Table of Contents
- Fee-Only Financial Planner India – Why to hire a fee-only financial advisor in India
- Types of Financial Planners in India
- Fee-only or Advice-only Financial Planner
- Commission Based Financial Planner
- Fee-Based Financial Planner
- Where to find a real fee-only financial planner in India?
- Online Fee-only or Advice-only financial advisor
Earlier we are used to getting financial advice from insurance agent, mutual funds advisor, banks, investment management company.
Fee-only financial planner India is getting media presence nowadays and it increases their popularity and demand. In western countries, people trust fee-only financial advisor.
Nowadays people read articles about personal finance, financial planning, wealth management, various investment options.
Nothing is free in this world. People are concerned about hidden fees associated with any financial products. Sometimes people need financial advice and don’t want any financial products.
Due to limited financial education in India, people are not able to get the right financial planner who guides us and prepare a financial plan according to client needs.
There are many reasons to hire a fee-only financial planner in India. I am just giving 6 reasons so that you can decide whether commission-based or fee-based advisor or fee-only advisor is good for you.
Fee-Only Financial Planner India – Why to hire a fee-only financial advisor in India
1. Zero commission mutual funds advisory
This is the number one reason that fee-only financial planner does not take any kind of remuneration from any company. They recommend you mutual funds schemes which come in the direct plan.
They don’t associate with any insurance company, mutual funds company. They are paid by their clients. Their source of income is a fee from the client.
A fee-only financial planner has to disclose the fees charged to their clients. On the other hand, a commission-based or fee-based financial planner does not disclose how much commission they get from the financial products being sold to their clients.
3. Client-focused not product-focused
If you know that your advisor is pushing you a product it means they are product-centric and want to earn revenue while pushing the product rather than client-focused.
A fee-only financial advisor is not product-focused; they are concerned about your financial situation and help you to provide optimum financial advice.
4. Conflict free financial advice
It is difficult for an advisor to provide unbiased financial advice. Selling you a product increases the conflict of interest because the advisor knows which financial product has a high commission and may recommend you to buy high commission product.
Fee-only financial planner eliminates it because of not selling you or pushing you to buy any financial products.
5. Fiduciary to all clients
Fiduciary means put customer/client interest ahead of advisor interest. Advisor interest may be to push you those products which you don’t need or required. Hence fee-only financial advisor is always fiduciary to their clients. They always put the client’s interest ahead. So always choose financial advisor who are fiduciary to all clients.
6. Fixed Fees
There are several models of fees in fee-only financial planning. One can charge Fixed yearly fees, others can charge hourly consultation, percentage of assets under advisory and your net worth. A monthly retainer is for millennials who do not have many financial assets or who has started their career.
Financial Planners are mainly divided into three categories. The first is fee-only financial planner, the second is a commission-only financial planner and third is a fee-based financial planner.
Compare cost of financial product (including insurance polices) and hire an advisor who are unbiased, cost-effective and provide advice-only financial advisory to clients.
Fee-only (Advice-Only) financial planner
Fee-only or Advice-only financial planners provide financial advice to people for a set fee. They are not reimbursed by any financial companies whose products they recommend. There is no commission. The main advantage of using a fee-only financial planner is that you receive unbiased financial advice. They are also called unbiased financial advisors in India. Fee-only financial planners can work with any individuals because they can also charge with individual requirements.
Fee-only model of financial advisory services reduces the potential conflict of interest between financial advisor and individual because the financial planner is not associated with any mutual fund companies or insurance companies. A fee-only financial advisor provides support on how to invest for financial goals.
Commission-based financial planner
Commission only financial planners provide financial advice when individual buy any financial products from advisor which generate commission. Type of financial products includes mutual funds, insurance policies and other investments. The big disadvantage of commission-based financial planners is the conflict of interest arises from financial product recommendations.
Commission only financial planners work for insurance companies, brokerage companies, mutual funds companies.
Fee-based financial planner
Fee-based financial planners earn both commission and fees from an individual. They get a commission from investment companies or insurance companies for the product sold. On the other hand, they charge a certain amount of fees for a financial plan or financial planning for the individual.
Online or digital Fee-only or Advice-only financial advisor
All fee-only financial advisors assist their clients remotely with the help technology.
You can email us regarding your personal finance. We provide the best possible solution to your financial needs.
As of now, we would serve people who are looking for fee-only financial planning in the Indian context.
Financial planning is a continuous process in which you engage with your financial planner. Take the proper time to choose a good financial planner.
Many a time people fail to understand what are their financial goals and what do they want in their financial life. A fee-only financial advisor will help you to discuss those aspects of your financial life.
A fee-only financial planner in India must be SEBI Registered Investment adviser. Only SEBI registered investment adviser is authorized by the regulator to take fees for financial advice.
Check your advisor credentials as you check other professionals (Doctor, Lawyer, Chartered Accountant and Architect) credentials.
If you still confused about whether to hire fee-only financial advisor, read more about fee-only financial planning and take the next step to increase your financial knowledge.
I am Devendra Negi. Founder of Negi Financial. If you are looking for a fee-only financial advisor or planner near your city, you can contact me directly and book a free one-hour consultation call and discuss your current financial situation and what are you looking for?
Recommend your friends to a fee-only financial planner and share our contact details so that they can contact me.