Business News › Wealth › Invest Search for News, Stock Quotes & NAV's

CHOOSE
12:22 PM | 11 DEC LIVE से े िन ी 50 सोने ( एमसीए ) (₹/१० ॅम) यू एस डी/भारती… पोटफोिलयो LANGUAGE
MARKET STATS 34,869 -90.11 10,468 -20.45 31,830.00 -198.00 71.94 0.61 िनमाण करा MAR

7 different sources of financial advice: Which ones can help

you?
BY NARENDRA NATHAN, ET BUREAU | UPDATED: DEC 10, 2018, 11.04 AM IST Post a Comment

Everyone, including friends, relatives, colleagues and neighbours, doles out free financial
Big Change:
advice. But very little of this is useful. Here’s a look at the different sources of advice and
The end of Five-Year Plans: All you need to know
the likely impact these can have on your finances.

1. Mutual fund distributors

Distributors can give only incidental advice, which is restricted to selecting funds for investment. They do not charge a fee but earn
commission from the higher expense ratio of regular schemes. Useful for small investors who can’t afford fee only advisers.

2. Insurance agents
Insurance agents help select insurance policies. While individual agents are tied to one company, corporate agents can sell products
from multiple insurers. They also change nothing and earn only from the commission. Commission drives their advice.

3. Bank relationship managers

Most banks have relationship managers pushing mutual funds and insurance products. The advice is free of cost, but the bank earns
commission on investments. Banks are the biggest culprits when it comes to fl awed investment advice.

4. Stock brokers

In addition to providing a trading platform, brokers also recommend stocks to buy or sell. This advice is also free but the broker earns
brokerage every time you buy and sell. Many stock brokers have also started mutual fund and insurance distribution verticals.

Also Read: Who needs money advice most: Rich, poor, young?

5. Wealth managers
There was a time when only those managing very large portfolios (over Rs 1 crore) were known as wealth managers. Now, even a
portfolio of Rs 25 lakh will have a wealth manager. There is usually a fixed fee (25-50 bps of AUM per annum) or variable fee (10-20% of
 the additional returns earned above a pre-determined benchmark). Some wealth managers also earn commission on products they sell.

6. Robo advisers
This new breed of advisers act as wealth managers for small investors. The advice (on asset allocation, fund selection, insurance plan)
is doled out by computer algorithms and therefore lacks a personal touch. The charges are between Rs 1,000 per annum (for pure robo
advisory) to Rs 12,000 per annum (for customised personal advice).

7. Fee-only advisers
As the name suggests, these advisers don’t earn any commission from the products they recommend but earn a flat fee from the client.
Since these registered investment advisers (RIAs) don’t earn commissions, there is no conflict of interest. However, make sure your RIA
doesn’t run an insurance agency or mutual fund distribution in the name of relatives.

Stay on top of business news with The Economic Times App. Download it Now!

Live Market Industry About Us

News Newsletters Subscribe to ET Prime
Portfolio Commodities Book your Newspaper Subscription
Powered by Mobile Speed Create Your Own Ad
Live TV Blogs Advertise with Us
Biz Listings RSS Terms of Use & Grievance Redressal
Privacy policy

Download it from Download it from Download it from

FOLLOW US APP STORE GOOGLE PLAY Windows Store

Other Times Group news sites Hot on the Web

इकनॉिमक टाइ | ઈકોનોિમક ટાઈ સ | Pune Mirror | Bangalore Mirror | Ahmedabad Mirror |
ItsMyAscent | Education Times | Brand Capital | Mumbai Mirror | Times Now |
Indiatimes | नवभारत टाइ | महारा टाइ | ಜಯ ಕ ಟಕ | Go Green | AdAge India
| Eisamay | IGN India | NavGujarat Samay | Times of India | Samayam Tamil |
Samayam Telugu | Miss Kyra | Bombay Times | Filmipop | Games App | MX Player
Living and Entertainment
Timescity| iDiva | Entertainment | Zoom | Healthmeup | Luxpresso | Gadget Reviews |
Titanium & Platinum Credit Card | Online Songs | MensXP | Hotels | Travel
Destinations | Cricbuzz | Recipes | Gaana | Happytrips | Getsmartapp
Interest Network
itimes
Stock market crash | GST | Rupee | Aadhaar Card | Delhi News | RBI | Mumbai News |
How to save Income Tax | Sensex Today | Nifty Bank | Telangana Elections | Income
Tax Calculator
Services
Book print ads| Online shopping | Matrimonial | Astrology | Jobs | Tech Community |
Property | Buy car | Bikes in India | Free Classifieds | Send money to India | Used Cars
| Restaurants in Delhi | Remit to India | Buy Mobiles | Listen Songs | News |
TimesMobile | Real Estate Developers | Restaurant Deals in Delhi | Car Insurance |
Gadgets Now | Free Business Listings | CouponDunia | Remit2India | Techradar |
AliveAR | Getsmartapp App | ETMoney Finance App | Feedback | Auto

In Case You Missed It

LTCG Calculator Aadhaar Card

How to apply Pan Card How to link Aadhaar with mobile number

HRA Calculator PF Balance Check

How to update Aadhaar How to link Aadhaar with Pan

How to file ITR Calculate Gratuity

Sukanya Samriddhi Yojana Calculator IFSC Code

Copyright © 2018 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service