Wealth management: The advisor portfolio

Jan 21 2013, 10:05 IST
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If company maketh a man, here are few people who can make you a rich one.  (Reuters) If company maketh a man, here are few people who can make you a rich one. (Reuters)
SummaryIf company maketh a man, here are few people who can make you a rich one

happens almost like routine. They know a lot about insurance, many of them will be experts and while that is an advantage, it is also an inherent disadvantage as insurance is all that they know. You could land up paying a huge amount of premium and have little benefit from the policy itself. A simpler way is that you could have a financial planner who is unbiased and you could then use your chosen life insurance agent to do your product purchases. This is tricky as most financial planner would be agents as well, so check before you take the plunge. An unbiased planner is hard to find.

Non-Life Insurance Agent: Here we need someone who we can trust, who will be there when we need him desperately in times of making a claim, or to remind us of renewals. The person needs to be really efficient. If your agent does not fulfill the above criteria, it is time you think of a change.

Mutual fund agent: There are three categories of people you will find here. One, who knows nothing and are simply product distributors. Buy at your own risk as there is no accountability for his advice. Second, they may be as large as a firm but I suggest that you simply avoid this category. The next is a person, who knows a bit about funds, investments, investment objectives. You could deal with this person by doing a bit of research. The third category is that person who understands risk management, asset allocation, portfolio volatility, who can create a strategy for you with a fusion of your financial goals, time horizon and asset allocation. He is you best bet.

Portfolio Manager or Fund Manager: In this area, most people will sound knowledgeable and that is because they all have the fundamental skills and knowledge of investment management. Per se, their knowledge is good but the slippery ground here is the philosophy of the company they work for. Building wealth is really very easy and is not as complex as it may be portrayed. Avoid philosophies where the focus is on a single aspect of portfolio management such as momentum or aggression or the ones that use complex jargon. Complex ideologies and techniques usually imply more churning, more expenses, more brokerage costs and all this reduce your return significantly. Do business with someone whose method you understand completely and don’t get carried

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