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The social and economic structure of India is different from that of the developed countries. In India investors are supposed to make their own arrangements for their financial needs in future…

Financial Advisors Interview

On: Nov 26, 2013 | Duration: 1.00 hrs | From: Jigisha Nikhil Shah
Financial Advisors Interview in Advisorkhoj - The social and economic structure of India is different from that of the developed countries. In India investors are supposed to make their own arrangements for their financial needs in future…

Jigisha Nikhil Shah is a practicing life insurance advisor for last 12 yrs and mutual fund advisor for last 8 yrs. She is a CFP and a graduate in Commerce and Law. Her passion for financial planning started while planning the future of her own son. Now, she provides all type of financial solutions to her clients as per their needs and goals at different stages of life from birth to death including estate planning.

What are your views on the current state of awareness on financial planning?

Investors in India are not completely aware about the merits of goal-based financial Planning. There is a lack of awareness about financial events. They are more concerned about expected events ignoring their awareness of financial planning for unexpected events. For instance, a fatal accident of a family member, loss in natural calamities, loss in business, loss of job etc.

Do you think that the need for financial planning in India is different compared with other countries, especially the developed world?

Yes, as the social and economic structure of India is different from that of the developed countries. In India investors are supposed to make their own arrangements for their financial needs in future, especially after retirement, except Government employees while on the other hand investors of the developed countries are covered with Social Security System provided by the government, for instance in Australia there is Superannuation Plan, in USA plan 401k , etc.

All the investors whether they get government aids or not need to have proper financial planning, but the requirement and pattern of planning are different for the investors of India and for the investors of developed countries.

How long have you been in the financial advisory industry? During this time in the industry, what are the five common investment mistakes that you have observed?

I have been part of the Insurance industry for 12 years and Mutual Fund industry for eight years. By the course of time I have experienced many mistake done by investors, some of them are:

Only purpose of Tax Planning: The very first mistake that I have observed is that investors do not take keen interest in investment except tax planning.

Timing the Market: Investors take deep interest in share market and put their money in mutual fund with pre decided timing.

No Goal Specific: Generally most of the investors do not have specific investment goals; hence they are not serious to stick to the investment for a specific period.

Lack of Knowledge: Due to lack of knowledge, investors are likely to commit mistakes in choosing investment product or asset.

I know everything: Investors believe that he/she doesn’t need the help of an expert because he feels that he is the best person to decide his investments.

What basic investments that a client should do during his first four years of employment?

In the very first year, a person should plan his investment for ‘Emergency fund’, at least an amount equivalent to six times of his monthly expenses. He should have a health insurance and if he has family, then he should have a life insurance too. He should invest a part of his income that is atleast 10% of income in such instruments, which can get returns more than Inflation.

What is the procedure you follow when you meet a new client?

I always try to build a familiar atmosphere with the prospect from the very first meeting to encourage him/ her to open up with me so that I get a general idea of the current financial status.

Then, I make them aware about the need of financial planning at any stage of life. After the investors understand the potential of financial planning, I help them to set short term and long-term goals and try to remove fear and myth of investments. Lastly, I help them to start setting goals and fix up the date and time for the next meeting.

What services do you/your firm provide? How do you charge for your services, and how much?

I provide all type of investment related services like assessment of previous investment, need based current investment, services related to KYC, Pan card and other technical procedures, necessary changes in investment if needed on regular basis, provide and explain the actual need of both life insurance and general insurance and set the planning accordingly.

I have also adopted practice to charge my client after considering type of services, volume of investment, frequency and other help.

What value addition does the client get after paying a fee?

I have set a practice to review the financial plan of my clients at regular intervals and do necessary changes in plan if required.

I provide my clients all type of on line services regarding their past and present investment and try to keep transparency.

I regularly make them aware of new products, upcoming products, changes in investment related regulations, positive or negative impact on his/her investment due to unexpected news or changes in economic condition in the country and help to reform the financial plan if needed.

How would you differentiate your service from the other advisors?

Education and knowledge sharing through social media like Facebook, writing articles on blog on different topics related to finance.

I like to make presentation in a simple way of complex calculation of the product and comparison of different products through power point presentation or excel sheet.

What are the few golden rules of investment that you would like to share with our investors?

Golden Rules:

Actual investors should never time the market and give enough time to their investments to grow and get the ripe and sweet fruits in the form of handsome returns.

Your investment pattern should be goal specific and you need to stick to it until you achieve them.

Do not follow the crowd; follow the instructions of your Financial Planner.

Always diversify your investment by spreading them in different asset classes Put your regular saving in Auto mode [SIP] to keep the regularity and consistency in investment to fulfill desired goals.

Keep in mind that one should have to do at least 10% of increment in his/her Investment every year.

Most Important: Start your investment as early as possible – DO IT Now!

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