what precautions mutual fund investor has to take while dealing with financial advisor.?



what measures one should take so as not to get fooled by his/her financial advisor??

what precautions mutual fund investor has to take while dealing with financial advisor.?
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5 Replies to “what precautions mutual fund investor has to take while dealing with financial advisor.?”

  1. Hi,

    Always cross check the previous record of the fund that your are investing into and the way it is diversifying its investment like proportion into epuity and debt it will clarify your rate of return atleast to some extent.

    Thanks,



  2. Check their reputation. Ask yourself why the advice they give is likely to be viable.

    Also, if they work for an investment management company, be wary if they recommend their own products, such as a Vanguard advisor recommending Vanguard funds. They often receive a bonus for enrolling you in these, when, say, the equivalent State Street fund may in fact be your best option.


  3. Avoid NFOs. Most investors think that getting into a NFO is less risky than an existing fund with NAV over 100. If your advisor is recommending such funds – then he is getting more commission on it.

    While investing do not look at the NAV , but look at the performance of the fund in the last 3 years and 5 years.

    Look at the rating of the fund. Value research rating is a safe bet.

    If your advisor is asking you to book profits and invest that money in some other fund – think twice.

    Learn more about mutual funds. Visit http://www.valueresearchonline.com

    Ignorance can be forgiven , but if you want to stay ignorant – then you deserve to be fooled !


  4. Two most important things that you should look for in a financial advisor is his/her knowledge level and his services.
    Dont worry about the front end load as from august 2009 SEBI has scrapped the front end load.
    After you have cross checked the information provided by the advisor to you about the mutual fund schemes and also after you are sure of his after sale services be ready to pay him his fees if you have availed his services.
    Advisors are not thiefs or thugs whose main intension is to fool you. There is no need for taking any precaution, you just need to be little alert while investing even if you are investing in a mutual fund scheme DIRECTLY.
    Gather knowledge about the funds , set your financial goals , do not make adhoc investments , invest systematically and ready to pay advisory fee and believe me nobody can fool you then.





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