How to Choose the Best Financial Advisor in India

How to Choose the Best Financial Advisor in India – You may thank the Securities Exchange Board of India (SEBI), which released the SEBI Investment Adviser laws in 2013 to control the actions of those who identified themselves as financial advisers, if you’re unsure how to choose the finest financial advisor in India.

How to Choose the Best Financial Advisor in IndiaHow to Choose the Best Financial Advisor in India

This law was created to safeguard the interests of investors who had been duped by those who lacked the necessary credentials to provide financial advice. Any person or organisation intending to provide financial advisory services must be registered with SEBI.

You should be able to find the list of SEBI Registered Investment Advisers (RIA) in India on the SEBI website. Although comprehensive, this list does not distinguish between fee-based and fee-only financial planners.

How to Choose an Indian Financial Advisor

There are many people in India who make the claim to be the greatest financial counsellors. In fact, they guarantee a higher return with each successive generation. We would urge people to steer clear of such deceptive claims and get more knowledge about how to choose the top investment adviser in India.

To achieve the title of top financial advisor in India, one must meet the following requirements.

Registered Investment Advisor with SEBI (RIA)

In India, SEBI is in charge of overseeing the financial services and markets. Every person or organisation offering financial planning services is required to register with SEBI. For a comprehensive list of SEBI RIAs, see the SEBI website.

To see the Dos and Don’ts published by SEBI as part of investor awareness, go here. Always check with SEBI to see whether the company you are dealing with is registered.

Chartered Financial Analyst (CFP)

The Financial Planning Standard Board (USA) has been certifying people who meet their rigorous standards for personal finance as Certified Financial Planners (CFP).

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When it comes to assisting people in managing their money, this accreditation is widely recognised as the gold standard and is regarded as such on a global scale. On the FPSB database, you may look for the best financial counsellor in India.

Three Different Kinds of Financial Advisors

Financial Advisor with Fixed Fees Only

A fee-only financial planner is one who receives payment directly from the investor. They charge the investor for the financial plan and advice services. They get no commissions or fees for any of the items or tactics they suggest. When a planner outlines the financial plan’s action items, there is no conflict of interest.

They get no under-the-table payments or kickbacks of any kind. The best interests of the investors have to be kept in mind by these planners, who are required to do so by SEBI and are bound by fiduciary obligation. You can read about the top financial advisors in India here: 5 Reasons to Hire a Fee-Only Financial Planner.

Financial Advisor With Fees

An investor pays a fee to a fee-based financial planner, who may also get commissions from the goods or strategies he or she proposes in the financial plan. There are two fees: one from investing and one from planning.

This raises concerns since there is a chance that the financial plan’s suggested goods might have a conflict of interest. The Investment Adviser laws specify that the finest financial advisor in India cannot collect a planning fee and offer commission-based products to the same customer, hence SEBI has not allowed this.

Those who distribute financial instruments

Diverse financial instruments are sold via distributors. They might be stocks, mutual funds, insurance plans, or any other kind of financial product. Their revenue comes from the commission or brokerage earned when such assets are sold. They are not required to uphold fiduciary duties, which may inevitably result in significant conflicts of interest.

The majority of individuals take advantage of their free services, believing they are not paying anything, but they are unaware that the items they propose come with large commission fees. For instance, such a distributor would advise the standard mutual fund choice over the direct alternative, which carries no commissions.

In addition to the aforementioned, it is good to have a thorough understanding of the financial planner’s investment planning methodology. The top financial advisors in India use the following six-step financial planning method, which is acknowledged to provide higher value and aid customers in reaching their financial objectives.

The kinds of advisors you should avoid

Recommendations Without Risk Profiling for Investments

A solid foundation for a person’s financial strategy is provided by knowing the risk profile of the investor and selecting the appropriate asset allocation for their particular requirements.

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The top financial advisers in India would not give advice without carrying out a thorough risk assessment, so it is recommended to avoid them if they do. Three crucial factors should be assessed throughout your risk profiling procedure.

In order to determine how well you can take risks, we must first determine your income, your net worth, and the number of people that rely financially on you. This will clarify how effectively a person can manage their finances, support themselves, and support any dependents.

The ability to withstand volatility in assets that are tied to the market is necessary to determine a person’s risk tolerance. It’s crucial to comprehend how people make decisions about their finances, including how much they save, spend, and invest, as well as the factors that impact these choices.

The third is to comprehend the need for taking risk, where we recognise the necessary rate of return that an investor must get from investments in order to achieve his or her financial objectives. The need to accept risk would increase as the needed rate of return to achieve objectives would increase.

Provides guarantees of return.

More money has been lost due to human greed than any other reason, and this trend is still going on. As long as investors continue to fall for the promise of assured profits, con artists will continue to create new ponzi schemes. Every few years, one is a frequent occurrence. People don’t appear to take lessons from the errors of others to heart. Avoid those that offer assured returns.

Offers to Get Rick Schemes Quickly

Wealth-building requires time. We take unwarranted risks because we have the desire to get wealthy soon. People fall for tricks that claim investments will double or triple, only to lose all of their hard-earned money to con artists.

It’s crucial to comprehend the power of compounding; if made on a regular basis for 30 years at a rate of 10% annually, a simple monthly investment of 5,000 may grow to 1,00,00,000. Simple, disciplined investing is more crucial than seeking out higher profits.

It confuses you with difficult tools.

The top financial adviser in India won’t overwhelm you with complex tools. Some investors are only content when the advisor regularly introduces fresh items and techniques. They desire to make investments in new instruments because they believe they are only accessible to them.

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In their opinion, simple products like mutual funds and PPF, in their opinion, are not appropriate for them. Without their knowledge, they are given flowery presentations at five-course meals at opulent hotels without realising that they are the ones funding these gala dinners.

Wealth Crafts-SEBI Registered Investment Advisor Information

We are a FLAT FEE-only Financial Planner situated in Bangalore, India, and an Investment Advisor with SEBI registration. We provide personal financial planning services to people, assisting them in asset management and leading fulfilling lives.

All areas of personal finance are covered, including budgeting, risk management, investment management, retirement planning, financial goal planning, tax planning, etc.

Some of you may find it challenging to make the time commitment necessary to acquire the information and skills needed to actively plan and manage certain financial aspects of your life in this fast-paced environment. You may need assistance getting going.

A licenced, certified, and experienced investment advisor may be helpful. Most individuals eventually see investments in isolation, failing to give their behavioural components the proper weight.

We can assist you by putting your preferences, life objectives, and ambitions into proper perspective. We can also assist you by helping you create a comprehensive financial plan that will aid you in a variety of ways.

You may schedule a free consultation call with Wealth Crafts, one of the very few fee-only financial planners in India, to learn more about our fee-only financial planning services.

How can I get in touch with Wealth Crafts?

Clients who reside in Bangalore, Mumbai, Chennai, Kolkata, Delhi, or anywhere else in India or the globe are served by our firm. Most of our customers prefer to hold meetings online using solutions like Google Meet, Zoom Meetings, and other web-based platforms.

Thanks to the growth of technology, it is now simple to meet and schedule a meeting online. To learn how we can assist in establishing a framework for your personal finances, schedule your free consultation call.

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