Bharat Bagla
Back in 2010, I had recommended an equity fund to my clients solely on the reputation of the fund manager. After a few years, that fund manager was replaced and the fund started to underperform. To make matters worse, my clients could not exit because it was a closed end fund. I had not done enough due diligence on the fund and whether this fund suited the risk profile of my investors.
So my clients were very upset and I lost a few of them. This incidence taught me that we should not sell funds by solely looking at the fund manager and we should provide enough liquidity to investors. Also, we should always recommend funds based on the risk profile of investors.
Anita Kanbargi
During the 2004 NFO rush, I had recommended a few clients to invest in NFOs of thematic funds. I had also recommended a few infrastructure funds which underperformed. Further, the 2008 market crash led to bigger losses. I could not convince them to stay invested. Due to this bad experience, some of my clients left me.
This experience taught me that we should never recommend sector funds. I also learned to avoid NFOs unless they come with a meaningful differentiation.