Greetings from us!!
Managing one’s personal finances is exciting or boring depending on one’s financial expertise, availability of quality time and the dedication to follow the wealth strategies. There are broadly three ways one can manage their personal finances with each having its positives and negatives. The following are our take on the various strategies available.
- Do It Yourself (D.I.Y): There would be one set of people who would have more of a passive approach and prefer not to do anything. Their money would lie in low yielding, tax inefficient Savings Account and Fixed Deposits. They might miss on simple opportunities and probably underperform during inflation. Another set of people would be a bit more active who would do their reading, follow finfluencers and based on their limited understanding do what they feel is best. The downside is that they might get swayed by the latest sentiments and fad at that point in time. This strategy might look like having low-cost but one would need to devote quality time. There are also chances of large mistakes because of one’s biases and limited expertise.
- Brokers/Distributors/Bankers/Agents: One could take the services of a well-regulated broker/ distributor/bankers/agents. There are no fees to be paid in these engagements as the brokerage/commissions are embedded in the suggested products. Often the incentive structure of brokers /distributors/bankers/agents might be the prime factor in building the portfolio rather than the risk profile of a client. The brokerage / embedded cost in some of these products like insurance etc. might lead to mis-selling These intermediaries can only give suitability advice (concerning the transacted product) and not holistic financial planning advice as per the current regulations in India.
- Fee only Advisors: A fee-only advisor is one who is registered with regulators, certified, qualified and experienced. They would carry out a risk profiling exercise, understand cash flow situations, incorporate personal biases and only then construct a well-developed financial plan. These would charge fees on an assignment basis or for a term. Fees could be charged either as a fixed fee or percentage on the assets managed. The advantage of such an arrangement is that there are no conflicts of interest as there is complete transparency without the implications of brokerage and commissions. The benefits of engaging with such fee only advisors are better focus on one’s profession/business/ family/ hobbies while the trusted financial adviser manages your financial wealth.
The current regulations in India stipulate that fee charging Financial Advisors to be registered with SEBI as an RIA (Registered Investment Adviser) under SEBI Investment Adviser Guidelines -2013. RIA’s need to be qualified, pass two levels of NISM examination and have a process-based approach for Investment Advice. They must periodically report to the regulator on the client profile and the fees being collected. No investment advice can be done without completing the Letter of Engagement, KYC and risk profiling. However, SEBI only regulates products under its purview such as Stocks, Mutual Funds, Bonds, REIT, ETF’s etc. Non-SEBI products come under the purview of the respective Regulators like RBI, IRDA, PFRDA & RERA.
About us:
We at Naveen Rego Capital Private Limited are a Non-Individual SEBI Registered RIA with RIA Registration number: INA000019211 and BSE Membership ID: 2178.
At present we are the only RIA in Mangalore and adjoining regions as well as one the few RIA’s in India. Apart from the SEBI regulated products, we also advise on all financial products which are under the purview of other Financial Regulators. This could include Life and Health Insurance, Fixed Deposits (Resident, NRE & FCNR), NPS, Investment Real Estate, etc.
It should be noted that we do not have any commercial arrangement while recommending any financial products- SEBI and non-SEBI. The fees charged by us are the only remuneration received by us. We do not receive any commission/ brokerage from the recommended products.
Just a perspective:
Market linked products advised by us with a broad portfolio of Direct Stocks, SGB’s, ETF’s, Direct Mutual Funds has an average annual cost of 0.25% p.a- 0.50% p.a. At present we are not charging fees on non-SEBI products. We charge an additional 0.5% p.a. making the entire cost of the financial portfolio under our purview at an average annual cost of 0.75% p.a- 1.00% p.a.
However, if someone is taking the help of a financial agent/broker/ banker the annual costs of a regular plan would be approximately between 1.50% p.a. to 2% p.a.
For those investors who self-manage their portfolio (DIY) and invest in the Direct Plans of Mutual Funds, the annual cost would be approximately 1% p.a.
Hence, it is time you focus your time and resources on your daily lives and leave your financial worries by engaging with a fee only SEBI Registered Investment Adviser like us.
Feel free to connect with us for any clarifications. We are reachable at 9740457582/assistant@naveenrego.com. To know more about us do visit www.naveenrego.com.
Happy Investing!!
Naveen Julian Rego-CFP
MD & Principal Officer
Date: 22-10-2024
Note and disclaimers:
- Investment in the securities market is subject to market risks. Read all the related documents carefully before investing.
- Registration granted by SEBI, membership of BASL and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.
- Costs/Expenses of the financial products mentioned above are from public sources and our recommended model portfolio.