remains a contentious issue. With certain factions citing the compulsion of the linkage as an invasion of privacy, the Government seems hell bent on making this unique ID a key document to avail of financial services.

Therefore, all investors need to link their Aadhaar with their mutual fund and demat accounts by December 31, 2017. Submit the details before the due date to avoid having your mutual fund folios frozen.

This article shows you how to guide your clients to link their Aadhaar card with mutual fund folios.

Presently, Computer Age Management Services (CAMS) and Karvy Computershare, which together service 31 fund houses, offer an online facility for investors to link their Aadhaar to mutual fund accounts. Other registrar and transfer agents, such as Franklin Templeton Asset Management (for Franklin Templeton Mutual Fund) and Sundaram BNP Paribas Fund Services (for BNP Paribas Mutual Fund and Sundaram Mutual Fund), are expected to launch a similar service very soon.

If you have invested in schemes across a number of fund houses, chances are that you will need to furnish your details to both the registrars — CAMS and Karvy separately. Similarly, if you have invested in schemes of Franklin Templeton Mutual Fund, BNP Paribas Mutual Fund, or Sundaram Mutual Fund, you will need to contact the respective registrar.  

Link your Aadhaar card to Mutual Fund accounts serviced by CAMS:

Step 1 – Visit the CAMS website

On the CAMS website –, the facility to link your Aadhaar is available under the INVESTOR SERVICES tab. You need to click on the option ‘Link Your Aadhaar’.


(, PersonalFN Research)

Alternatively, you may directly visit the link – 

Step 2 – Fill in a short form

On clicking, ‘Link Your Aadhaar’, you will be taken to a short form as below:


(Source:, PersonalFN Research)

Here, enter your email id, PAN, Aadhaar number, and mobile number. As soon as the PAN is entered, the screen will refresh to provide a list of mutual fund companies where accounts have been opened. By default, ‘All My Funds’ is checked. Hence, your Aadhaar number will be linked to all the folios under the Mutual Funds mention. We suggest that you go with the default option on the form.


(Source:, PersonalFN Research)

The mobile number provided should be the one registered to your Aadhaar number. If you have not listed your mobile number yet or if you no longer have access to the mobile number registered, update your mobile number at the earliest at a permanent Aadhaar enrolment centre. 

To update your mobile number or email id with CAMS, you may do so here –  Click ‘Submit’ to move on to the next step.

Step 3 – Authenticate the details provided

After submitting the details, an One Time Password (OTP) will be generated and sent to the registered mobile number. Enter the OTP you receive in the field and provide your consent to CAMS by selecting the check box.


(Source:, PersonalFN Research)

On clicking ‘Submit’, you will get a message stating that your Aadhaar has been successfully linked to your mutual fund folios.

cfg4_16092017(Source:, PersonalFN Research) 

Link your Aadhaar card to Mutual Fund accounts serviced by Karvy Computershare:

Step 1 – Visit the Karvy website

On theurl, the facility to link your Aadhaar is available on the right-hand side of the homepage. You need to click on the option ‘Aadhaar Linking Made Easy’.


(Source:, PersonalFN Research)

Alternatively, you may directly visit the link – 

Step 2 – Generate OTP to access account details

The online facility is only available to those who have registered their email id or mobile number with Karvy serviced mutual funds. This mobile number needs to be the same one registered with UIDAI.

If your email or mobile number is registered, enter your PAN to generate an OTP, which is sent to your registered email and mobile number.


(Source:, PersonalFN Research)

Step 3 – Link Aadhaar to Mutual Funds online

On validating the OTP, you will see a list of mutual fund companies in which accounts have been opened. By default, all the mutual fund AMCs are checked. Hence, your Aadhaar number will be linked to all the folios under the Mutual Funds selected. We suggest that you go with the default option.


(Source:, PersonalFN Research)

Provide your consent to Karvy by ticking the check box. Enter your Aadhaar number in the field provided and click ‘Submit’.

After clicking submit, you will receive a confirmation popup stating that the Aadhaar number will be linked post confirmation from UIDAI. This will complete the process.


