Why some agents pay your first year premium ?

Posted on January 30, 2012September 9, 2019 by Jagoinvestor

While replying to some of the comments 2 days back, something caught my attention. One of the reader wanted my opinion on what he should do with his Jeevan Saral Policy for which the first premium was paid by the agent and future premiums were to be paid by him. As this happened recently in Jan 2012 only, the first premium had been invested (by agent) and he had to pay his future premiums (monthly). What caught my attention is that his agent paid his first month premium.

In addition to this i recently taken Lic Jeevan saral policy in the month of Jan 2012 (First premium payed by agent) and i need to pay from feburary 2012 thru ECS. After i read the article i realized the returns will 6 ~ 7%. My doubt is.. Do lic returns 6~7% any proof or evidence? If it is sure 6 ~ 7% what i need to do whether to continue or stop? (source)

You might be aware that many agents offer to pay first month premium and at times the whole first year premium. Many a times hungry investors shamelessly ask their agents if any pass-back can be earned out of it! So in such scenario, agents have to pay premiums from their own pocket. Now to many of us this whole “agent paying premium” might look very shocking and confusing because what can be the reason for an agent to pay your premium? So lets see why this happens.

Agents get commissions out of your premiums

One reason as to why an agent might be ready or eager or forced to pay your 1-2-3 months of premiums is because he earns commissions out of your premium. He earns around 25% of the premiums as commission in first year, 7.5% in 2nd and 3rd year and 5% for all the other years. Hence agents can safely afford to pay up to 25% of the premiums (which he gets back in form of commission) from his own pocket. So he can pay up to 3 months of premium without loosing any money.

Because of the competition and wrong attitude of clients

Another reason why most of the agents are forced to do this is because of the competition in the agent business. If one agent does not offer the pass-back of premiums in form of paying the first few months of premiums then some other agent will and the agent will lose the customer and all the future commissions he might have earned. Even the customers want to choose agents based on how much commissions he can pass back to them rather than how he will serve his clients. While writing this article, I came across this yahoo answers link where the question topic was “Where Can I find a LIC agent who returns the commission?” and then these clients will blame agents for miss-selling.

Purely as a bait to the client

Who in India does not like the word FREE? When someone else pays your premium, you are so tempted to take it and ignore the fact if it’s really a worthy product or not. So if the agent feels that a client might be interested in a product, well and good. If he feels a little hesitation or sees that a client might get stopped because of some reason, then an offer of paying first few months premium is really an ace move. That really stumbles the client’s rational thinking ability.

Because it plays with clients psychology

It’s very simple. I don’t need to sell you anything, just start the policy and pay first 2 months premium. I tell you that “Sir, your policy is started, don’t worry for the first premium as I will pay it”. Then comes next month and then I say “Sir, I have already paid your two month premiums now all you need to do is continue it”… So this gives you a feeling that you already got 2 premium payments for FREE. This in a way attracts you to make future commitments and the agent had to part away for some of this first year premium commission, but in a long run, he will make money out of it.

Meeting targets and urge to win incentives

A lot of investors have no idea on this point, but companies have load of sales targets and even bigger incentives for meeting these targets. For example – Foreign trips for top 100 top Development officers, a CAR to the agent selling maximum policies and many more like these. So at times in order to meet these targets and be eligible for those incentives some agents pay the first year premiums for some of the client.

Conclusion

As this trend to pass-back commissions is totally disallowed by IRDA. Its illegal for agent to pay clients premium or give him excessive gifts to lure him in taking the policy. An agent should totally avoid paying his clients premium. Also as a client, one has to understand that it’s not in his best interest to ask an agent to pay their hard-earned money for your policy. In the case an agent is offering to pay your premiums please ignore it!

LIC Jeevan Ankur Review

Posted on January 27, 2012September 9, 2019 by Jagoinvestor

LIC Jeevan Ankur (Plan 807) is the new traditional Children Plan from LIC. It has come at the right time when most of the people look for investing their money for tax savings and given the right time (markets doing bad), it is expected to get a lot of interest from parents looking for parking their money in something safe.

LIC Jeevan Ankur Policy

Jeevan Ankur is a traditional endowment plan where you pay regular premiums and at the end of the policy term the sum assured is paid along with loyalty additions declared at maturity. The nominee in this plan has to be your child (which makes sense), assuming that the plan is bought purely from the point of securing child’s future. (Learn how LIC Policies work)

If policyholder dies before Maturity

In case the policy holder dies before the maturity of the policy, the basic sum assured is payable immediately and a 10% of sum assured is payable each year till the end of the policy term as the income. This is a good option which makes sure some payment is made each year without fail. The premiums are not to be paid after policyholder’s death. Though there is no specific wording about this waiver of premium, it is very obvious.

