As assets of mutual funds surge to new highs, many new investors are entering the industry and committing investments to meet their long-term goals. Since it is impossible for every individual to track investments, many take the help of the mutual fund distributor or advisor. It may make sense to choose an appropriate financial advisor, who can help manage their investments:

What qualifications and experience does the advisor have?

Using mutual funds to help meet your long-term goals is a serious thing and going wrong in this journey could be costly. Hence, it may be wise to engage with a good advisor. Before engaging with one, check the advisor’s qualifications and experience. A professional degree like being a certified financial planner or similar degree is of help. The mutual fund advisor should have good knowledge of different asset class such as equity, fixed income and gold. He and his team should be in a position to decipher and understand how these asset classes would be affected by various domestic and international events. This is essential as the advisor would need to advise and identify you on products that will meet your life stage requirements as and when they are needed.

What is his past track record?

It always makes sense to ask for a reference when engaging with an advisor. There is no formal rating or ranking system for mutual fund distributors in India, so far. Hence in this scenario, the best way is to ask around for referrals. Use social media websites to understand the products recommended by them in the past. That will give you some idea of his strengths. Look for how long the advisor has been in the business.

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Is he easily accessible?

While there is no limit on the number of clients an advisor can engage with, a common complaint of investors is that the advisor does not call back or respond quickly to his messages. Hence, it is of utmost importance to entrust your money to a person who is accessible. The advisor or his team should be able to answer your queries in a reasonable period of time and should be accessible by whatever means of communication you choose which could be telephonic, email and meetings.

Can your advisor offer comprehensive services?

Most investors do not want to discuss their finances and investments with strangers. Hence, they want an advisor who can handle their investments with confidentiality. Choose an advisor who is unbiased and can offer you mutual fund products from all the fund houses and not just one or two funds.

How is the advisor compensated?

A good advisor has to be well compensated. Some may use the distribution model, while others could ask you a fee for their services depending on the time they have to spend with you, the level of advice you need or any other personalised requirements. There are many online portals that do help you make a financial plan, by gathering data from you and it could be free, while there are seasoned financial planners who could charge a fee for the same.



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