Adviser Alpha: A Guide to Avoiding Costly Mistakes

On a recent morning walk, a friend asked me: "Mutual funds to sahi hai, but why do I need a financial adviser to guide my investment decisions?"

- Ganesh Mohan

He said he could do his own asset allocation, identify funds to invest in based on information and ratings available, monitor his portfolio and transact easily across digital platforms. So, why should he go through the trouble of finding a good adviser? He could not see any value-addition an adviser could provide, and had not consulted one for years. I had to admit that the points my friend made were quite valid. Currently, there are any number of calculators and tools available online to help you assess your risk tolerance, set goals and calculate the SIP amount and tenure that can help you potentially achieve those goals.

Data on most funds is also readily available on several digital platforms, along with their performance records, assets under management, and star ratings. Furthermore, the ease of transacting has improved significantly in recent years. The clear implication is that if an adviser today is only helping investors with these things, their days are numbered.