Resource id #4Resource id #4 Advisor Interview
25 September, 2022 13:01 IST
Advisor

`Financial planning is not just for the rich`

Source: IRIS Exclusive (24 April 2012)

`Financial planning is not just for the rich`
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In an interview with Pooja Chopra Goel of Myiris.com, Charul Shah, Director, Greshma Wealth Advisors (P) says, ``Whatever you do, don`t let the notion that financial planning is for the rich persist. Financial planning is for everyone.``

Can you tell us about `Greshma Wealth Advisors (P)` and its mission & services? What services do you offer?

We offer wealth management and financial planning solutions to Indian and Non-Resident Indian clients. We help clients in wealth preservation, growth and transfer during various life stages. Our wealth management services are designed for select HNI clients and financial planning services are open to anyone who appreciates the value of planning their finances. We bring to the table an unfailing commitment to business ethics with an assurance of transparency and client-focus.

How many fund houses do you deal with? In which fund house do you have the maximum AUM ((in terms of percentage)? Tell us your favorite all-time MF schemes and fund managers.

We are emplaned with almost all fund houses though most of our investments are into following 6-7 fund houses:

> HDFC Mutual Fund
> ICICI Prudential Mutual Fund
> Birla Mutual Fund
> Reliance Mutual Fund
> DSPBR mutual Fund
> UTI Mutual Fund
> L&T mutual Fund

Favourite schemes: HDFC Top 200 Fund, ICICI Prudential Dynamic Plan, Birla SL frontline Equity Fund, Reliance Equity Opportunities Fund, DSP Top 100 Equity Fund, UTI Opportunities Fund & L&T Growth Fund.

In the wake of Fidelity MF`s asset sale to L&T MF, what are you advising clients with investments in Fidelity MF schemes at the current point of time?

We are suggesting investors not to panic because the existing fund managers will still be around for a while & hand over. We will evaluate the fund performance over the due course and then take a call.

What is one misconception about financial advisors you would want to refute?

There is a myth that financial planning is only for wealthy people whereas the truth is that everyone should plan their finances. Whatever you do, don`t let the notion that financial planning is for the rich persist. Financial planning is for everyone.

How does a financial advisor make his living and is there any conflict of interest between him and his customers?

There are two broad ways in which an advisors earns: fees paid by clients and commissions on transactions.

If an advisor is earning commissions on transactions, then situations of conflict of interest are bound to arise, what is important is how an advisor handles those conflicts. If the advisor`s focus is to build a long-term business relationship with clients then the choice is very simple and clear - recommend products that are good for your clients and not the ones that would give you the highest commission. That is the only way to build and maintain trust of your client and build a long-term profitable practice. It is all about maintaining a fiduciary responsibility towards your clients.

For years the industry has been functioning in a model where advice is offered free and income was earned from commissions. In the last 3-5 years we are certainly seeing a gradual shift in terms of advisors charging fees and clients also being open to paying it. At the same time a lot of clients also want us to manage their transactions, so we have two broad models of client engagement:

> Comprehensive wealth management services which includes advice as well as managing of financial transactions in a very transparent manner.

> Fee-based financial planning advice where the clients are free to execute transactions from anywhere

How would you suggest a common investor ensure that their accounts are protected and not invested in dubious instruments?

They should stay away from get rich quick schemes as there are no free lunches and remember that there would certainly be a catch when someone offers to make money for you easily and quickly. So they can follow a simple rule, either they themselves understand the investment product well or they take guidance from an advisor they can trust. Here, the regulation of investment advisor is very important.

Do you think enough is being done to address the broader issue of financial literacy?

While many efforts are being carried out by various stakeholders to improve financial literacy, but the results clearly show that the efforts have not been adequate. It is the responsibility of every individual engaged in financial services industry to contribute towards it and we all have to do our bit.

Is there anything else you would like to share with our readers?

If you want to get good sleep every night, then make a financial plan for your family and stop tracking portfolio on an everyday basis. This also applies to financial advisors themselves.

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