Whom to Approach for Financial Advice?

Source: The Economic times Wealth, 30/Jan/2012. (Typed down by VRIDHI for the benefit of all)

You need financial advice if…

You don’t have the time to do your own financial planning.

You don’t have the financial expertise to chalk out a plan.

The plan made by you is not working out.


Financial planning is not just tax planning.

Planning needs a goal-based and need-based approach.

Making a schedule is not enough; its correct implementation is equally important.

A periodic review and stock check is must.

Agent or Broker

Takes a narrow view, focusing on one or two products or goals.

Go to him if: Your investment is low (less than Rs.1lakh a year) or if you are confident of choosing the right product yourself.

What he does: He acts as interface between the investor and the financial services company. An agent will recommend a product, help you with the paperwork, submit documents and complete other modalities.

Cost of advice: some mutual fund agents can charge a small transaction fee of Rs.100-150 for investments of Rs.10000 and above. An insurance agent will not charge directly; his commission is built into the product.

Watch out for: Agents and brokers often mis-sell products, promoting those that suit their needs more than yours.

Wealth Manager

Has a broader view of overall finances, but focuses on investments.

Go to him if: you have a large investment portfolio (around Rs.5-6 lakh a year) and you don’t have enough time.

What he does: Chalks out an investment plan for you on the basis of the desired asset allocation and past investments. Also offers services, such as tax planning and filing tax returns, and takes care of the paper work.

Cost of advice: Charges are between 0.5% and 2% of the investment. It could be on a profit-sharing basis.

Watch out for: The wealth manager community has earned notoriety after high-profile cases of mis-selling and fraud.

Financial Planner

Takes a 360 degree view to give you comprehensive financial advice.

Go to him if: You are looking for a complete financial over-haul and or willing t pay for the advice.

What he does: Offers complete planning, which takes into account all aspects of the individual finances. Gives holistic advice that includes investment, insurance, tax planning, savings for goals and retirement planning. Reviews how the plan is progressing every quarter.

Cost of advice: Ranges from Rs.5000 – 30000 for the first year, and then a recurring charge of Rs.5000-10000 a year. The fee is lower if you invest through the planner, who earns a commission on the products.

Watch out for: Financial planning fails if it is not implemented in full and in the way suggested by the planner.

The Fee Models


*Agents and brokers usually earn only from commission. Suitable if your portfolio needs a slight tweaking.

*Commission varies across products, so beware of mis-selling. You may be sold a product with a high commission.

*Find out how much commission is earned by the broker on the products recommended by him.

*You may have to conduct your own research about the pros and cons of the product suggested by the agent.

Fixed Fee

*This model segregates the advice function from the sales. It is usually followed by financial planners.

*Charges differ across planners. A plan’s cost can range from Rs.5000-30000.

*Charges depend on the level of engagement, the quantum of work required and your financial health.

*Apart from the one-time fee, you also have to pay a yearly renewal fee.

*Suits someone who needs a comprehensive financial plan.

Percentage of Investment or Profit

*This model is generally followed by wealth management firms and portfolio management services.

*The fee is a small percentage of the amount invested through them of the profits earned on the investment.

*This method of profit sharing links the interest of the wealth manager and the investor.

*The percentage charged can vary from .5%-2% of the investment.

*Apart from this, the wealth manager also earns a commission on the products sold to the client.

*Watch out for this arrangement because it can lead to mis-selling.

*This model is suitable for high net worth investors.

(click on the image for clarity)

A good Financial Plan will…

Help you realize you financial goals.

Make sure you have adequate cover incase of emergencies.

Help you build a contingency fund for eventualities.

Reverse your wrong financial decisions and take corrective actions.

Aim at Capital appreciation by channelizing your money into the right options.

What to look for in a Planner?

Qualification: Check if your planner has adequate qualification or degree, such as CFP (Certified Financial Planner). In India the CFP degree is awarded by the Financial planning Standards Board.

Experience: Choose a planner who has ample experience. Find out if any of your acquaintances has availed of his services.

References: Search and Check for their profile on the Internet, A Financial Planner should have a presence in the Industry. Ask for references and, if possible, speak to some of his clients about the module. Check if it has worked for them.


*We at VRIDHI are, one of the Best Financial Planners in Chennai and among the Most Reputed Financial Planners in India. We can serve you with our Expertise over Internet/Phone irrespective of the place you may be living in this world. We serve all types of individuals irrespective of Age or Income.

Click here to read about us and to get in touch with us click here.


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