If the nominee (child) dies before maturity

In this case, the policy holder can nominate another child and other benefits continue as it is. If there is no other child then, the benefits will continue and the maturity proceeds will go to legal heirs.

Optional Riders like Critical Illness and Accidental death benefit.

Apart from base plan in LIC Jeevan Ankur, you can also add two riders in this plan at extra cost. These riders are Critical Illness rider and Accidental Death rider.

Critical Illness rider: One can add critical illness rider for an amount in range of 50,000 to 5,00,000 and in case of diagnosis of some defined illness, an amount equal so critical illness sum assured will be paid. However this is available only if the policy holder age at maturity is below 60.

Accidental Death Rider: One can also get a rider called Accidental Death rider, which will pay additional sum assured in event of death . The maximum sum assured for accidental rider can be upto 50 lacs and the condition is that the maximum age at the time of maturity has to be 70 yrs.

Other Features of LIC Jeevan Ankur

There is option of regular premium payment and Single Premium (one time)
Minimum and Maximum age of the policy holder at the time of taking the policy has to be between 18-50 yrs and minimum and maximum age of child has to be 0-17 yrs
The maximum age of policy holder at maturity has to be 75 yrs.
The maximum policy term is 25 minus age of the child.
No loan facility will be available under this plan.

Surrender value and Paid up of Jeevan Ankur Policy

To surrender this policy or making it a paid up is very similar to other endowment policies, where it attains the surrender value only after the premium payment for minimum 3 yrs and the surrender value will start from 30% of the premium paid (excluding the first year premium). In case of paid up policy, you will get your premiums at the end of the maturity period.

Returns from LIC Jeevan Ankur Policy

Just like other endowment policies even LIC Jeevan Ankur seems to provide lot of features and bundles things in such a way that it’s too tempting, but from investment point of view, its returns are not something to cheer about. Consider this example- If 30 yr old male wants to take a 10 lacs sum assured policy for a 20 yr tenure , the premium would be Rs 41,350 per year (as per the chart on LIC website). Assuming that the payment is done on yearly basis and the sum assured is above 5 lacs, the rebate’s would be 5% (2% + 3%) so the final premium would be around Rs 40,000 per year. So if a guy pays 40,000 per year for next 20 yrs he would then get 10 lacs as sum assured and loyalty additions extra. Loyalty additions generally range from 10%-20% of Sum assured, assuming its 20%, the final maturity proceeds would be Rs 12,00,000 .

So if you pay Rs 40,000 per year for next 20 yrs and get back only Rs 12,00,000 , the final return (IRR) turns out to be only 3.7% CAGR return over long-term. Note that the actual IRR would depend on the tenure , if you take the case of 10 yr tenure , then the IRR would be different , but overall the returns from this policy is extremelly low.

Best returns only if death is premature

The policy return would really work out well if the policy holder death is premature, the early, the better. Assume that in the same example as above, if the policy holder dies after paying 2 premiums in that case, the total outgo would be Just Rs 80,000, but his family would get Rs 10 lacs and Rs 1 lac per year as income. This looks very attractive but note that this is the situation whose chances are very less and just because of this point, you can’t buy the policy.

Look at Liquidity also

The only thing which most of the people concentrate is returns from the policy, but one of the parameters to look at is liquidity of the policy too. The biggest nightmare can happen if you need your money from the policy after 2 yr or 5 yrs or 10 yrs. In that case the money you get back is horribly low and that’s where most of the people feel the pinch.

Should you buy Jeevan Ankur?

I am really trying now a days to let you decide on such questions. As I have done this short review its enough for you to decide if you want this policy or not. The returns over long-term are guaranteed only to certain level and a lot depends on loyalty additions. If it’s not good every year, then returns can be extremely bad, else it might be okay. I personally don’t see a reason to invest in this policy. A plain term plan and SIP in balanced funds looks better option to me from returns point of view and definitely from liquidity and simplicity point of view. I hope you liked this review of LIC jeevan ankur

8 graphs on gold price movements (86 years data)

Posted on January 25, 2012August 22, 2019 by Jagoinvestor

Today I want to show you some patterns of gold prices from last few decades. There is no interpretation or conclusion but some findings and observations on gold price fluctuations in India. From last 10 yrs gold has been on a bull run and prices have multiplied many folds. In the last couple of weeks, gold prices have been extremely volatile and some analysts also predict that gold price upside movement is in threat. So I found gold prices for last 86 yrs (1925 – 2011) and did some number crunching and some graphs from which we get some interesting findings.

