Fees - if possible one would not not want to pay at all. Be it the school fees, tution fees, doctor fees. Well , but you have no option , but to pay... But for the financial advise... well you think you need not pay at all. ....
You get so much advise ... from the ............media ; friends.. your office colleagues... your relatives ... and each of the stories about multiple growth will lead you into the investments of similar nature.
Why this apathy? Do remember what was good for your friend. need not be good for you. Your risk appeitte, your liquidity needs, may be different from your friends. Moreso, the reason for you to invest based on your needs and requirements and your risk profile.
This is where you financial advisor, if you've found one... should be paid for.
Ideally a fixed fee ( Rs. 10k-Rs.25k) can be paid , if its a purely advisory nature. Alternativley, one could pay a transaction fees of 1-1.5% of the investment amount, with a cap on the higher amount to be piad n a year. ( Say, not more than Rs. 1 lac).
If your advisor also manages your portfolio, again a percentage of AUM ( Assst under Management) - say 0.5% - 1%, with a cap on the maximum amount chargeable as fees can be set . This fee is not in addtion to the advisry fee.
It's adviseable that you pay a fee to your advisor. He's your financial doctor. You do not compromise with the fees when you meet your health doctor. Then why this aversion to pay a fee to your financial advisor. Do rememeber , choosing the right instrument for growth , one which delivers a CAGR return of 15%, viz-a-viz, one which delivers a 9% return on similar investment product, can go a long way in determining your financial health and wealth creation.
No comments:
Post a Comment