August 4

How to choose Your Financial Advisor


Finding financial advisors or sales representatives who call themselves advisors, is easy. They are seemingly on every street corner. More than 50 Lakh people in India sell investment and insurance products.  The low entry barrier for selling the financial products has ensured that anyone at all can become an advisor.

The basic expectation from an advisor is that he would offer unbiased advice. But recent interventions from regulator about fixing the code of conduct for these advisors in many industries, has clearly indicated the gap. They have become part of the problem and not the part of solution. You would be shocked by reading my last sentence… but it’s true.

How then can one find a proper Financial Advisor?

Let me share few points which will help you to find your financial advisor. List can be long… but let me keep it simple & stick to top 3 points, which merit attention.


Someone rightly said “To a man with only a hammer, every problem looks like a nail.” For all your financial needs be it- Saving, Children Education or your Retirement Planning an Insurance Agent will be ready with a Policy. Also the agent obviously will only promote his company’s product and may not even know much about other company’s offerings. Similarly with mutual fund agent he will hate to talk about post office schemes, corporate FDs or Bank FDs.

Has any advisor ever told you that you should repay your loan first & then think of investment or you should keep some amount for emergency needs in a savings bank account or liquid fund. Your advisor should follow one principle – “people have one thing in common that they all are different”. He should not try to fit the person into an already tailored coat. He should look at every aspect of client’s financial situation. That’s the only way to give truly customized, comprehensive advice.


Is your Best Interest his Only Interest or something else is cooking in his mind when he is talking to you. Is he thinking about his monthly target or yearly bonus which is dependent on an expensive product being sold to you? If your advisor is working with any bank, brokerage firm, mutual fund house or insurance company, there is a good chance that your goals & requirements are on back burner. His sales pitch is derived/motivated from something else. This type of advisor is very dangerous for any individual. Try to search for an advisor who is genuinely interested in your goal & long term relationship with you. His ethics should guide him rather than his boss & company.

So if you are looking for above mentioned 2 qualities you will mostly end up finding an Individual Financial Planner – but In India the term ” Financial Planner” has been in confusion for quite some time now. In the absence of any local regulation or guidelines, anyone can call himself a “Financial Planner” without having the necessary training, education or certification. There are so many individuals who decide to start putting the term “Financial Planner” in their business cards leaving the public more confused. So here comes the last point which is equally important.


Have you ever tried to find out that what is the education, knowledge & experience of the advisor who is guiding you? Warren Buffett quoted “Wall Street is the only place people ride in a Rolls-Royce to get advice from people who ride the public transport.” That’s true in India also I have seen many people taking stock advice from those who are sitting on terminals or brokers which have zero knowledge about Investments. Employees from bank who have just joined after completing their management course will pose that they know everything related to investment world & they are masters in it.

Best way to find a right advisor is to shortlist few advisors that you feel have good knowledge. Draw a questionnaire – ask some questions that will help you to analyze them. There is nothing wrong in asking these questions. Along with education and experience, ask about his association with financial companies. Is his earning linked to his performance and if yes, by how much? These questions will answer your concerns over his advice.

Finding a good advisor is time consuming but this will decide your financial success. Try to find a good advisor that’s right for you.


Financial Advisor, Financial Planner

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