Time was when investments meant bank deposits, post office schemes and UTI schemes if you were adventurous. Compare this to today's scenario when there any number of investment avenues open to investors, whether be it in equities, debt or mutual funds.

However, general awareness among the public at large regarding the opportunities continues to be low. Rapid changes in market conditions means that investments without proper advice may not be a prudent thing to do.

No need to worry though. If you are planning to enter the wonderland of investments there is help at hand. The volatile markets and the plethora of investment options that are available in the market, is giving rise to a new breed of professional financial advisors.

Their numbers are not great though, but they are there if you are willing to make the effort to spot them.

While one is familiar with the so-called advisors who frequent homes, selling their wares, mostly UTI, post office schemes and bank deposits, a current crop of qualified advisors, at least in big cities, are fast replacing them.

Their USP? Professional investment advice based on sound knowledge, experience and ethics. But if quality advise is what you want, then you better pay a tidy fee for the service.

For the ordinary Indian investor, spoilt by the "free advice" given by their advisors,  that may mean a paradigm shift in their approach to investing.

Holistic financial planning exercise comes at a price. For example, Bajaj Capital charges Rs 10,000 for their financial planning service, apart from the variables depending on clients. That may be nothing, when one compares rates in the US, where financial planners charge clients on a per minute basis, up to $4 a minute in specific cases.

Professional advisors such as Devang Shah, a certified financial planner affiliated to the Association of Financial Planners and owner of financial advisory firm, Right Returns Financial Planning, works on a fee-based system.

"We have a system, where clients pay us as we go along depending on the client. It is not as a percentage of investment," says Shah.

According to Veer Sardesai of the Pune-based financial planning firm, Sardesai Finance, the principle difference between the distributors and his firm is that the latter works on "fee only" model.

"We get paid only by the client and not by the mutual fund or insurance company. As a result the client can be rest assured that we will do only what is in his interest and will not be swayed by commissions of foreign trips offered by these agencies," stresses Sardesai.

While qualified planners charge salaried professionals anywhere between Rs 2,500 and Rs 15,000, the model is more complicated for high networth individuals, where the financial planning exercise involves many family members and are significantly more complex. Here the fee is decided on the work load involved and is based on the number of work hours put in per client.

According to Hemant Rustagi, chief executive officer, Wiseinvest Advisors Pvt. Ltd, fee-based advice is a best way going forward. "Anything that comes free and that includes investment advice, will not be taken seriously by customers."

How To Assess Your Advisor?

While you are paying for a service, you have the right to expect good service too. So how does one evaluate the performance of a financial advisor? Even though there are no rules, which regulate advisors, certain standards have been put into place.

For example, while only the Association of Mutual Funds in India-certified agents and distributors can sell mutual funds and offer product service, an insurance seller has to pass the Irda examination. Rustagi feels that there is a lot of room for improvement in this area.

"The thing is that the Amfi test may not be the best criteria to judge an MF investor, but it is a good start nevertheless. My feeling is that the advisors still need practical training. In that sense there is a gap in the industry between the manufacturers and investors," he adds.

According to Sardesai, the performance of a financial planner can be judged by the success of his plans. This has two aspects: short term and long term.

"In the short term one can measure success in tax savings, in having better insurance coverage with lower premiums etc. These translate into money directly in the clients pocket."

Sardesai feels that long-term performance has to be measured by the proximity the client has reached in achieving his financial goals. For example, how have the investments performed compared to his or her expectations and the risk profile, or how he or she has been able to cope with a job loss.

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