What are the basic qualities your adviser must have?

Today I attended one educational seminar which was related to mutual fund industry. Found time to interact with advisers who are in the field of advisory since long. But sad to see that no one possess a basic skills one must have in a position of advising.

Hence thought to share few point which you as an investor must look into your adviser before implementing his plan of action. What are those basic qualities one must have?  List may be long but will concentrate on the basic things. Here in this post I am mainly concentrating on adviser fraternity who may be product based or fee based or both.

1) Basic language skill-I found so many agents (especially LIC agents) who even dont know reading and writing of English language.  I am not saying that whoever dont know English are totally bad advisers but usually product information are in English. Hence it make advisers to understand products in a better way if they know atleast reading or writing of basic English. If they themself not understand products in depth then how can they give you the solution to your problem?  Hence better you check his product knowledge before entering into any action.

Many people after going through my blog commented me that I use very layman language and I need to improve on that. But I stick myself with this type of writing skill where every one can understand in a better way, even me too 🙂 If you found any wrong in my skill then you are most welcome to put comment on the same post itself so that even others too can’t do such mistakes in future which I did.

2) Knowledge updation-I found lot of advisers not in a mood to update their knowledge rather they concentrate on the business. If one does not update his skill day to day then it is of no use for himself and to you too. Hence Check whether he knows the latest developments about financial world.

3) Analytical Skill-Today you may found so many MBA Finance graduates, CFPs or CFAs who are into the field of advisory. But it is better not to go with the degree or certificate they hold. Instead understanding your problem, analyzing them and providing an right solution is mainly a analytic skill rather than education. Hence you need to check his problem solving capacity before taking into action. I myself feel proud that I am even not a graduate (equavalent to 10+2) but with interest in personal finance learning bit by bit and sharing the same with you all and completed my CFP too.

4) Basic calculation Skill-Especially in today’s meeting I found so many advisers who have AUM of more than 5 Crore but dont know what is CAGR, Absolute Return, IRR, XIRR, Standard Deviation, Alpha or Beta of funds. Then what may be the faith of investors who took these advisers planning and blindly followed? Atleast when one is into financial advisory field then they must have basic knowledge about calculation. You can easily check out this quality by asking few questions about return calculations.

5) Selling skill-Usually you notice few advisers tend to sell the products rather than their knowledge. Hence whenever you interact with advisers and found that their concentration is selling product rather than giving solution then better to stay away. One may have a great selling skill, but if he lacks in finding solution to your financial life then it is of no use.

From above points I made it clear that dont blindly follow any adviser instead test him, check him and question him, then only better to act.

8 Responses

  1. Thanx for your authentic reply.The article is good and valid.I had the problem when you “generalised”..but now you have clarified in the reply.Hence requested to refrain from any generalization as you know it doesn’t works.Once again kudos for yet another good article.

    1. Kranti-Thanks for accepting my ideas 🙂 I never did generalization whenever I target specific community instead I always refer few people. Once again thanks for reviewing my posts in a unbiased manner and expressing your views. Hope you enjoy my future posts too 🙂

  2. I agree with you since I have been in this industry last 27 yrs. In our time it was too difficult to learn, due to lack of Institutes, Training Centers, even books, we only experienced it from our seniors and from people.

    Problem is that we don’t know our purpose of life. Education is not a barrier, barrier is our attitude. I had experience in the past that the faculties of Insurance Training centers were mostly those managers who were failure in their fields.

    I have been attending seminars, workshop, training since 1986 to develop and update myself. Reading of technical books, spiritual books, motivational books, newspapers and magazines are a must.

    One of my students who come for insurance subject, he is an MDRT, he has been in life insurance industry since last 6 years, does not know how to calculate surrender value, paid up value, life insurance contract etc…basic things. I ask him to read loudly, he doesn’t know English. He used to take notes in Bengali, now I insist him take notes in English, problem is to stay in comfort zone. There are exceptional also. I asked do you have computer? He told -yes, I asked – can you operate? He told – No, I’ll hire a person. Then I asked, if you want to communicate with a prospect who doesn’t know Bengali, he told, I’m going to hire a secretary for the same. I was shocked…it’s not a story but a fact.

    Degree is a secondary factor, think of your attitude. It’s not for an argument, but if you are not, please try to change yourself otherwise you’ll be obsolete and useless.

    1. CFP Uttamsenam Kumar Sen-Wonderful real time experience sharing 🙂 Especially I liked your saying “Degree is a secondary factor, think of your attitude. It’s not for an argument, but if you are not, please try to change yourself otherwise you’ll be obsolete and useless”.

  3. did you interact with everybody & still no-one had basic skill ??? I think you might have interacted with few ppl and found them ineffective.BTW how many ppl had attended & with how many you had interacted ?

    1. kranti-I agree that i might not met all. But today’s interaction with few inspired me to write this post. It is wrong to say that all advisers are like. Hence I pointed to few advisers who dont have these skills which are necessary. But whatever the points I raised are valid and in my view each advisers must have these skills. What you say??

  4. It’s A Great Read. I am proud on you and similarly on myself also. I am only clear my 10th board only. But, provide complete solution to my client without having CFP, take my own Awareness Programe for consumers. Thanks For Great Post. Keep it up.

Leave a Reply

Your email address will not be published. Required fields are marked *

For Unbiased Advice Subscribe to our Fixed Fee Only Financial Planning Service

Recent Posts