In an interview with Pooja Chopra Goel of Myiris.com, Ronak Hindocha, Founder, Futurewise says, ``Portfolio should be reviewed and rebalanced once in a year unless there are extreme market movements like the one we saw in 2008.``
Can you tell us about `Futurewise` and its mission & services? What services do you offer?
Futurewise Financial Planners was founded in May 2011. Our mission is to help people manage and organize their financial life in a refreshingly simple way. The Rs 20-50 lakh group is a crowded segment where we have the private bankers/ wealth managers/ financial planners all chasing them. While the ones below are being neglected. They are subject to poor quality agents and distributors. We are here to bring quality financial advice to the common man. We offer goal based financial planning services to manage money in a holistic manner. We believe managing personal finances in the real world is much harder than it should be. That by giving people the opportunity to organize their finances in a stress-free way we can help foster a community where people are no longer swayed by market movements but are instead focused on their goals. We are focused on bringing this experience to more and more people.
How and when did you join the financial advisory services profession? How would you describe your journey so far?
I joined the financial advisory business about three years back. Before that I was an investment banker working on private equity and M&A deals. The journey so far has been full of challenges but very assuring. There is a huge gap in the servicing and quality aspect and that is the gap we are here to fill.
How often would you suggest reviewing and rebalancing a portfolio?
Portfolio should be reviewed and rebalanced once in a year unless there are extreme market movements like the one we saw in 2008. It also needs to be reviewed midway in case there is a change in the financial life of the client. For example, huge inflow or outflow, addition to the family, job loss, etc.
Can someone get hourly financial planning and tax advice to get a big picture? How do I know if the cost of financial planning is worth it for me?
It does not work in India. It is not in our DNA to fathom an hourly financial advice model for two reasons. Labour is too cheap in India and financial planning itself is not so complicated that it requires someone to charge on an hourly basis. It is not like law where the answer is not straightforward. I believe, unless you have a very complicated financial life anything more than Rs 5,000 towards financial planning is waste of money. Sure, the first year fees can be high because the planner is doing a lot of analysis and manual work but after that it can be lower as things start falling in place.
How does a financial advisor make his living and is there any conflict of interest between him and his customers?
Our industry suffers from in-built conflicts of interest. The financial advisor can make his living either by charging fee or getting commissions through product recommendations or both. Fee-based financial planning is a great step in the right direction, but it by no means eliminates the problems of conflict of interest. There is definitely a conflict of interest no matter what the revenue model is. This is because there are a plethora of products to choose from and each product has a different commission structure.
There are big changes afoot in the financial advisor market with the move away from commission towards fees. What is your take on the same?
It is a welcome move as people have started realising about advice as the way forward. But the problem is much more systemic. Whether you charge a fee or not, the point is when you sit across the table and explain the client about money matters, do you talk sense? Right now that is the biggest problem. Majority of the advisory community do not know how to add value. We need more quality people in the industry. Today, not many consider personal finance advisory a flashy business to be in. But there is money in it.
What is your take on current market situation? What are the key factors that will drive the stock markets in 2012? What is your advice to retail investors now?
It has been dragging on for quite some time now. The reason is that there has been bad news after bad news from various fronts globally as well as domestically. Something like this has never happened before and that too on the backdrop of a global meltdown in 2008. I don`t know what will drive the stock markets in 2012 as we do not predict the markets. But I know what will drive the stock markets till 2032 and the answer lies in the demographic structure of India. The coming 20 years are one of the best years we will see. What happened to US in the 80s will be witnessed by us. We are lucky to be part of this journey. And nobody can take away these 20 years from us. So the advice to retail investors is not to worry about the short terms trends, they are bound to be volatile. Just figure out when do you need your money accordingly start getting out of the market as you approach your goal.
Is there anything else you would like to share?
This message is for my fellow financial advisors. If you are thinking, think big. There are millions of life-insurance/ mutual-fund agents out there - don`t just be one of them. Stand out, do things differently. Create a difference.
Email
Print 