4 yrs Gold Price difference (absolute returns

I found out the price difference for every 4 yrs period i.e. from 1928 to 1925 (yrs) and saw what exactly was the difference in the prices, then 1929 – 1926 and so on… till 2007-2011. Just to give you an idea, gold price in 2008 was 12,500 and in 2011 it was 26,400; so the price difference was 111.20%. I used these data to plot a running 4 yrs price difference so at any point of time you can see how much was the return in those 4 yrs prior to that point. Note that this change in absolute in difference. The major point to note is that majority people think that gold has performed outstanding post 2000 in a time frame of 4 yrs. But from the graph you can see that in 70’s time the 4 yrs period return was much more than what investors saw in recent time.

8 yrs Absolute Price difference runnin

This one is just like above chart, but this time its 8 yrs price difference. We are trying to catch that was the price change in an 8 yrs period. So for example, price in year 1980 was Rs 1330, then after 8 yrs – in 1987, the price was Rs 2570, which is a 93.23%… So like this I calculated the price difference for all the 8 yrs period and graphed it. There are very less 8 yr holding period when the returns from gold was negative, that happened 50’s and 60’s and just 90’s end.

4 yrs CAGR running

The next chart is the CAGR return chart for 4 yrs time frame and the graph is for running periods… that means 1925-1928, 1926-1929… 2008-2011. CAGR return is the main indicator of the performance of any instrument. If you look at the chart below you can see the ups and downs in gold performance and you can see how gold has performed in short run (4 yrs period) for a long time line. You can see that gold returns touched 20%-25% in 70’s and even in recent time it has performed wonderfully… which we all are aware of :).

8 yrs CAGR running

Then you can see the graph below which shows CAGR return on 8 yr running period. The interesting a little obvious fact is that it hardly gave any negative return in any 8 yrs time frame, only during 50’s and late 90’s it has performed badly.

20 yrs CAGR running

The real test of gold comes from a very long term performance and if we see a 20 yrs CAGR return on rolling basis (1925 – 1944, 1926-1945… 1992-2011), then you can see that most of the times the returns has been in the range of 5-10% and only in the 80’s people got best return if they had bought it in 60’s.

CAGR from 1926 (base year)

This chart is interesting; it calculates the CAGR return of GOLD from 1926 to all the years. I mean CAGR return from 1925- 1926, 1925-1927, 1925-1928 and then 1925-2011… So the base year is always 1925. This shows you what was the very long term CAGR return of gold considering it was bought in 1925. In a way this does not give us very strong conclusion, but still shows us some perspective.

CAGR from 1960 (base year)

This graph is same as above just that the base year taken was 1960 so considering gold was bought in 1960, the graph shows the CAGR return for different holding periods. You can see that apart from those who sold the gold in 80’s realised the best CAGR return, but those who held it for long, still have the returns in range of below 10%.

CAGR from 1980 (base year)

The last chart I want to show is with base year of 1980, you can see that over the long term the returns have converged to 10% & only in the last 10 yrs you can see the returns again going up.

What are your conclusions based on these charts ? What do you think about gold price movement from this point onwards ?

Equifax Credit Report – A new credit score in India

Posted on January 23, 2012August 22, 2019 by Jagoinvestor

Today we will look at Equifax Credit Report given by Equifax – a worldwide credit bureau. It has started giving credit reports and credit scores in India just like CIBIL (read about CIBIL Credit report). CIBIL was the first credit bureau in India that initiated giving credit scores for individuals. Banks and other lending institutions have started looking at these individual credit reports before approving any sort of loans and hence these credit reports have become the backbone in deciding whether or not you will be given any loan now or in future.

What is Equifax Credit Report

Equifax credit report is a consolidated report given by Equifax Credit Information Services Ltd. This report contains details of your past and current credit behaviour. It also has the details about all the outstanding loans and enquires done in the past. Equifax is the second credit bureau in India to provide such credit reports after CIBIL. Just like CIBIL, Equifax Credit Bureau also provides CIR (credit report) and Credit Score + CIR. If you just want a credit report (without score) it would cost Rs 138, however if you need Credit Score (comes with CIR), it would cost Rs 400.

Equifax Credit Report is said to be more useful as it is represented with graphs, pictorial description and better colour coding as compared to CIBIL reports and hence should be more user-friendly for the individual as well as loan/credit approving authority to understand the minutes. As much as 150+ institutions share the data with Equifax regarding their customers credit behaviour (CIBIL has 500) and it has past 48 months of credit history.

