etter to be disappointed now rather than sorry later on. While this applies to all of us, it is especially relevant for financial advisers. In the current market, advisers face a lot of competition and always try their best to provide clients with what they need. But is that enough? Sometimes, it is important to say no to customers. And it is mostly for their own benefit. Let me explain with a couple of examples.
One of my clients had been contemplating moving out of mutual funds, into certain regular return investments, due to a change in his tax status. Under the new tax status, unrealized gains on investments in a calendar year would be taxed. It’s been 6 months since we started discussing this issue, during which the client also sought the advice of various institutions on where to invest. Given the higher quantum of funds involved, most institutions suggested products like alternative investment funds (AIFs), structures, preference shares, perpetual bonds and company fixed deposits. However, due to liquidity and concentration risk in all the above instruments, my advice was to stick to mutual funds and choose the dividend option to help minimize tax on the NAV change.
