Category: General

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

We all know that Sushil kumar has won 5 crores from KBC few days back (actually 3.5 crores after tax) and now he is already being approached by wealth managers, relationships managers to advise him on how to “invest his money”. So I want to just discuss my thoughts with you all on how Sushil kumar should put his money at work ? Does he really need a Financial Plan ? Does he really need an advisor ?

Let us see what he can do with his money and how I think he should utilize his 3.5 crores. Given his background and education level and assuming that he listens to me, here is what I would suggest Sushil Kumar.  Divide your money in 4 buckets A (1 crore) , B (1 crore) , C (1 crore) and D (50 lacs)

Bucket A (Security of future)

The first thing which I would tell Sushil Kumar is that he should just keep things simple and simply keep that 1 crore in a Fixed Deposit and let it accumulate there without any complication. This part of his wealth should be there incase THINGS GO HORRIBLY WRONG ever , he can just leave this part as it is for growth, even if its going to increase at a slower pace compared to equity or anything else.

Bucket B (Regular Income and Security of Capital)

I would suggest him to use the next bucket to generate a regular income along with his capital being secure, again there can be many ways of doing this , but considering his background and assuming that he might not be too sure about financial matters , again I would recommend him to put his next 1 crore into a fixed deposit with a monthly or a quarterly payout of interest . This will make sure that his initial capital of 1 crore is secure and he will start getting an income of Rs 65,000 – 70,000 per month (before tax) .

This income of 65,000 – 70,000 will be more than enough for him to live his regular life, thanks to him not very much addicted to junk foods , extravagance and other useless spendings which our generations have. He will surely be left with a lot of money each month or quarter and thats where he can put some money in equity on regular basis . No stocks , no mutual funds , just plain index funds, so that he does not have to bother about funds not performing every year and does not require a short-term review.

Bucket C (Assets creation , Education , Business)

Once his worst case is covered (bucket A) , his regular income is taken care , now he can use the next 1 crore for building a new house for himself and his family , he can also use some part of his money to fund his education and some part he can use to start a new business which can again open a new stream of income for him) . This purpose of this 1 crore is to take care of all the things which he wanted to do in his life. This part is not to save , but to utilize for his aspirations and his dreams.

Bucket D (Enjoying his Life)

I think he should use the last 50 lacs to just blow off and enjoy his life on regular basis which a lot of people just dream of . He should take a vacation abroad first using 10-12 lacs and then rest of the money he can use to go for a regular vacation each 6 month , with 35 lacs he can get a 2.8 lacs a year as interest income which would be enough for him to take 2 vacations a year with whole family 🙂 . The focus of this 50 lacs can be purely for enjoyment purpose because his other area’s in financial life are complete.

Other Suggestions

• Life Insurance is not required for Sushil Kumar because there is no requirement of Life Insurance, There is enough wealth with him and his family incase he is not around.

• Health Insurance would be something nice to have as it would come at a small cost compared to what he has in life, this would make sure that someday if something goes wrong , his wealth is protected against the unexpected expenses.

• He should stay away from any relationship manager , Agents or even Financial Planners as there is more for “Allocation” and less to “Plan” . He has already passed the Accumulation phase and only if he takes care of his existing wealth now, he should do good.

• Because of his less knowledge (assumption) about overall personal finance, he should keep things simple and be with simple products like Fixed Deposits which he understands properly.

Sushil kumar real enemy might not be inflation or ignorance about money, but his own relatives and Bihar goons ! . So what do you think about these suggestions to Sushil Kumar ,? Do you agree with it ? How would you allocate his 3.5 crores if you had to do it ?

Some of you might know about news.jagoinvestor.com which publishes small and crisp “one-paragraph” news on personal finance on regular basis. These are those news items which cant be converted to a full-fledged articles but still are important to communicate to you all. So with this article I am introducing Personal Finance News Blog which has small news items on personal finance on regular basis, you can subscribe to it if you want to read news items on regular basis on your email. I am putting some of the latest developments in personal finance in the month of Oct 2011.

1. Get different interest rates on saving bank accounts

RBI in its monetary policy for 2011-12, has deregulated the interest rates on saving bank accounts. Till now the saving bank interest rate was uniform across all the banks and was decided by RBI (it was 4%) , but now all the banks are free to provide an interest rate which they want. However there is a caveat. On any deposit of less than 1 lac, there will still be a uniform interest rate by all banks which will be decided by RBI, but on deposits more than 1 lacs, banks will have freedom to choose the interest rate they want to give.

Yes Bank has even upped their saving bank account rate to 6% , so if you keep your money in YES BANK saving bank account , you get 6% interest which will be computed on daily basis. This move is expected to bring lots of competition among banks and hence decrease their profitability too.

2. No more pre-payment penalties – says National Housing Bank

Housing finance regulator National Housing Bank (NHB) has directed all housing finance companies (HFCs) to stop levying penal charges on customers for pre-payment of home loans with immediate effect. These prepayment penal charges are levied mainly by the private sector banks and housing firms and could be as high as four per cent. The move is expected to provide relief to lakhs of home loan borrowers from HFCs. National Housing Bank (NHB) regulates 54 housing finance companies, including mortgage major HDFC, LIC Housing Finance and Dewan Housing Finance.

“The move benefits only HFC borrowers at present. But if the move spurs the Reserve Bank of India (RBI) to follow suit, that will relieve all the borrowers, including home and auto loan borrowers, from the prepayment charges,” said a personal finance advisor, who wished not to be identified. “The pre-payment charges were restraining customers from moving around,” NHB chairman and managing director (MD) R.V. Verma said.

3. RBI raises repo and reverse repo rates by 25 basis points

RBI today increased repo and reverse repo rate by .25% or 25 basis points. Repo rate now stands at 8.5% and reverse repo rate is at 7.5%. Repo rate is the rate at which banks borrow from RBI , which means that this extra .25% might be passed on to the end customer which will increase the home loan EMI’s and other EMI’s too.

In the last 18 months there has been several hikes in interest rates , which has pushed the rates by 5.25% from the bottom. This has increased a lot of pressure on those loan payers who were on fluctuating interest rates . Also RBI has pointed out that this might be one of the last leg of interest rate hikes and from here on the rates might decrease in long terms.

4. Federal Bank and Oriental Insurance launch Pravasi Insurance scheme

Federal Bank has partnered with Oriental Insurance Company to launch a mediclaim policy for the NRI community, ‘Fed Oriental Pravasi Insurance’, which will offer NRIs a cover for normal hospital expenses and unforeseen events such as repatriation and accidents. The policy also includes a legal/litigation cover, hospitalization cover, personal accident cover and a medical floater cover for family members, besides maternity benefits.

All new NRI customers, who maintain a minimum balance of Rs5,000 or more are eligible for the insurance coverage. Medical floater cover for family is available in the event of death or disability of the insured for Rs 10 lakh. This policy provides cashless treatment facility at more than 3,000 hospitals.

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