What does Equifax Credit Report Contain ?

Your credit report has many components and gives a full overview of different parts of your credit behaviour . Lets see which are those –

1. Identification and Contact Section: Confirm application information with access to the consumer’s name, date of birth/age, address and ID information

2. Credit Summary: Get a quick overview of consumer’s key credit characteristics.

3. Recent Activity: Helps you quickly access consumer’s recent activity including accounts which have gone delinquent, new accounts that have been opened, etc.

4. Account Details Section: Account-wise details of the consumer’s repayment history.

5. Inquiries Section: Details the Inquiries made on a consumer.

What is Equifax Credit Score ?

Equifax Credit Score is a numerical score ranging from 1 to 999 that is assigned to each person. This credit score will determine how good or bad your score is. Higher the credit score, better your repaying capability is. “The risk score is designed to predict the likelihood of a customer defaulting over the next 12-month period. An account is said to be a default when it crosses the 90 days mark of no payments. The score will help banks monitor their loan portfolios,” says Samir Bhatia, managing director and chief executive officer, Equifax.

What makes Equifax Credit Score ?

A credit score depends on almost 600 different kind of variables which affect your equifax credit score , but the top most variables are

Past credit payment history
Current credit usability
Number of credit cards you hold
Number of secured loans you have
Number of unsecured loans
Demographic variables such as address
Your Income

Who can get credit score ?

Equifax Credit score is available to anyone – whether he has any credit history or not. Unlike CIBIL who scores only for those individuals who have some kind of credit history in the past, Equifax scores individuals with no past credit history as the individual being assessed will have some kind of score based on parameters like address, city and income level.

How much does Equifax Credit Report cost ?

It would cost Rs. 138 to get a credit report and Rs 400 to get your Credit Score (along with Credit report). However those who want to monitor it throughout the year can choose an option to get their Equifax credit report 4 times a year for Rs 1,000. Those who are looking for any kind of loan can choose this option as they can monitor their report every quarter.

How to apply for Equifax Credit Report ?

You can follow these 6 steps by step procedure to apply for Equifax credit Report

1 : Download and fill in this equifax credit report application form

2 : Attach a self-attested copy of Identity Proof (Pan Card, voters ID card, driving license, passport)

3 : Attach an address Proof (electricity bill, Telephone Bill,Credit card or Bank Statement, Gas Utility Bill, Ration Card)

4 : Make a demand draft depending on what you want. ( Credit information report (CIR) will cost Rs 138 , Credit Score (with CIR) will cost Rs 400 and a 1 yr subscription with credit score every quarter will cost Rs 1,000)

5 : Send the above documents through Courier/ Regular Post/ Speed Post to – “Equifax Credit Information Services Private Limited , Office Number 2 Ground Floor, Lotus Estate, Madhusudan Mills, Near Peninsula Corporate Park, Shankar Rao Naram Path, Lower Parel, Mumbai – 400013 . Maharashtra , India”

6 : Post receipt and validation of documents, the credit report shall be sent via courier or postal service within 7 working days on a best effort basis.

Other Points to remember

All photo copies should be self-attested
Please ensure that ID card numbers and photographs are clear and visible.
All bills should be within 3 months from the current date.
All ID proof documents with validity dates should be valid at the time of sending the request.
The name and address on the documents should be of the requestor
The address should be clear and visible

Wrong information in your Equifax Credit Report

Incase you find some mistakes in your credit report or any kind of mistakes , you can raise a Dispute resolution with Equifax by filling this Dispute Resolution Form . All you need to do is fill up the form , attach the required documents mentioned in their website and send it to them. Equifax will followup with the banks and try to resolve the dispute.

Equifax Credit Score vs CIBIL score – What it means for you

Now there are two credit bureaus in India, CIBIL and Equifax – So the obvious question is, “Which one is better?” and Does it make sense to have credit score from both the companies? You will be surprised to know that in India many banks are already looking at more than one credit report and are expected to look at multiple sources of information before lending to anyone. So having a credit report and credit score from two credit bureaus will help a lot. So if you have good credit score with both CIBIL and Equifax, it really works in your favour as it’s a double confirmation for the banks that you are a good customer.

Whereas if you have a bad score – “god save you”… It would be extremely tough to get a loan in that case. Also incase there is any discrepancies in the scores then banks can give more weightage to one score and less to other or just choose one score which it feels right. So incase you want to check your Equifax credit report go ahead and apply for it.

