X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2018 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
How CFGs Strike A Correct Chord With Clients - Outside View by PersonalFN
  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

How CFGs Strike A Correct Chord With Clients
Feb 17, 2017

According to Karvy Private Wealth's India Wealth Report 2016, the total wealth held by individuals in India grew by 8.5% to Rs 304.2 lakh crore in the year 2016 (see table below).

Investments in financial assets also grew, but at a slower pace: 7.14%; mainly due to subdued performance of equity. Among financial assets, there was reasonable growth in fixed deposits, bonds, provident funds and Small Savings Schemes (SSS); the last mainly due to the success of the Jan Dhan Yojana. Individual wealth in physical assets (such as gold and real estate) too grew sharply at 10.32% vis-a-vis a 2% fall in FY15.

Proclivity: Financial Assets vs. Physical Assets

However, the economy is in for a rocky road after demonetisation, which potentially is a risk to the economic growth clocked. After the World Bank's downward revision of growth estimates for India, the IMF too has reduced growth estimates for India to 6.6% (from 7.6% projected in October 2016) for the current fiscal year 2016-17 citing the impact of demonetisation. "Temporary negative consumption shock induced by cash shortages and payment disruptions associated with the recent currency note withdrawal and exchange initiative," were the primary reasons said the report released recently.

Besides, there are global factors in play such as: 'Trumponomics'; the Federal Reserve's endeavour to normalise interest (as market expectations for inflation have advanced); the onset of the process for 'Brexit' taking pace from end-March 2017; economic slowdown in China; and morose economic conditions in Japan (although there's some optimism reported of late).

In such uncertain times, where the path to wealth creation is full of challenges, it is important to seek the help of a Certified Financial Guardian (CFG) who will advise you with enough care and prudence, much as he would adopt while managing his own money.

There is no dearth of financial advisors in the country. Every one flaunts a certification or two and suffixes his/her name with an acronym. But your financial advisor should be a 'Financial Guardian' who is able to recognise the financial and emotional side of the client / prospect using these simple (yet important) principles:

  1. Transparent and Ethical advice: The advisors who have undergone the CFG certification vouch to strongly abide by the principles of ethics. The major bane among clients/prospects is the lack of transparency - disclosures on the part of financial advisors; for instance their compensation structure. CFGs disclose it upfront thus building trust and putting the clients' interest first. CFGs go a step further. They cement the relationship with their clients by understanding their financial health as well as their investment objectives before recommending any financial products.
  2. Thorough research before recommendation: CFGs conduct thorough research and in-depth analysis of the financial products before recommending it to their clients. Clients can be rest assure that the recommendation would help them achieve their financial goals.
  3. Service oriented approach: CFGs build a team of professionals and experts who address the queries of the clients prudently and effectively in a time-bound approach. CFGs explain the rationale of their recommendation to their clients. The idea is to be in sync with the clients' money outlook and avoid confusion. They are open to queries and patiently invest time to resolve them.
  4. Do not believe in one size fits all approach: CFGs are known to offer personalised and customised solutions. They offer financial recommendations after analysing the risk profile of clients. They take into consideration age, financial goals, income, expenses, etc. before suggesting a solution.
  5. Adopt agile investment strategies: At times, there could be stressful situations such as stock market crashes, economic or political uncertainties, and personal emergencies etc. that could create a lot of anxiety and stress in the mind of the client. A CFG provides a sound coping strategy and mental comfort during such times.
  6. Regular review and support: A CFG regularly reviews the client's portfolio to see if it is in sync with the investment objective. A course correction, if required, is proactively done in consultation with the client. Besides, there's operational support. This hands-on approach helps them earn loyalty and trust of clients.
  7. Ask for an honest feedback: A CFG won't hesitate to ask for honest feedback. He/she would proactively seek it and make necessary changes in his/her approach. The idea is to make the client feel appreciated, respected, and at home.

So hope you recognise the need for a financial guardian, who can handhold you professionally and prudently in the journey of wealth creation. Irrespective of where you stand in your finances, it would be wise to seek a second opinion of CFG.

A CFG commits to adhering to these steps and places the client's best interest ahead of his/her, at all times. It is time to search for one nearest to you and take an appointment.

PersonalFN is a Mumbai based personal finance firm offering Financial Planning and Mutual Fund Research services.

Disclaimer:

The views mentioned above are of the author only. Data and charts, if used, in the article have been sourced from available information and have not been authenticated by any statutory authority. The author and Equitymaster do not claim it to be accurate nor accept any responsibility for the same. The views constitute only the opinions and do not constitute any guidelines or recommendation on any course of action to be followed by the reader. Please read the detailed Terms of Use of the web site.

Equitymaster requests your view! Post a comment on "How CFGs Strike A Correct Chord With Clients". Click here!

  

More Views on News

What They Forgot to Tell You About Sensex at One Lakh (Smart Contrarian)

Nov 29, 2017

Stocks that could beat Sensex returns in the long term.

How to Ride Alongside India's Best Fund Managers (The 5 Minute Wrapup)

Jun 10, 2017

Forty Indian investing gurus, as worthy of imitation as the legendary Peter Lynch, can help you get rich in the stock market.

Have You Submitted Your Tax Saving Investment Declarations? (Outside View)

Feb 17, 2018

PersonalFN explains the care to be taken while submitting tax saving investment declarations.

The Foundation for Sensex 100,000 is Laid (The 5 Minute Wrapup)

Feb 17, 2018

Top three reasons for Tanushree's presentation at Equitymaster Conference to be centered around a possible 30% correction.

Vignettes From Ireland (Vivek Kaul's Diary)

Feb 17, 2018

Bill bonner discusses how the US government have created a phony picture of the real condition of the country.

More Views on News

Most Popular

Here's What You Should Do in this Market Crash(The 5 Minute Wrapup)

Feb 6, 2018

The market correction has provided a golden opportunity to buy five high-quality safe stocks.

As the Market Corrects... It's Time to Buy More(Smart Contrarian)

Feb 5, 2018

The recent sell off in the stock market offers buying opportunity in some quality small caps.

The Era of Easy Money is Coming to an End. What Happens Now?(Vivek Kaul's Diary)

Feb 9, 2018

The easy money policy of the Federal Reserve of the United States, which drove up stock markets all over the world, is ending, with the Federal Reserve looking to shrink its balance sheet.

When Small is Not Always Beautiful(Chart Of The Day)

Feb 6, 2018

Big companies enjoying tax deductions and exemptions have an edge over the small companies.

What Should Mutual Fund Investors Do After LTCG Tax Norms(Outside View)

Feb 6, 2018

PersonalFN explain what investors should after LTCG tax norms.

More

Small Investments
BIG Returns

Zero To Millions Guide 2018
Get our special report, Zero To Millions
(2018 Edition) Now!
We will never sell or rent your email id.
Please read our Terms

S&P BSE SENSEX


Feb 16, 2018 (Close)

MARKET STATS