MONEY SMART - Dipankar Jakharia

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Things to keep in mind while choosing a financial adviser.

My elder daughter is ten months short of getting her name inducted in the electoral roll. To make her aware of what’s going on politically, we have started discussing electoral politics at our dinner table. This is baseball to her. Something you see on television but have no clue about. To make things difficult for us, she asked, whom are you going to support? I told her, “The best player”. To which she asked again, “Not the team?”

How difficult it is to make choices in our lives! If all the answers were as simple as choosing between a team and its players. But what constitutes a good team? A group of good players, a good coach, good pre-game practice? Or all of the above? She, being a State representative in basketball, bombarded me with all sorts of questions. I had no straight answer. But I was happy that she had all kinds of questions. If you have the question, you will, one day, eventually, have your answers. It is a good start, I thought.

To choose your financial adviser is equally tough. With increasing skill-sets needed to become a competitive financial adviser in this dynamically changing financial world, it is a difficult choice to make. So, here I am, giving you some tips to find a one good for you.

Like a capable politician, a capable financial adviser should posses a diverse skill-set. This, I say, is because a financial adviser is the last-man-contact for all your needs to the financial world. He/she should never let you keep your money sitting idle in your savings account; remind you to file your tax returns before the due dates, and guide you to make your insurance claims when needed. Above all, he should be a good communicator. He should give time to understand you. Only a financial adviser with a receptive mind and with good listening capacity will be able to give you a better solution in your personal finance space. Same is also true with your electoral representative.

Above all, his relentless persuasion should be to make your life easy, not complicated.

In our financial advisory business, most of the time, an adviser tries to clutter your thoughts with jargon and unheard of words. This they do to make you insecure, so that you end up thinking that he is the only saviour you have. Exploitation of your insecurity is the oldest trick to success. Once he is successful in doing that, he has your uninterrupted loyalty. Stay away from an adviser like that. Across all fields important to us, I prefer the one who gives hope.

A good financial adviser should be able to motivate you. Especially to start doing things which you can do easily. You have money lying in your savings account for a couple of weeks, your adviser should teach you how to transfer your money into a liquid mutual fund for that period. Most of the time, insecure financial advisers might not teach you how easily you can transfer the fund with a help of a mobile app. A good financial adviser will try to empower you. He’ll make sure you don’t need to visit him frequently. A confident adviser will teach you the basics, which you can do without making any mistakes. Same is true with our representative.

Like any specialised field, financial advisory has also become very organised, with multiple layers of advisers working together. Therefore, the question is: Which is more important? The team or the player? The doctor or the hospital? I understand that in today’s world, a structured organisation is very important for the success of our aspirations. But my pick will be the individual, not the team. The chances of failure are less when we give more importance to the person, not to the team he belongs to. Eventually he might force the team to give their best.