What is the right business model? | [Part 1/4] Selecting An Investment Adviser


Hello Friends, Greetings from Mitraz. Hope you are having a good day I talked about tips of being a Prudent Investor
in my last video. If you do not have time to manage your investments
and would like to get an independent and objective perspective on your investments, then you
need an Adviser. But how do you select an Adviser? Start with the Business Model. Is your Adviser fiduciary and aligned with
your interests? This can only happen if your Adviser does
not have incentives to sell products. In the past, most financial advisers and distributors
have been earning their fees through product commissions which creates a conflict of interest. By regulation, the commissions paid on your
mutual fund investments are disclosed every six months. Here is an example of the NSDL statement that
captures mutual fund commissions. Since 2013, all asset management companies
that offer mutual fund schemes are required to have the option of Direct Funds where no
commissions are payable to anyone. A SEBI Registered Investment Adviser, RIA,
has a business model to charge a fee directly to its clients and recommend Direct Funds. The recommendations are not based on earning
high commissions but rather suitability to your risk profile and investment requirements. So, while selecting your Adviser –
Rule No. 1 – Select the one who has the RIA license and whose business model is aligned
with your interests. In my next video, I will discuss about the
skill set required in your Adviser. This is Anup Bansal from Mitraz Financial. Helping Clients Realize Their Aspirations!

Leave a Reply

Your email address will not be published. Required fields are marked *