Jagoinvestor Book available for Pre-Order on Flipkart

Posted on January 20, 2012August 21, 2019 by Jagoinvestor

Hi Readers . My upcoming Book Jagoinvestor with CNBC Network 18 is now available ~~for PRE-ORDER~~ on flipkart and crossword website. The date of launch as mentioned on Crossword site is 28th Jan. The cost of the book stands at Rs 374 at flipkart and Rs 364 on crossword website. If you pre-order it before launch, you will be among those to get the book first in your hands.

Share & Win a signed Book Contest (10 random winners)

We are running a contest where you stand to win a signed copy of Jagoinvestor Book by Author (thats me) by sharing it on twitter, facebook or on email to your friends. We will choose 5 random winners from the first 100 people and another 5 random winners out of rest of those who share about it. once you share about the Book , all you need to do is register yourself. those who help in sharing the message about Jagoinvestor Book and we will send the copy of book to him very soon. All you need to do is share about the book by click on the link below and share the message on twitter or facebook. You can also share about the book manually on your twitter and facebook

This Contest is Over now

Can you help in Book Promotion

Jagoinvestor Book I am looking for readers who can help me market the book through various means. Incase you can help us in promotion of the book in any ways by mass mailing to your friends, colleagues, sharing it on your forum, writing about the book on your blog, Please contact me . I would be happy to talk to you on that

How to find your Income Tax Refund Status Online

Posted on January 19, 2012September 8, 2019 by Jagoinvestor

Do you know how to find your income tax refund status online? Yes, there is a simple way of finding out the status of your income tax return online. A lot of people are clueless about the refund status!

Now, one can just enter their PAN number and the Assessment year for which the refund status is to be known and get the status update on a click of a button.

check your income tax refund status online

How to check Income tax refund Status Online

All you need to do is go to this website and enter your PAN number and choose the Assessment year and click on submit. This will give you the current status of your income tax refund. You can also track the status of the income tax refund by contacting the help desk of SBI’s at toll free number: 18004259760 or email them at [email protected]or refunds@incometaxindia.gov.in

Note that the income tax refund is valid only if you file your income tax return on time. If you delay the income tax return filing, in that case you will lose the interest on your refund money. I hope you know that filing your tax return online helps one to get tax refund faster than offline return filing.

What can be different types of Income tax refund Status?

1. Change in address

A lot of income tax refunds get dispatched at right time, but they go back because of the change in address. A lot of people keep moving from one place to another and because of this the income tax refund status shows “Refund Cheque returned because of change in address” reason in the status.

Look that the snapshot below

income tax refund wrong address status

2. Cheque Encashed Status

In case one has already en-cashed the cheque which has come for income tax refund, and then he will see the following message in the status box. If you see this and haven’t already got the cheque – you are in problem!

There can be other status also depending on the situation. The above two status’s were just for demo purpose.

income tax refund encashed status

Some Important Points about Income Tax Refund

The State Bank of India (SBI) is the refund banker to the Income Tax Department (ITD). So State bank of India sends the income tax refunds
Refunds are generated in two modes i.e., ECS and paper. If the taxpayer has selected mode of refund as ECS (direct credit in the bank account of the taxpayer) at the time of submission of income return the taxpayer’s bank A/c (at least 10 digits ) and MICR code of bank branch and communication address are mandatory. For taxpayers who have not opted for ECS refund will be disbursed by cheque or demand draft. For generation of refund through paper cheque bank account no, correct address is mandatory.
The status of the refund would be available for tax payers, only 10 days after the refund has been sent by the Assessing Officer to the refund banker.
Refund status can be viewed only if you have received an acknowledgement from the IT department of having received the ITR form.

Did you check your Income tax refund status? If No, then check it soon and let us know what is the status?

Download a Comprehensive Term Insurance EBook – FREE

Posted on January 16, 2012September 9, 2019 by Jagoinvestor

Today we are publishing our first ebook give away. We listed down all the possible things a person want to know about a term plan and made ebook out of it. You can see the cover page of the Term insurance ebook here . Its a 19 page ebook with different term plan related points structured in a easy to understand language. Any one who wants to know about term insurance plan in detail can download this free ebook and read it.

