Like we tend to say, Let’s get to the root of a problem and fix it in totality.” The same applies to our investments and Financial Planning. We all want to own the best products in our portfolio but as it turns out the reality is actually far from it. We then hold destiny and other abstract concepts responsible for it. While I know we cannot control things that are out of our control, least we can do and must do is to control things that we can. One such thing we can control is how we build our Advisor Portfolio. Let us understand that no one person or entity has all the skills in the world to help us navigate through the complex maze of our financial, accounting and legal affairs.

Just like our investments we must also diversify our advisor risk. Who is advising us? Who is managing what for us? How can we ensure that all is well with us and our affairs? These are questions to consider.

Let’s start counting. Who are the people and entities we require? Here are some broad level suggestions.

1. Bank & Relationship manager – It is good to have 2 banks that you deal with. How we divide between them is up to us. As an example, one bank account could be used for our Financial Planning the other could be for general expenses.
2. Chartered Accountant – We cannot have 2 here, but if you are running a private limited company you could have one for your company accounts and one for your personal accounts. For self employed and partnerships you obviously need just one CA
3. Financial Planner – You just need this person, as he is your family’s financial doctor. But you must speak to a handful of planners to understand each ones way, style and methodology of work and most importantly how comfortable you are with his/her approach. Remember this is going to be your most important and lifelong relationship. Take you time to sign up with one but certainly sign up when you are satisfied.
4. Life Insurance Agent – We need to shop really hard here as we could be misled so easily. They know a lot about insurance, many of them will be experts and while that is an advantage it is also an inherent disadvantage as Insurance is all that they know. You could land up paying a huge amount of premium and have little benefit from the policy itself. A simpler way is that you could have a Financial Planner who is unbiased and you could then use your chosen Life Insurance agent to do your product purchases. This is tricky as most Financial Planner would be agents as well, so check before you take the plunge. An unbiased planner is hard to find.
5. Non-Life Insurance Agent – Here we need someone who we can trust really well, who will be there when we need him desperately in times of making a claim, to remind us of renewals. Here the person needs to be really efficient in his / her work. If your agent does not fulfil the above criteria it time you think of a change.
6. Agent for Post office / PPF and similar deposit products – You could combine this with any of the above who offer this service too.
7. Mutual fund agent – There are three categories of people you will find here. One who know nothing and are simply product distributors just like your local kirana merchant. Buy at your own risk – no accountability for hi advice. Simply avoid. The next is a person, who knows a bit about funds, investments, investment objectives etc – you could deal with this person by doing a bit of research by yourself. The third category is that person who understands risk management, asset allocation, portfolio volatility, who can create a strategy for you with a fusion of your financial goals, time horizon and asset allocation. This is you best bet.
8. Portfolio Manager or Fund Manager or Wealth Manager – In this area most people will sound knowledgeable and that is because they all have the fundamental skills and knowledge of investment management. Per se their knowledge is good but the slippery ground here is the philosophy of the company they work for. Building wealth is really very easy and is not as complex as it may be portrayed. Avoid philosophies where the focus is on a single aspect of portfolio management such as momentum or aggression or the ones that use complex jargon. Just look for someone who says “I am interested in building your wealth and nothing else matters.” Investing is simple, really simple. Buy, hold and once in a way restructure and that’s it. Good research, knowledge, patience and fortitude is all that is needed. Complex ideologies and techniques usually imply more churning, more expenses, more brokerage costs for you etc and all this reduce your return significantly. Do business with someone whose method you understand completely and don’t get carried away by his historical performance. Enrol him for his vision and not solely on the numbers of the past. If you have a lot of money enrol 2 rather than 1.
9. Lawyer – You may not need his services often but a good way would be to check with any of the above you are friendly with and who you can trust. Don’t shop here but go by recommendations from people you trust. Again speak to a couple before you sign up.

This is a once in a lifetime exercise. Good luck on building your Advisor Portfolio.