Mutual fund is type of financial vehicle that is pool of money collected from many investors for investing money in securities like stocks, money markets, bonds and other assets. It is operated by professional money managers; who allocate the assets of the funds and attempt to churn out capital gains or income for the funds of the investors.Mutual fund is type of financial vehicle that is pool of money collected from many investors for investing money in securities like stocks, money markets, bonds and other assets. It is operated by professional money managers; who allocate the assets of the funds and attempt to churn out capital gains or income for the funds of the investors.
However investment in mutual fund can be tricky and if you are newbie investor, investing in mutual fund will not be a cake walk activity as one has to make calculations and thorough research before selecting the funds that will be safe and reap good returns.
So it is advisable to hire professional and expert Mutual Fund Distributor, who can help you with good mutual funds in tune to your needs, requirements and financial portfolio.
So who are good mutual fund advisors? They are qualified professionals; who understand the A-Z aspects of mutual funds. His/ her job is to figure out the fund that is in tune with the investor’s interest and then synchronizes with their objectives and risk tolerance. Good Mutual Fund Agent has vital roles to perform that include:
1. Educating the Investor: Foremost duty is to educate the investor about investment plan that aids them to achieve their goal. He/she explores spectrum of investment options and club multiple to generate maximum returns at a given risk factor.
2. Evaluate the Risk Tolerance: Professional advisor should suggest the fund that aligns with risk factor of the investor. For e.g. for a senior citizen he will not recommend equity fund; who is looking for investment options for 2-4 years.
3. Analyze Investment Options and Chalk out the Strategy: One of the most difficult jobs is to examine all the investment avenues at hand by considering the current economic and financial development. Also, advisor drafts proper strategy by considering the investment horizon, risk factor and aim and motto of the investor. Good advisor ensures that the portfolio delivers maximum returns at given risk factor.
4. Diversify Portfolio: Genuine advisor will never advice to put all the fruits in one basket, instead he aids the client to diversify their portfolio so that the risk can be spread.
How to select the fund advisor?One should select an advisor on the basis of experience. Person with good experience and expertise becomes a good fund advisor. Such a person follows a well defined and set approach in selection of investment.
One has to take into account certain aspects before choosing good fund agent and those are:
1. Qualification of the Advisor: As everyone checks the qualification and experience of the doctor before every visit, it is equally important to ascertain that your mutual fund advisor is qualified and has good knowledge of the subject. He/she should be well versed with good knowledge of varied asset classes like equity, gold and fixed income and should be able to assess how these asset classes will be affected by national and international changes and norms. Also the good fund advisor should be able to identify products that will be in tune to the requirements of the clients for the coming years.
2. Professional and Accessible Nature of the Advisor: It is important for the advisor to be professional and easily accessible. The advisor and the team of person who work with him/ her should be well versed and well qualified with in depth knowledge of investment options and norms. They advisor and his team should be able to resolve and answer the queries in reasonable time period and ensure that the client is cleared with doubts and issues. Also the advisor should be easily accessible and should be capable of executing the investments of the clients in short turnaround time period.
3. Advisor Should be Able to Offer all Round Services: Most people refrain from discussing finance and their personal life with people as it means having to explain same things again and again. They would trust advisor to handle their investments with confidence so it is highly recommended that the advisor should be unbiased and offer mutual fund products from all fund houses taking into account the investment portfolio of the clients and not just one or two funds.
4. Track record of the Advisor: There is no formal rating or ranking system for mutual fund advisors in our country. Hence people depend on references and the track record of the advisor before they plan to pick one. Track record of the advisor epitomizes his/her caliber, work experience and expertise level; thus aiding the person to make accurate choice. Also one can make use of various social media websites to understand the views and recommendations of the persons. This will give some idea of the strengths and experience of the agent. Checking online referrals and asking around for references also helps a great deal. It is also better to find out as to how long the advisor has been in the forte and also what is his style of operating.
5. Compensation of the Advisor: A professional and good advisor has to be compensated well in terms of fees. Check out if your advisor uses distribution model, where he gets commission from fund houses for every investment one makes through him. Some advisors charge fees based on the time they spend with the client. Surf various portals that help you in gathering required details.