Free term insurance ebook jagoinvestor

You can also give this free term plan e-book to your Spouse who is not on this blog or to those friends and office colleagues who are not ready to go online to read about term plans . This ebook focuses only on term plans and has been written using very simple language. Let me quickly summarize what this e-book contains

Contents of Free Term Insurance Ebook

1. What is Term Plan
2. Tax benefit in Term Plan
3. What is an ideal cover for you?
4. For how long should one take a term plan?
5. What are riders and what do they mean?
6. But term plan does not return the money?
7. Return of Premium Term Plan, is it worth?
8. Free look up period
9. What do premiums depend on?
10. Online or Offline Term Plan
11. Why Premiums for Online term plan are so cheap?
12. What is the best frequency of premium — Yearly, monthly or One-time?
13. Important points while filling up the forms
14. Exclusions in Term plan
15. Servicing and Delay in getting the policy
16. NRI’s guide to Term Plan
17. Agents Commission and why you should not ask a pass-back
18. Will more than one company pay the claim?
19. What to look into a Company – Claim Settlement
20. Complaining about some issue in term plan
21. Give clear directions and process to your family about claim.

Share to Download this Ebook

If you want this ebook. All you need to click on the button below to share it on your twitter or Facebook
All you need to do is click on the button below and share it on your twitter OR Facebook. This will help us reach more people and your friends will also get to know about it. For some users this was not working earliar , but now the issue is fixed and it will work. Incase you are not able to download the ebook, mail me with proof of sharing and I will email you the ebook

THIS EBOOK IS NOT AVAILABLE NOW

Why we created this Free Ebook

We are planning to give away a lot of Free Ebooks like these in this year and we are working on those ebooks . A lot of people do not come online to read about financial matters , but those should not miss out on these useful information, With your help we can reach out to those people and you can be a helping hand in spreading these useful ebook to those. So now its time you pass on these useful ebooks for others. Its your bit of spreading financial literacy.

11 qualities that a Right Financial Adviser should have

Posted on January 12, 2012May 1, 2018 by Jagoinvestor

I start my day as a student of wealth and engage my time and energy to find out ways of expressing myself as a million dollar financial adviser. Half way through my day, I spend time on calls talking to people, connecting with them and helping them along.

I feel blessed being into advisory business and I think that every adviser has in him the potential to show up as a million dollar adviser in his client’s financial life. A million dollar adviser is the one who creates his/her special place in the hearts of his clients. It certainly goes beyond advice and fees.

I want to develop myself and would love to see more and more advisers to show up as million dollar advisers because I know that good and authentic advice has a lot of power in it. You will find three types of advisory services in India:

Sales driven – where the primary goal is to sell as many, high margin investment products as possible
Goal driven – where the primary goal is to help people create a logical, rational investment plan that helps in meeting goals (and they charge a fixed fee for)
Change driven – where the primary goal is to create as much positive change as possible for their clients (which could also involve helping them work with emotional issues / relationship to money issues / etc)

Here are 11 things to look into your Financial Advisor

1. Your Adviser has to be RICH

If he is not rich how will he make you rich? His financial life has to be inspiring and should demonstrate how to live an extra-ordinary financial life. He is rich not just in terms of money but with the overall richness. He is rich with in his thoughts, with ideas, and with speaking and listening. You should feel empowered in every interaction you have with your adviser.

2. Who is ready to give a sweet kick on your ass

True advice may not be always sweet to hear and easy to digest. Million dollar advisors are fearless; they will step forward whenever they see casualness or reasons in their clients. They will fill your financial life with the right rigor. If the adviser really cares for his client than he won’t care how it will look to his client!

You may not like your adviser when he will do this but this will really move things in your financial life. He should be able to tell you the truth. Working with a million dollar adviser is never easy you need high level of commitment and should be willing to pay high fees to receive such high value.

3. Has a clear intention

Nothing happens outside of an intention, by ‘nothing’ I really mean nothing! It is very important to identify the intention of the person you are choosing. Intention is what will convert into actions when you will move forward with your adviser. All the make-up will wear off after a few meetings and the real intention (face) becomes visible.

Watch this video to know the types of financial advisers in India and their roll:

4. Work speaks more than experience or certification

When I started my practice I was really inspired by L Dolan who was a very famous Time Management Consultant. He used to advice mostly companies and groups. He had no visiting card, no brochure, no website, no videos or audio to show his work to his prospects. Yet he had 100% conversion.

All those who contacted him always became his clients. If someone wants to hire him he would send a box full of 500 hand-written heartfelt letters (Transformative Testimonials). This is what he used to do with all prospects and his conversion was 100%. His work would always get him more work.

It does not matter how many plans your advisor has created; what matters is how many financial lives they have changed. Even a new advisor can achieve this, he may have just one client’s work behind him but this one client’s transformation can lead him to become a million dollar advisor.

5. Advice Comes with Money Back Guarantee

A million dollar advisor has full confidence in his work and his ability to advice. If he feels you are not ready to work with him he will say a clear NO to you. He is not needy as needy is creepy. He has the guts to turn your offer down.

