At Personalfn, on numerous occasions we have taken on investment advisors for indulging in unethical (acting in their personal interest, at the cost of the investor's) and illegal (offering rebates against investments) practices. However certain events in recent times have left us rather concerned.

Investors are now at the "receiving end" of advice from newer sources like magazines and banks. While the retail investor's access to advice has grown exponentially, the quality of advice has remained poor, and in some cases it has even deteriorated.

Recently, a money magazine carried an article authored by an expert. The article deals with how retail investors should deal with mutual fund distributors and beat them at their own game. Nothing wrong with that.

But during the course of the article, the expert goes on to teach investors how to make the most of new fund offers (NFOs), by investing and exiting from them on a continuous basis. Also investors are required to demand rebate from the distributor while getting invested. The expert relies on rising markets for his "modus operandi" to succeed.

Now we aren't questioning the expert's intentions or even his credentials. But the bit about rebates and churning the portfolio is something we find hard to digest.

Firstly, the practice of 'rebating' or 'passing commission' is explicitly prohibited. Secondly, equity-oriented investments should be made from a long-term perspective (at least 3 years), since it is over such a period that equities are best equipped to deliver.

Advising investors to continuously churn their portfolios and maintain an investment horizon of 3-4 weeks is inappropriate. Effectively retail investors have been prompted to violate a regulation and act against the very fundamentals of investing in an endeavour to make easy money.

The second instance occurred when the author of this article visited a private sector bank. Although the author was there to make enquiries about his fixed deposit investments with the bank, the bank employee was more keen on getting the author invested in a mutual fund NFO.

The rationale for investing in the NFO was -- it is from a reputed financial institution (the bank employee was perhaps not aware of the difference between a fund house and its sponsor) and that there is no entry/exit load.

What happened to enquiring about the prospective investor's risk profile, investment horizon, existing portfolio and financial goals? Don't any of these matter? Since when did just the fund's pedigree and absence of entry and exit loads become good enough reasons for investing in a fund?

Investors have gone from an era when there was very little investment advice available, to one where there is a deluge of advice. Sadly, the quality of advice doing the rounds leaves a lot to be desired.

Investors on their part need to be careful about the advisors they are associating themselves with and the kind of advice they are acting on.

It was a 'record' week for investors with markets soaring to all-time highs. The BSE Sensex rose by 2.93% to close at 12,736 points, while the S&P CNX Nifty ended the week at 3,676 points (up by 2.97%). The CNX Midcap rose marginally (0.02%) and closed at 4,776 points.

UTI � India Advantage Equity (4.11%) surfaced as the top performer in the diversified equity funds segment. HDFC Core & Satellite (3.64%) and Birla India Opportunities (3.60%) occupied second and third positions respectively.

The 10-Yr 7.59% GOI yield closed at 7.63% (October 13, 2006), 4 basis points above the previous weekly close. Bond yields and prices are inversely related with rising yields translating into lower bond prices and net asset value (NAV) for debt fund investors.

Tata Income (0.23%) topped the debt funds segment, followed by Deutsche Premier Bond (0.20%). Templeton Income Builder (0.19%) and Tata Income Plus (0.18%) also featured in the top performers' list.

Balanced funds drew from the rising equity markets. HDFC Balanced (2.82%) led the pack; ING Balanced (2.54%) and Sundaram Balanced (2.26%) occupied second and third positions respectively.

Now that we have discussed the topic of advice in great depth, we have some advice of our own for investors � "5 things to do with your money". While most of us would find this hard to digest, there are many individuals out there, who have a lot of wealth at their disposal but don't know what to do with it. Conversely, there are some who don't own a great deal of money, but are in complete control of their finances.

For those in the first category, conducting the tax-planning exercise, planning for retirement and getting insured are some of the most important objectives. While it's nice to have wealth, it is equally relevant to know what to do with it and to put it to good use.

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