(Source:, PersonalFN Research)

Other Aadhaar – Mutual Fund linking options from Karvy:

  1. Submit physical form – You can download the common form to link Aadhaar here. Fill and submit the form at any of the Karvy Branches or dispatch it to the address given in the form. 
  2. linking through SMS – Send (ADRLNK <PAN> <space> <AADHAAR NUMBER> <space > <space> <Y>) to 9212993399 from your registered mobile number. On authentication, it will be updated across all your folios at Karvy Computershare.  
  3. Through distributors registered with Karvy – Registered distributors can scan and upload the Aadhaar linking form of their clients. You can check with your distributor if they are registered with Karvy to utilise this route.

Do note that the Aadhaar linking process, through either registrars, will only be successful if all the details such as Name, Date of Birth, Gender, etc. match correctly. If there is a mismatch in these details, either at the registrar or at UIDAI, the linking will not be successful. You will then need to resolve the discrepancy and reattempt the linking process as above.

To get Aadhaar details corrected, visit – 

For corrections in CAMS serviced mutual funds visit-

For corrections in Karvy serviced mutual funds- 

While complying with regulations from time to time may be inconvenient, it is mandatory to complete it before the due date to avoid your account being frozen, which could lead to further difficulties.

To avoid the unauthorised use of your Aadhaar card, you can lock your biometrics here – This system will enable you to lock and temporarily unlock your biometrics so you can protect your privacy and confidentiality of Biometrics Data.

Though you may opine that linking Aadhaar to Mutual Fund accounts is just one more hurdle mutual fund investors need to overcome, the basics of investing in mutual fund schemes remain the same. This is irrespective of any changes in regulations. Hence, keep your clients focused on their long-term life goals and facilitate them with better service. You, as the Certified Financial Guardian, can be their educator and guide them to deal with these administrative activities.

How To Ensure That Your Clients Read Mutual Fund Account Statements Correctly

“I abhor paper-work”.

“I hate numbers”.

“I resist account statements and never wish to read the same”.

Investment advisors and money managers often hear these statements from their clients as many investors actually live in this fear. They abhor the paper work and formalities. Especially the YOLO (believers of you live only once philosophy) generation prefers everything that is clickable and tapeable. Unfortunately, with this attitude they eventually end up having either no or less savings

Additionally, investors might be worried about market swings. Those who have experienced how stock markets work would be accustomed to market swings. Yet, the market has the tendency to surprise even the most experienced traders and investors. Equity markets can undergo bouts of strong trends in either direction or even remain directionless for days and even months. 

Sometimes such fears are deep-rooted and you need to overcome them gradually. And for that you need right education.

During uncertain times, investors are eager to know how their mutual fund investments have performed. Whether the performance drifted with the market tide or went against it. Many investors may not be very tech-savvy to use online portfolio tracking services and some may avoid using them due to privacy issues. For them, requesting for a mutual fund statement is the easiest way to keep a track of their investments.

Thus, it is a Certified Financial Guardian’s duty to coach and create awareness amongst its clients on how they can track their investments.

We have explained in detail of how you and your clients can read the respective account statement with utmost simplicity.

Before we begin with that, let us look at how one can generate the mutual fund account statement:

As you might be aware, one can request a statement for specific mutual fund accounts from the fund house directly or even request for a Consolidated Account Statement (CAS) from the registrar or a Depository. The CAS gives a holistic view of all your holdings. 

Yes, you can request for an account statement at any time and it will be delivered by e-mail to your inbox in a few hours. There are different routes through which you can request a CAS.

Depending on your type of holding, you can request for a statement as mentioned below.

→ Physical or Non-Demat holding If you hold Mutual Fund Units in physical form, which are represented by a Statement of Account (SoA), you can request for a CAS as below.  Computer Age Management Services (CAMS) – Consolidated Account Statement – CAMS + Karvy + FTAMIL + SBFS 

Karvy Computershare – Consolidated Account Statement  Mutual Funds held specifically in SoA form and linked by a common email address will be consolidated. Ensure that your correct email id is registered with the respective mutual fund folios. You have the option to request for a summary statement or a detailed transaction statement for a defined period. If you require the statement only of a specific fund house, you can send a request to the fund house directly.