It is not the fees that will determine his choice it is your overall attitude that matters to him. Giving a money back guarantee is not to lure an investor or as a marketing gimmick but this is the confidence he has in his own work and his abilities.

6. One who helps you to un-learn

The real change and transformation comes from unlearning and you advisor has to help you attain this skill. This brings a change in ‘who you are’ as an investor as your myths and non-supportive beliefs about wealth creation gets stripped off.

7. Experts connect you with other experts

A real expert always connects you with other experts as he is always surrounded by good experts. If your advisor is a million dollar adviser he will connect you with the best of the experts or companies available in the market with different solutions for you. He will connect you with the best of the best so that things move faster in your financial life.

8. Does not believe in customers are always right

This is one of the best ways to measure your adviser. Do something stupid or commit a mistake and see what your adviser does with it- he is accepting your mistake, or appreciates you or gives you a negative feedback that “YOU ARE WRONG”.

All those advisory who believe in customers are always right are NOT million dollar advisers. They are moving in the market only to get business and to please people and not to serve people.

9. Helps you transform your financial habits

This is one area where most planners and investors do not focus. We are creatures of our habits some are supportive and some are not. Till you do not identify your unsupportive financial habits the world’s best advice won’t help you grow.

10. When shit happens he helps you to convert it into fertilizer

Our financial life is always a mix of good and bad experiences. It is not possible to find a person who always had only good experiences in his financial life. The million dollar adviser helps you grow from your mistakes. He talks about possibilities and helps you win with the cards you have.

Your million dollar adviser will make you okay with all these good and bad experiences and helps you grow.

11. One who Walks the Talk

Financial planners are not movie stars who are free not to use products/service that they endorse. True advice is not given, it is simply shared. Most planners don’t have their own financial plan because investors never ask for it. Your Planner has to have his own finances in place.

He should have his goals in place; and should be having his finances in place, he has his own strategies in place and sees that his financial goals are inspiring, full of life and energy. He has to be a disciplined investor himself. He himself is relaxed in the area of money.

The bottom line is your million dollar advisor is a stand for your financial success. He Helps you win with the cards you have, He will make money when you make money; He will suggest you products that he is ready to buy. Do share your views on the above 11 ways and which one is most appealing to you as an investor.

This week

Decide if you need professional help in your financial life or not?
What kind of advisor you would love to work with sales driven, Goal driven or Change driven? Are you ready to make a financial commitment?
Which of the above qualities you would like to see in your advisor?

This article is written by Nandish Desai and he likes to put his thoughts on Financial Coaching Conversations here on this blog

Saving Account number Portability – Is it Needed ?

Posted on January 12, 2012August 21, 2019 by Jagoinvestor

Saving account numbers will soon be portable in India. Finance ministry is working on this from some time and soon you will be able to change your banks without changing your Bank account number. Saving account number portability will be almost similar to porting your mobile number to different network carrier.

Why people don’t change banks?

A lot of people do not change their banks because there is a lot of headache involved in the procedures. If you change your Bank from ICICI to HDFC, it means you have to change the account numbers at different places (for ex SIP ECS). Also you will have to close the ICICI account
and open a new account in HDFC which means repeating the procedure all over again. These tasks stop people from taking action of moving from one bank to another. However with saving account number portability, you will be able to change your Bank account from bank A to bank B with less paper-work. The procedure is expected to be small as the KYC norms will also be taken care and no there will be no change in the Account Number.

Recently, with the Savings bank rates deregulation and NRE/NRO deposits deregulation has resulted in many banks increasing their saving bank interest rate to 6-7% (example YES BANK and KOTAK bank) and a lot of banks increased their NRE/NRO deposits rates from 3-3.5% to 8-9%, however a lot of people have not considered to change their banks just because of the WORK involved in the opening of new bank account. If saving account number becomes portable then a lot of people might have considered doing this.

Implementation of Saving account portability is a big task!

However this idea looks great to a lot of people, the whole idea of portability is not that easy and there are several challenges in this process. Those are

Renumbering the 500 million bank accounts – There is approx 500 million saving bank accounts in India and these account numbers are 12, 13 or 14 digits account numbers in most of the cases where the first few numbers are for branch code . Now the first task before portability is achieved is that all these account numbers will have to be renumbered and there has to be same format for these. So that your account number after changing the bank is still same. Now how will this be achieved? How much realistic this is and how investors will be able to accommodate this part in their banking life.

Different banks having their own KYC rules – At the time of opening a saving bank account with a bank, it has its own procedure and documentation and they feel that they do the best job in that. When portability comes into picture, there has to be same kind of KYC norms with all the banks and they should feel confident about it, as they would not like to rely upon others KYC. This part would be rather challenging.

