Why did I choose to be a fee only financial planner?

One simple reason. I want to serve you with my interests aligned to yours, ABSOLUTELY.

As you might know, I have been into investment advisory in a previous avatar. I have witnessed, there is a major trust deficit in the financial services space.

You have been hitherto dealing with agents who sell your products – mutual funds, insurance, etc.. The question that you need to ask is whose agent are they? Yours? Unlikely. Because whose agent are they depends on who they are paid by?

The agents and distributors are compensated by the mutual funds, insurance companies, etc. In that sense, their true masters are the organisations who pay them. Not you! I emphasise NOT YOU!

For too long transaction agents, the sellers of financial products, have been mistaken as advisors. It has been believed that they act in client’s best interest. But that is just not possible! There is an inherent conflict of interest in the interaction with your advisor, sorry agent.

You can never even hope to get unbiased, reliable advice without removing this conflict from the picture. You have to differentiate between advisors and agents.

So, as I said, I want to totally align myself and my interests with your well-being. As a frequent reader of this blog, you will know my approach towards money and investments.

My fee or any compensation for the advice comes from my clients only. I do not NOT earn any commissions or brokerage from the sale of any investment product, whatsoever. I intend to keep it that way – a fee only financial planner.

One simple step towards this is that I will ensure that you do your transactions in as close to zero cost as possible. For example, direct plans of mutual funds.

Now, as a fee only financial planner, I subject myself to regulatory supervision too.

I am registered with SEBI

My intentions matter more than anything else. However, SEBI would not allow me to practice as an investment adviser or financial planner without the registration. I got myself registered with SEBI in Oct 2015. My registration number is INA000003643.

SEBI further requires to implement several measures to ensure that the ‘Investment Adviser’ acts in the best interest of the investor clients.

To that effect, registration with SEBI brings in several sets of duties and responsibilities for the Investment Adviser. I list some of them below.

1. An investment adviser shall act in a fiduciary capacity towards its clients and shall disclose all conflicts of interests as and when they arise.
2. An investment adviser shall not receive any consideration by way of remuneration or compensation or in any other form from any person other than the client being advised, in respect of the underlying products or securities for which advice is provided.
3. An investment advisor shall not enter into transactions on its own account which is contrary to its advice given to clients for a period of fifteen days from the day of such advice.
4. For risk profiling, investment adviser shall ensure that it obtains from the client, such information as is necessary for the purpose of giving investment advice, including the following:-
   1. age; income details;
   2. investment objectives including time for which they wish to stay invested, the purposes of the investment;
   3. existing investments/ assets; liability/borrowing details;
   4. the risk a client is willing and able to take, including assessing a client’s capacity for absorbing loss;
5. An investment adviser shall maintain the following records, for a minimum period of 5 years and subject to yearly audit, which can also be inspected by SEBI:
   1. Know Your Client records;
   2. Risk profiling and risk assessment of the client;
   3. Suitability assessment of the advice being provided;
   4. Copies of agreements with clients, if any;
   5. Investment advice provided, whether written or oral;
   6. Rationale for arriving at investment advice, duly signed and dated;
   7. A register or record containing list of the clients, the date of advice, nature of the advice, the products/securities in which advice was rendered and fee, if any charged for such advice.

This was just a summary.

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I have had the fortune to be associated with investor clients who have placed their trust in me. And I am glad to have served them and earn their trust.

I am currently based in Pune, India. I serve clients for goal based planning and investment advisory in various cities/countries including Delhi/NCR, Bangalore, Pune, Hyderabad, Mumbai, Chennai, Kolkata, Singapore, UK, UAE, Dubai, etc.

I would like to end this note by saying that you have inspired me to reach this journey so far. Thank you for being a part of it. As we move forward, I hope to have your company.