Rhyderrr

How would you evaluate a Mutual Fund Distributor in India?

Arguably there is some value being added given not everyone is an expert and ofcourse there are pros and cons compared to Registered Investment Advisors

15mo ago

Sreekanth

Unnamed15mo

I'm an NISM certified MFD, NPS advisor in ICICI PRU, IRDAI licensed advisor. I can answer your question easily.

Ask an imaginary question. How many funds are you going to recommend if my capital is ₹ 25 lakh?
How many funds if my capital is ₹5000 per month and ₹50,000 per month?
Ask him for his own portfolio like Nps, stocks , mutual funds etc.

Someone advising you 4-5 mutual funds is just doing a lottery with you. He is just trying to do a lottery as at least one fund can do better in different times while others may be laggards. So you continue with him. A good advisor will educate you that you don't need so many funds as a mutual fund itself diversifies money into several stocks already.

Check how clear he is in his thought process.

Check what is his strategy vis-a-vis your goals. If he doesn't even ask/take your goals seriously his framework used for clients while advising is not good.

Rhyderrr

Goldman Sachs15mo

One of the issues is that average investor is too naive to challenge MFD. There is an inherent conflict of interest since they are an agent (and there are good ones who actually help clients instead of maximizing fee)

The issue is also benchmarking. First, asset allocation is based on goals - 3 people will do it 5 different ways. Second, fund performance past performance is not always a good indicator.

Sreekanth

Unnamed15mo

In 5-7 years you would become a mature investor. Ideally there should be a review of 6 months once on mutual funds. Just review not shuffling. A good advisor doesn't tinker with portfolio unnecessarily. Whether an advisor is good or not you would be able to make out in the first few months itself. If you are unsure and need some Advisory, you may contact me. I'd be happy to guide. The companies i partnered with pay me and I'm an independent advisor (no sales target or obligations) so i do not charge clients. sreekanthadvisory@gmail.com.