In this era of internet, where everything is available at the tip of the finger, people tend to trust the word of the internet more than the words of experts. Patients question doctors about the prescribed medicines based on information thrown up by Google search.
Similarly, many IFAs face problems with “netizens” questioning their advice repeatedly.
Nevertheless, advisors should explain their clients that Google often gives a generalized response when asked for “best mutual fund” or “top performing fund.” Google analyses past performances of funds and recommends people to buy the same.
IFA Sadashiv Phene told Cafemutual that he regularly comes across such clients and his response to them is Google is not the answer for rational investing. Unlike Google, he answers his queries queries based on his vast experience and judgement and ensures that the response is relevant and suitable for his clients.
For example, the mid-caps and small-caps funds did well in the boom years of 2016-17 but the investors ended up being losers by mid 2018-19. That is why the role of a financial advisor is important as they use their judgement, Phene said.
With easy access to Google, potential investors, especially those new to mutual fund investing, tend to double check the IFAs advice on internet, and if the output does not match, it may lead them to rethink their decision. In many such cases, investors just get immobilized, not knowing the way forward.
Vishal Dhawan, Founder of Plan Ahead Financial Planners said that investors seek understanding which only an IFA can give. Dhawan has also faced such situation with many of his clients but he said that the key is to make investors understand the process so that they can trust you.
IFAs can explain to investors the parameters that they have used in order to arrive at the optimal solution based on their risk appetite, investment goals and financial situation. The process of arriving at the customized solution is important and the client will understand it once you explain it to them, he added.
Finally, internet too has its share of the misinformed, impostors and fraudsters who use the relative anonymity of the internet as a shield to mislead and at times swindle people. Your friendly neighborhood IFA is accessible and accountable!
