Jan 01, 1970 3 min read

The Three Questions You Must Ask Your Mutual Fund Advisor

Every investor needs to ask some major questions from the advisors. This blog include three most important ones from them.
Are you going to invest in mutual funds? Do you want to make the most productive use of your money to earn wealth for your future? If yes, then you must hire an efficient and effective financial advisor to handle your money with due care.

Whether you have a financial advisor or you are looking to hire one for your investments, you must be confident on his/her ability to handle your hard-earned money. Making mistakes in this context cannot be accepted because of the money matters involved. Financial and investment planning are comprehensive processes which involve hands-on experience and a strong understanding of tax management, insurance, investments and retirement planning. In a portfolio, all the above parameters are linked, and decisions are made in conjunction with an individual’s income, liabilities, assets and investment goals.

Bearing this in mind, it makes sense for every investor to avail the services of an advisor. It doesn’t mean that they need to believe him/her blindly; rather every investor needs to be aware of where his/her funds are being placed along with the reasons behind it. Thus, you must never shrink to ask the following tough questions from your fund advisor; after all, its your money which is being managed by your advisor and he invest in mutual funds in planned manner.

Question 1: What is the Basis of Your Fund Recommendation?

The first question which must be asked to every advisor is that how many funds does he/she track actively and which AMCs are preferred by him/her. Along with this, dig deeper into his/her black list as well. Moreover, you must ask the reasons for selecting and rejecting the funds.

In case your fund advisor employs some terms to describe the recommendations, you must never intimate them, rather ask for clarity to get a complete idea about the same. Being an investor, it is your right as well as responsibility to stay updated with the research and analysis processes employed by your fund advisor. Furthermore, you must get a grasp as to how the fund has performed over various time frames and how it has dealt with the market volatility.

If you find some other schemes favourable as per your research, you must ask your advisor whether or not you can go for it. In this way, you would be in the position of tracking your investments in the right way and be sure of the returns in the future.

Apart from this, if your advisor is recommending a dividend option to you, then you need to ask him/her what would be its benefit. In case you need to grow your money without regular earnings, then there is no need of going for a dividend option, rather you can opt for the dividend reinvestment or a growth option.

Question 2: How Does the Fund Fit into My Investment Portfolio?

When you start investing by availing the services of your fund advisor, the first thing you do is set a plan. Your advisor designs the investment portfolio as per your investment goals only and parks your money in the favourable schemes. Now, this is the duty of every investor to ask the advisor why he/she has invested the money in that particular scheme; and how that scheme will affect the returns on the portfolio and benefit the investor to accomplish his/her goals. Accordingly, you would be able to understand the reasons behind your investments and get an idea about how your money will fetch high profits for you in the future.

Question 3: How Often is the Fund Reviewed for Analysis?

The very next question you need to ask your investment advisor is how often does he/she review the status of the recommended funds. You must understand that once the recommendations are made, they need not last forever. The fund manager may make some changes in the portfolios which might not match the recommending criterion of your advisor. Thus, they must be reviewed at a regular interval to make sure that the scheme being recommended suits the portfolio of the investors as per his/her investment goal. In case your fund advisor replaces a scheme with some other one, you must quickly raise your query and ask your advisor why he/she did so.

These are some of the important queries which must be raised in mind of every investor while availing the financial advisory services. Our team of fund advisors always provide explanations to the investors while assisting them in investments. MySIPonline is the most suitable platform for every online investor and you too must avail our investing services to experience the convenience and feasibility.

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