Partial or Fully Demat Holding If a part or entire of your mutual holdings is in demat form, you can request for a CAS from the Central Depository Services Limited (CDSL) or National Securities Depository Limited (NSDL). Through this CAS, holdings in demat account(s) held with NSDL and CDSL as well as in units of Mutual Funds held in the Statement of Account (SOA) form will be consolidated. If you have made any transactions, the depository will send the monthly statement to your email address in the following month. You can also request for a statement by accessing the links below:



Here, the accounts that reflect a common Permanent Account Number (PAN) are consolidated.

Both statements will give you a summary of your holdings and details of transactions, if any. If you are investing in stocks as well, the CAS from either depository will give you a wider picture of your holdings. Now that you know how to access the CAS for mutual fund investments, let’s delve deeper into how to read the statements. CAS received from CAMS/Karvy A summary statement is straightforward. Along with the personal details at the beginning, the statement provides a list of your current holdings. You will get the unit balance and the latest market value of your investments. 


(Source: CAMS Consolidated Statement, PersonalFN Research)

The transaction statement is a bit more detailed. It will summarise all purchase or redemptions made in a specified period. Whether you have made one-time purchases or if you are investing via a Systematic Investment Plan (SIP), it will reflect here. Along with the cost of purchase, it provides the current market value, using which you can calculate the performance of your investment/s.

(Source: CAMS Consolidated Statement, PersonalFN Research)

Apart from financial transactions, this statement also keeps a record of all non-financial updates on your account as well. In case you have changed bank details, updated a nominee, or corrected your address, such revisions will be updated in this statement.  Apart from this, any change in load criteria is mentioned under the transaction summary for every scheme. Beside the scheme name, the ARN code of the distributor is also mentioned. This can be helpful when you may have purchased funds through multiple distributors or an advisor.  Pay special attention to the below parameters in the statement –   

  • Folio number –It is a unique number that has been assigned to your investments made with the mutual fund house. Most mutual funds offer one folio number for all investments. Thus, if you intend to make further investments with the same fund house, ideally you should mention the folio number allotted to you earlier.
  • Fund name and option – It is vital to check whether your account statement correctly mentions the mutual fund scheme (along with the option – i.e. dividend or growth ) you opted for. This is essential because your mutual fund account statement may reveal a different mutual fund scheme or an option. In case if you find any discrepancies, you need to bring it to notice of your mutual fund distributor / agent / relationship manager, or even write to the mutual fund house for a corrective course of action.  
  • Transaction summary –This section of your mutual fund account statement reveals the transactions that have been done with the fund house. So say, in case you have opted for SIP mode of investing or a Systematic Withdrawal Plan (SWP) for redemptions;; your future account statements would reveal these transactions (date wise), along with the other details such as NAV and number of units. Similarly, if you have opted for the dividend payout or reinvestment option (instead of growth), it would reveal the value of the dividend declared along with how they have been.   
  • Current cost and market value –The current cost refers to the investment amount, which enables you to obtain “xx” number of units at an “xx” value of NAV The market value mentioned in your mutual fund account statement helps in assessing the value of your investments as the date on which the mutual fund statement is generated. So, it will reveal whether from the date of investment to the date the statement of account wealth creation or wealth erosion has occurred.

CAS received from CDSL/NSDL

(Source: CDSL Consolidated Statement, PersonalFN Research)

In this eCAS from CDSL or NSDL, you will get a summary as well as a detailed view of your holdings. The summary page will list all your holdings across stocks and mutual funds. Here you will be able to view the latest value of your holdings. In addition to the current valuation, the summary statement mentions the ‘Cumulative Amount Invested’. This includes the sum of all one-time and regular investments via a Systematic Investment Plan (SIP), net of any redemption.  Further, you will get details of any transactions made over the period.


(Source: CDSL Consolidated Statement, PersonalFN Research)

While the transaction statement looks different from that received from CAMS or Karvy, it provides the same set of information. The exit load details for all schemes are mentioned at the end of the transaction report. Remember, it is your client’s hard-earned money, which means you need to ensure that they understand the mutual fund account statement and scheme details. By doing this you will then be the real guardian for your clients.

If there is any discrepancy, do not hesitate to contact the customer service helpline of respective fund house. Always ensure that your client and his/her financial needs and goals come first.

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