Resource id #4Resource id #4 Advisor Interview
22 May, 2024 17:56 IST

`Fee-only financial advisor is your best bet`

Source: IRIS (10 January 2011)

`Fee-only financial advisor is your best bet`
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In an interview with Pooja Chopra Goel of, Manikaran Singal, founder and CEO, Marvel Investments says, ``Using a fee-only financial advisor should ensure that advice you get is based only on your needs with no conflict of interest.``

Can you tell us about `Marvel Investments` and its mission & services? What services do you offer?
Marvel Investments is a financial planning and wealth management firm based at Chandigarh. We follow a fee based advisory approach with major stress on comprehensive financial planning. Even for wealth management clients, the basics of financial planning are very well taken care of. We have a mix of client base ranging from service class to professionals to business persons and corporates. We believe that every financial decision one takes must be backed by proper research and must impact your overall finances in a better way. 

Who should think about getting a financial advisor? Is it just for the wealthy or can anyone use the services of a financial advisor?
Every person whether wealthy or not so wealthy has some goals in life. To achieve those goals comfortably along with managing the uncertainties of life you have to have a financial planner by your side that takes care of almost all the aspects related to personal finance. So when there`s a requirement of managing the money to achieve future goals by taking properly thought of decisions, hiring a financial planner will pay.

How does a financial advisor make his living and is there any conflict of interest between him and his customers?
There are 3 models on which a financial advisor makes his living - fee-based, fee-only & commission-only. Fee-based financial advisor is an advisor who is compensated both by fees paid by the client and commissions that are contingent on the purchase or sale of financial products. Fee-only financial advisor is an advisor who is compensated solely by the client, with neither the advisor nor any related party receiving compensation that is contingent on the purchase or sale of financial products. Commission-only financial advisor is an advisor who receives only commissions for selling financial services products, such as investments, real estate, insurance products, or loans. Fee-only financial advisor is your best bet. Using a fee-only financial advisor should ensure that advice you get is based only on your needs with no conflict of interest.

What is one misconception about financial advisors you would want to refute?
Financial planning is a specialized profession and thus no other profession can do justice to this. So don`t confuse with the advice you receive from your chartered accountants, tax lawyers, bankers, etc. All these can help you in some other area in which they are expert.   

With the internet and 24-hour business channels, is the average investor being overloaded with information?
This is very much true. But the real problem arises when investor starts treating this information as knowledge and starts acting on that without even considering what his profile and requirements are. Every person is different and so his goals and needs. Thus the solutions provided to someone else might not work for him. Just like in the case of medicines one should not take without consulting a doctor same way one should not invest in a financial product or take any financial decision without consulting financial planner. 

Has the no-load regime affected your business?
Yes. It has increased the value of an advisory business like us. People have started recognizing the difference in advisory and sales. It has become easier to promote financial planning.

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 deal with almost all the fund houses. But there`s no specific fund house which I like, since  while advising to clients besides considering the  performance of scheme and other factors our topmost consideration is client`s requirements, goals and risk profile. Sometimes we don`t even advise to invest in mutual funds but in fixed deposit or PPF etc.  Our favorite fund managers are Prashant Jain and Sankaran Naren.

What`s been the most common reaction from your clients as the stock market has gone on a wild ride? Is there one particular type of investment you recommend that can weather these conditions?
We never advice to invest in stock market with short term view. Moreover most of our clients have got designed comprehensive financial plan for themselves and are following the advise religiously. Thus there`s no tension as to volatility in stock market. Moreover for long term point of view systematic investment plan in mutual funds is the best way to invest.

Is there anything else you would like to share with our readers?
If you are not following financial planning that doesn`t mean that you will not achieve your goals, but by following it you will meet all your requirements very comfortably. Don`t take information as knowledge and make the best use of financial advisor by making him design a comprehensive plan for you. This way you can also keep a check on your financial advisor`s performance and advice.

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