IS YOUR ELDER BROTHER OR FATHER YOUR
FINANCIAL ADVISOR ??
As I interact with lot of investors, I find that some investors, are not even willing to understand investing and its implication on their family, social life and over all well being.
They have this habit of referring for all their financial including investments to either their elder brother, spouse or their parents.
I am not saying that this is completely a wrong practice, but before doing that one must be confident about the competence of the person on whom he is depending upon is efficient that he can advice on investments or financial planning matters?
By efficiency I am in no way referring to his qualification, but yes I am referring to his area of expertise.
I have seen even professionals from commerce background are not sometimes well versed with investment and wealth creation strategies.
It is very recently that I was with a young investor and he was looking for tax efficient returns without any exposure to equity as this was an investment for around 6 months.
The investor was into highest slab bracket hence I recommended him Fixed Maturity Plan from a reputed mutual fund house.
After understanding everything the young man insisted that I should explain the product to his father. Reluctantly I agreed.
The first question that was asked by his father was pretty basic- “is this an open-ended product or a close-ended product”.
Then he was apprehensive that since it’s a mutual fund and there is nothing in writing about the maturity proceeds hence it is very likely that the majority portion of the earnings would be siphoned by the AMC and the fund manager himself.
He refused my advice and directed his son to go for a Bank FD saying that the mutual funds are not safe and banks are.
So they invested a part in a PSU bank. And then he went for the final kill and directed his son that since equity markets are in bull phase, so he should better invest the remaining part in 2-3 large cap stocks and sit tight as he was confident that this way they would be able to make more money in one month that this FMP would probably give.
Although the father was utmost working in favor of his son but his knowledge limitations ruined his son’s portfolio.
Rajiv Kapoor FCS
9839034761
As I interact with lot of investors, I find that some investors, are not even willing to understand investing and its implication on their family, social life and over all well being.
They have this habit of referring for all their financial including investments to either their elder brother, spouse or their parents.
I am not saying that this is completely a wrong practice, but before doing that one must be confident about the competence of the person on whom he is depending upon is efficient that he can advice on investments or financial planning matters?
By efficiency I am in no way referring to his qualification, but yes I am referring to his area of expertise.
I have seen even professionals from commerce background are not sometimes well versed with investment and wealth creation strategies.
It is very recently that I was with a young investor and he was looking for tax efficient returns without any exposure to equity as this was an investment for around 6 months.
The investor was into highest slab bracket hence I recommended him Fixed Maturity Plan from a reputed mutual fund house.
After understanding everything the young man insisted that I should explain the product to his father. Reluctantly I agreed.
The first question that was asked by his father was pretty basic- “is this an open-ended product or a close-ended product”.
Then he was apprehensive that since it’s a mutual fund and there is nothing in writing about the maturity proceeds hence it is very likely that the majority portion of the earnings would be siphoned by the AMC and the fund manager himself.
He refused my advice and directed his son to go for a Bank FD saying that the mutual funds are not safe and banks are.
So they invested a part in a PSU bank. And then he went for the final kill and directed his son that since equity markets are in bull phase, so he should better invest the remaining part in 2-3 large cap stocks and sit tight as he was confident that this way they would be able to make more money in one month that this FMP would probably give.
Although the father was utmost working in favor of his son but his knowledge limitations ruined his son’s portfolio.
Rajiv Kapoor FCS
9839034761
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