What should a good adviser do for you the client?

Have you ever wondered what all the adviser should do for you?

1. Help you in GOAL SETTING: Not all clients are clear about their goals or about their commitments. One very educated couple recently stopped a SIP without any clue why. It is amazing how when they start investing they have a 20 year view…and suddenly in 6 months somebody tells them why they have chosen wrong funds…and why they should stop. Or how the market is over heated and it is worth waiting for a few months. Most people can ‘articulate’ what they want…and in a few months completely sing a different tune.
2. Create an Investment Policy Statement: Most Ifas do talk about your asset allocation, comfort level with standard deviation, equity, debt, gold – when to sell etc. – the IPS puts it all down in writing.  An IPS should state one’s investment philosophy, goals, guidelines and constraints to be with respect to the management of money. It could also contain details of loans, how the loans will be repaid, the EMI,etc.  It also makes sure that the investments have a structure and discipline.  Every investor should be made to create one, but only a competent adviser is likely to be able to force the issue. A financial plan also makes great sense – and that could go beyond the IPS.
3.  Allocating funds among various investment vehicles and asset classes is the essence of investment management. Asset classes exhibit different volatility, and different interaction effects. The allocation of money among asset classes and among investment vehicles within asset classes will have an effect on the performance of the total investment portfolio.
4. Asset allocation and sticking to some asset allocations during weak periods – midcap premium – for long periods of time midcap can underperform a large cap portfolio. It takes a great adviser to persist with asset allocations that clients find difficult to understand.
5. Risk Management: a person may shift from being a salaried person to being an entrepreneur. He may lose his earning spouse. He or his spouse may be stuck by cancer. All these are major things which change his risk profile. Telling him about risk and changing his asset allocation accordingly is the job of a good IFA.
6. Keeping the Noise out: Market is very noisy. ‘Brexit – should I buy gold?’ or ‘Will oil really go down to $ 22? should I buy copper puts and oil puts?’ – answering such questions is an important part of your work. Even a client who may not want to make any change likes a ‘you need no change’ kinda call