what financial advisor is not telling you

11 Things your financial planner will not tell you

Do you have a financial planner who manages all your investments??

Do you trust wealth planner beyond limits and just sign where ever he asks for??

If yes, then you ought to read on as there is a lot you need to know, After all, it’s your money!!!

“Finding the right financial adviser is a lot like dating.

You want someone smart, trustworthy, and dependable.

But you also want some sparks—

the excitement of seeing your portfolio grow.”

Financial planning is a systematic approach to understanding your current financial conditions, your future goals, and planning a strategy to bridge the two, i.e. today and tomorrow. A right financial planner makes your journey smooth and fast. A financial advisor is just like a doctor he charts down the path you need to follow. Just like a doctor cannot guarantee perfect health so does a financial planner who cannot guarantee a perfect financial portfolio. He just can show the best path based on his years of experience.

There are close to 11 Lacs people, calling themselves financial planners. They would claim to be capable of doing justice to your hard-earned money. The majority of these are life insurance agents, employees of life insurance companies, relationship managers of banks, tele-calling executives. Most of them have limited knowledge of the financial domain.

CFP / CWM / CFA are real financial planners, who are in real short supply and the number is not expected to rise. In such a situation it becomes really difficult to select the right financial consultant from the lot.

Your portfolio is getting eroded, as the economy is in turmoil.

The fiasco of yes bank, PMC banks, and host of other Ponzi schemes where money has been routed through so-called financial planners. Therefore it makes sense to check the financial planner before handing over any rupee.

 The Certified Financial Planner Board of Standards Inc., the regulatory organization for advisors conducted a survey in June 2011. Americans claim that they have a financial plan found to be untrue. “Opting instead to carry their goals in their head or sketch it out on the back of the cocktail napkin.”

The same is true for the Indian market.

If you have been dealing with financial planner these are the 11 dirty secrets they wouldn’t tell you but you need to know.

1. Financial Planner is salesman

Relationship managers of banks, insurance agents of Insurance companies, and distribution houses will claim to be your financial planner and even claim to serve you for free.

More often than not, it’s the sales commission which they are getting from the insurance companies which drive them to suggest certain products over your actual needs. Financial planners are associated with more than one company and may bias his decision, based on his commitment to the particular company.

It’s not allowed to have more than 1 license. So your advisor would try to have a license in name of his family members or he would pass on your papers to his close member for pure commission. They do earn monthly and yearly contests in the form of rewards like a trip to the Swiss Alps. If it’s disclosed during sale nothing wrong in that. The sale should not happen to win the contest.

2.Too good to true:

Most of the time you would hear only good news from your advisor be it your portfolio or his achievement. That’s a soft way to win over your confidence that you dealing with the best.

Even ace investor warren buffet had a bad spell in his life, so when you’re financial advisor boasts of his grand achievement ask for proofs – nothing wrong in that. He is having all your financial documents, you can also have his achievement papers. Just ask.

3.They are unregulated


Fancy website, the elegant business card doesn’t mean financial planner.

In today’s time life insurance agents who after qualifying a simple examination often define themselves as finance experts. Most of them work in connivance with other agents and try to support their members as and when required.

Chances are your financial documents which are supposedly given to maintain confidentiality are changing hands without your knowledge

4. They are not enough qualified

Even a simple 10th class pass individual is eligible to apply for the license. There are a set of product which can be sold by individuals even though they are not having any license.

No doubt they would be having limited knowledge of the subject and aim would be to make money for themselves, not you.

Make sure your financial planner is at least CFP / CFA / CWM / MBA (Finance) with a couple of years of experience.


There should be transparency of what the commission your agent is generating.

The commission is his right as he is serving and advising you. It’s is not conveyed most of the time. The only thing that is conveyed is the benefit you would be having – that too distorted.

Do ask for the commission he is earning, it will save guard you from having wrong expensive products.

6.Their experience in the industry  

Most of the time your financial planner would try to meet all your financial needs may be retirement, child education, marriage, or new house through one financial instrument only.

Maybe life insurance or mutual fund or real estate. The reason behind such advice is knowledge about that product and industry only.

Be alert.

A true financial planner would be having holistic knowledge of all the financial instruments.

He would give you the option to choose from all based on your risk appetite.

7.Personal meet

In this digital era, everything has moved to smart devices, from the signature on financial documents to policy documents and even pay for the financial instruments.

Though that’s easy and convenient, your financial planner needs to meet you at least every 6 months.

You also have the right to know the person who is managing your funds and his philosophy and ideology. You must review your financial plan before signing.

8.Promises & Guarantee

Stay alert if the financial planner is guaranteeing too much high returns and promises.

Most of the time these promises and guarantees are to induce you to sign the deal.

9.The performance or fixed or sales commission

Fixed or performance-based are the two prime sources of revenue for financial consultants.

You need to ask the same as your planner. As in fixed, he would be getting his revenue and he would not be bothered about portfolio performance, on the other hand in case of performance-based he needs to be on toes to perform and give results to earn his penny.

You should know this.

10.Solution without knowing the problem

Most of the time the planner had in mind what product to push, depending on the commission they intend to generate.

In these cases, they would be least bothered about what your problems are and for what purpose you want to invest.

All they are interested in is money. Before payment, ask them to chart your problem as you have conveyed and link products as a solution to those problems.

11.Support beyond limits

A financial planner role is to help you to reach your financial goals and do justice to your money, nothing more.

Stay alert if your advisor helping you beyond the required level.


A financial advisor is an important individual who would understand your problems and requirement and based on his knowledge suggests the best financial instruments. But in the recent past, their advice has been influenced by lucrative incentives and commission being offered by the financial institution. Above mentioned eleven-point will help you in selecting the right instrument based on your requirement.

Must read article – 10 habits of highly successful investors.

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