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9 signs you are getting bad money advice

By P V Subramanyam
Last updated on: June 14, 2015 09:00 IST
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If your Independent Financial Adviser throws all this at you, FLEE... :-)

If you attended IFA meets (where they meet to award themselves 'best', 'gold', 'silver' etc.) and you notice their language you will be shocked! Anyways that is a different post, is it not?

Today let us look at what the bad adviser's language sounds like:

1. Why do you not play the market for some fantastic gains? A guy who talks about my money as 'play' has no business handling it for me.

2. An adviser who says 'buy this now, the product is closing on the 31st...'

He is simply selling a product and has a deadline. YOU do not.

3. We need to review your portfolio on a quarterly basis and adjust annually. Sorry not necessary.

4. We need to buy some 'Put Options' on your portfolio as the short term risk in the market is high. If my portfolio manager said this to me I would be fine... not if my IFA tells me this. Do not trust your IFA to take short/long term market calls. THEY CANNOT.

5. You need life insurance too? Why not combine life insurance and investment? It means having fewer products. By the way did I tell you my wife is a life insurance agent? So we can do all the paper work in my office!!

6. 'Arre do you know I met a HNI (high networth individual) client and I stuck a big endowment plan on him?' Guess what he is saying to the next client?

7. I am an agent for xyz life insurance, my wife for abc insurance, my father for def life insurance... hey you have met a product seller, not an IFA. I am not saying that, HE SAID IT HIMSELF.

8. In our proprietary model we can get you much higher returns from equity with lesser volatility and risk. Our bond funds are in dynamic funds where the fund manager adjusts the duration himself.

9. Jargon dropping. Alpha, beta, gamma, futures, options, calls, tactical asset allocation...

YAWN! If your IFA throws all this at you, FLEE.

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P V Subramanyam
Related News: IFA, FLEE, YAWN, YOU, HNI