Fund managers and AMC CEOs give gyan to investors on the discipline of investing and taking help of financial advisors. However, do they practice what they preach?
We asked some AMC CEOs and sales heads to find out if they take help of a financial advisor to manage their investments and got a mixed response.
Financial planning is complex and not just limited to mutual funds. Thus, many AMC officials believe it is a good practice to appoint advisors even if they themselves are from a finance background.
Ajit Menon, EVP & Head – Sales & Co-Head - Marketing, DSP BlackRock Investment Managers says, “I do have a financial advisor. Having an advisor helps me maintain a disciplined approach to investing. My investments are diversified across asset classes. My expertise is limited and this is where my financial advisor helps me.”
AMC officials are not financial planners
There is a difference between financial planners and people offering financial services. “I may be good at macroeconomics and capital markets but I may lack expertise in understanding the sound principles of financial planning,” observes Aashish.
Ajit says, “My financial advisor help us in many ways like selling property, guides me on taxation and help me file tax returns. Advisors certainly bring a lot of value add to the table.”
Unbiased advice
G Pradeep Kumar, Chief Executive Officer, Union KBC Mutual Fund says “I take help of a financial advisor if I’m investing in schemes outside my fund house. Having a financial advisor helps me get a second opinion which is not biased. Although I can invest on my own, I take help of an advisor to execute transactions as it becomes difficult to handle everything on my own.”
The sales head of a foreign fund house says “Yes, I do have a financial advisor who manages my investments. Although I know mutual funds very well but I may not stick to asset allocation and have disciplined approach to investments. A financial advisor helps me focus on my goals.”
Aashish Somaiyaa, Managing Director & Chief Executive Officer, Motilal Ostwal says “There is a misconception that AMC officials are financial experts. But, this is not necessarily true. A financial advisor helps us to invest in products beyond mutual funds.”
Helping hand
Typically, people hold multiple investments across different asset classes. Very often, other family members may not understand or be aware of these investments. In case of the unfortunate event of sudden demise, an advisor can help the family members claim the investments made by the deceased.
AMC officials say that they hire financial advisors so that their family is well informed about their investments. “In case of an untimely death, it is the advisors who can help out the family members to get the details of the investments made by the deceased,” points out Ajit.
While many AMC officials prefer to engage the services of a financial advisor, some manage their money on their own.
Kalpen Parekh, Chief Executive Officer, IDFC AMC says, “I do not have a financial advisor as my investments are limited. But I do take informal guidance from my friend who is a financial advisor for buying insurance.”
Soumendra Nath Lahiri, Head – Equity, L&T Mutual Fund too manages his investments on his own. “I am aware about the sectors I need to invest into. I never felt the need to hire a financial advisor.”
