An investor should differentiate between the multitude of advisors:-
1. Agent / Broker -
a) He takes a narrow view, on few products or goals, as his basic aim is to sell by acting as interface between the investor and the financial services company.
b) He will recommend a product, help with the paperwork, submit documents and complete other modalities, and usually earns only from a variety of commissions.
c) He will often missell products, promoting those that suit his needs, even with a conflict of interest, because of the high commission structure for some products.
d) A thorough research about the pros and cons of his suggestions would be required.
a) He takes a narrow view, on few products or goals, as his basic aim is to sell by acting as interface between the investor and the financial services company.
b) He will recommend a product, help with the paperwork, submit documents and complete other modalities, and usually earns only from a variety of commissions.
c) He will often missell products, promoting those that suit his needs, even with a conflict of interest, because of the high commission structure for some products.
d) A thorough research about the pros and cons of his suggestions would be required.
2. Distributor -
a) He usually runs a firm, small or large, that sells financial products to his clients.
b) Although he advises clients about them, it may not always be in their best interests.
a) He usually runs a firm, small or large, that sells financial products to his clients.
b) Although he advises clients about them, it may not always be in their best interests.
3. Relationship / Wealth Manager -
a) He usually works for a financial services company or a large distributor.
b) Being an employee, who may shift from one organization to the other, he is often more concerned about his salary (and commission) and not the interest of clients.
a) He usually works for a financial services company or a large distributor.
b) Being an employee, who may shift from one organization to the other, he is often more concerned about his salary (and commission) and not the interest of clients.
c) He also, therefore, prefers to service high networth individuals told by his employer.
4. Financial Planner -
a) He usually runs a specialized firm to serve individual clients as per their needs.
b) He prepares tailor-made financial plans for them after detailed assessment of their financial goals, risk profile, financial status, income, expenditure and other factors.
c) These financial plans may incorporate debt, equity, insurance, real estate, gold, emergency corpus etc.
d) He understands taxation and investment regulations and correlates them in the plan.
e) He will also help the client to execute the plan by selecting appropriate investments, and has a vast range of offerings and tie-ups with financial companies.
f) His advice covers the clients' overall financial situation, not investments alone.
a) He usually runs a specialized firm to serve individual clients as per their needs.
b) He prepares tailor-made financial plans for them after detailed assessment of their financial goals, risk profile, financial status, income, expenditure and other factors.
c) These financial plans may incorporate debt, equity, insurance, real estate, gold, emergency corpus etc.
d) He understands taxation and investment regulations and correlates them in the plan.
e) He will also help the client to execute the plan by selecting appropriate investments, and has a vast range of offerings and tie-ups with financial companies.
f) His advice covers the clients' overall financial situation, not investments alone.
5. Independent Financial Advisor -
a) He is a financial planner who usually works on his own, at his competence, sophistication and integrity level.
b) He advises his clients on all financial products, and is more keen and committed to a long term relationship.
c) He generally doesn't have any vested interest in pushing specific products.
a) He is a financial planner who usually works on his own, at his competence, sophistication and integrity level.
b) He advises his clients on all financial products, and is more keen and committed to a long term relationship.
c) He generally doesn't have any vested interest in pushing specific products.