Do you feel you need this saving account number portability or is it a stupid idea ?

How to correct the errors in CIBIL report ?

Posted on January 9, 2012August 22, 2019 by Jagoinvestor

Did you come across many errors in cibil report of your ? Was there any kind of mistake in cibil report ? Are you wondering how to clear yourself out of CIBIL defaulter list? Is your name in cibil defaulters ? In this article you will see what can be done to Correct the errors in CIBIL Report and remove your name from cibil ? Firstly let’s understand the type of errors that can be on your CIBIL report. Before that, the first thing you need to do , apply for your CIBIL Credit Report Online

1. Errors in CIBIL Report

Banks keep on updating CIBIL about your credit behaviour on monthly basis. So, at the time of entering some data, it might happen that some human error happens. Even though these are human mistakes, still they are responsible and correctly blamed for a lot of complaints. Let me give you an example – Suppose your outstanding credit was Rs 2,000, but accidentally it was entered as Rs 20,000. Similarly, there can be various things which can get wrong:-

Account/ Loan Type
Account Status
Ownership Type
Date of Last Payment
Date Opened
Date Closed
Sanctioned Amount/ High Credit
Current Balance
Amount Overdue
DPD/ Asset Classification

Remember that each of these little things are very important and different banks can have different criteria and weightage on a particular thing. So getting each thing right is very important for your future loans. Make sure you have them corrected.

2. Mistakes in your Basic details like Name , Address , Date of Birth

There can be at times mistakes in basic details like Name, address, Date of Birth etc… For Example, in my CIBIL report, my name “Manish Chauhan”, can be misspelt as “Manish Chavan” (like all the people in Pune do when they write my name). So if name is misspelt as “Manish Chavan” and tomorrow some real “Manish Chavan” runs away after taking Rs 50, 00,000 home loans, with help of human error, there are chances that this impacts me. Don’t take it lightly incase your name or any other detail is incorrect. The full list of details is as follows

Name
Date of Birth
Gender
Income Tax ID
Passport Number
Voter’s ID
Telephone Numbers
Address
State
PIN

3. Something Does not Belong to you or Has Duplicate Entry

At times you will see things which do not belong to you, it comes into the category of “human error” or actually it might be on your name, just that you are not aware of it, this might happen if your documents are misused by some other person. This happens and has happened with lot of people. So take this seriously. Note that you might not see a recent update in your CIBIL report if you have applied for a CIBIL report within 45 days of a transaction. It takes time to update it in CIBIL report.

How to Correct your CIBIL report

Cibil has an online redressal mechanism for handling the mistakes in CIBIL Credit Report or to correct errors in cibil report, which is called “Dispute Resolution” .

CIBIL report Mistakes Correction

Step 1 : Fill up a Dispute Resolution form

The first step is to fill up this CIBIL Online Dispute Resolution Form. Make sure you put all the information correctly. There is something called as CONTROL NUMBER which you will find in your CIR report, you have put fill this control number in this dispute form along with other details. You will also have to give them the exact mistake and the correct information. The Control Number is a unique 9-digit number found on the top right hand side of your CIBIL Credit Information Report and is generated every time a credit report is generated. Once you submit the form, you will be given a Dispute ID which you can use for future references. This Dispute id will also be emailed to you. The dispute resolution form looks like this

Cibil report mistakes resolution

Step 2 : CIBIL communicated to Loan Provider to confirm Detail

Once you raise a Dispute request, CIBIL first tries to see if it can verify and rectify the details on its own but incase its unable to do so (which will be the case most of the times) it will then forward your dispute request to the loan provider (the bank which issued you credit card, home loan, car loan etc). Once the loan provider confirms that there is an error it will provide CIBIL with corrected data. CIBIL then updates the data and informs you as appropriate. Always remember, it is the duty of CIBIL to help you resolve your request.

Please remember that CIBIL does not make changes to any information on its own. It is only a custodian of information received from credit institutions. CIBIL is permitted to make changes to your credit information only when it is confirmed by the relevant loan provider(s). You will receive an email notification informing of the results for the dispute requested. It takes approximately 30 days to resolve a dispute request. Once the dispute is resolved, you can see the status of your CIBIL report by applying to it all over again. A lot of people wish if they could have a CIBIL Login and Password where they can view their report whenever they want. But that won’t happen soon

I hope you have got a clear idea on what to do when there are mistakes in your CIBIL report and you want to correct them. Just follow the steps suggested and you should be able to correct the errors in cibil report of yours and get out of CIBIL defaulter list !