A fee-only advisor’s letter to his clients

Published: June 30, 2023 at 6:00 am

We recently ran an anonymous survey for clients of fee-only advisors who are part of Freefincal’s curated list and fee-only India – 964 clients have participated.

Swapnil Kendhe is one of the most sought-after advisors on our list. One hundred fifteen of his clients participated in the list, and 97% had the most wonderful things to say about his integrity, forthright nature and clarity of understanding, which is incredible.

Swapnil wrote a letter to his client responding to the feedback. It is reproduced below with his permission. It is his first step forward to make the feedback 100% positive – an impossible task to satisfy everyone, but I am glad he does not want to rest on his laurels and continuously improve.

About the author: Swapnil is a SEBI Registered Investment Advisor and part of my fee-only financial planners’ list. You can learn more about him and his service via his website, Vivektaru. His story: Becoming a competent & capable financial advisor: My journey so far.

As a regular contributor here, he is a familiar name to regular readers. His approach to risk and returns are similar to mine, and I love the fact that he continually pushes himself  to become better, as you see from his articles:


Join over 32,000 readers and get free money management solutions delivered to your inbox! Subscribe to get posts via email!
🔥Enjoy massive discounts on our robo-advisory tool & courses! 🔥

Dear All, Thanks for taking the time to provide your feedback in the Freefincal adviser
survey. 115 of you provided your valuable feedback. Good feedback works like a
tonic for advisers like me, while not-so-good feedback gives an opportunity to
improve the offering.

Freefincal had done a similar survey before covid and the feedback for me was
not as good as the feedback I got this time. I made a few changes in the way I
work after the last Freefincal survey. I will try to do the same this time.
The feedback was anonymous, and I cannot know which client said what. I have
tried to address a few concerns below.

Every advisory model has some limitations. Here are a few limitations of
my model.

A. I work on the advice-only model, therefore the responsibility for the execution
of the action plan needs to be taken by the client. I prefer to work with DIY
investors who can handle the execution part themselves.

B. There are a fixed number of client sessions I can do in a year. Any additional
offering like half-yearly/quarterly reviews or client calls to check the execution of
the action plan would reduce the number of clients I can handle. I will have to
increase my fee to earn the same revenue that I earn today. This increase in fee
would make my service unaffordable for a section of my clients.

The indexing approach I follow works only when you keep costs low. I don’t want
to increase my fee to offer an additional service that I know won’t add significant
value to the clients’ portfolios.

Monthly or quarterly review calls, assistance in the execution, etc. work only in
the percentage of AUA model where you can have 50 clients and still earn in
crores; not in the fixed fee model I work on.

C. Since I work alone and have no intention to have an employee which would
increase my cost of business and fee, it is not possible for me to follow up with
individual clients. For the engagement to work best, I as an adviser, and you as a
client, must work together on the financial plan.

D. I used to send reminders for renewal or annual reviews, but after SEBI put
restrictions on the number of clients of individual RIAs, I stopped sending
reminders. I need to keep slots free for clients who have a strong actual or
emotional need for renewal. I try to make my clients capable of managing their
money on their own so that there is no need to engage an adviser on an ongoing
basis.

E. 150 client limit and heavy compliance requirement for RIAs make it impossible
for me to offer one-off consultations charged on a per call basis, and to cater to
DIY investors who might occasionally need my input.

F. While working with NRI clients, all advisers face the same issue: they don’t
fully understand the products available in the country of residence of the client
and the applicable taxation. The adviser can google as much as he can, but he
can never understand it well enough. NRI Clients must therefore do some study
and research of their own and let the adviser know about the products available
and the taxation. Adviser and client can then work together and try to arrive at
an action plan.

I avoid working with NRI clients because a part of the advice often falls outside
my circle of competence. But many times I accept the engagement because I
know that other advisers don’t understand it any better and there are not many
ethical advisers in India.

Every advisor has biases of his own. Here are some of my biases

A. I am a firm believer in the defensive or passive approach of investing for
investors who lack knowledge or time required to do successful enterprising
investing. At times I do come across as someone whose beliefs are not open for
challenge or discussion.

B. I don’t trust the fund management industry. I am aware that there will always
be funds that would do better than the index portfolio. I trust indexing more
because I have not come across any reliable method or tool to find winning funds
of the future in advance today. I prefer the investment style that eliminates the
risk of underperformance rather than taking the risk of underperformance for a
small probability of superior return.

C. I don’t trust third-party apps and websites like Kuvera, Grow, etc. because I
do not understand their revenue model. I would always prefer the first-party apps and websites even though the user interface and, in rare cases, service is not as good.

D. I detest micromanagement of the portfolio and spending too much time on
financial planning calculations by taking different sets of assumptions. All I care
about is to check what we can achieve with our current assets and savings
potential if there aren’t lucky outcomes. What return we will get has no bearing
on the assumptions that we take.

E. I love the unified portfolio approach. Some clients want more clarity about the
withdrawals from the unified portfolio for different goals. I will write an article on
this when I get time.

I tend not to operate at my best when I have a higher volume of business. When
I have a higher volume of business, the conversations with clients sometimes get
transactional without emotional connection or depth. I also have a tendency to
get easily bored with repetitive work. I am aware of this problem and consciously
trying to keep the volume of work lower than the volume where I start hating the
work of a financial planner.

2023 has been difficult for me because of my wife’s cancer (she is fine now) and
my kid only being 2 years old when it all started. I was not in the best frame of
mind while working on a few financial plans. I apologize to clients to whom I
came across as a little arrogant.

Thanks for trusting me as your financial adviser. I will continue to try to improve
as an adviser.

Yours truly,
Swapnil Kendhe
June 06, 2023

Do join me in wishing Swapnil peace, happiness and prosperity on the personal and professional fronts.

Do share this article with your friends using the buttons below.

🔥Enjoy massive discounts on our courses, robo-advisory tool and exclusive investor circle! 🔥& join our community of 5000+ users!
Use our Robo-advisory Tool for a start-to-finish financial plan! More than 1,000 investors and advisors use this!
New Tool! => Track your mutual funds and stock investments with this Google Sheet!
We also publish monthly equity mutual funds, debt and hybrid mutual funds, index funds and ETF screeners and momentum, low-volatility stock screeners.
Follow Freefincal on Google News
Follow Freefincal on Google News
Subscribe to the freefincal Youtube Channel. Subscribe button courtesy: Vecteezy.
Subscribe to the freefincal Youtube Channel.
Follow freefincal on WhatsApp Channel
Follow freefincal on WhatsApp
Podcast: Let's Get RICH With PATTU! Every single Indian CAN grow their wealth! 
Listen to the Lets Get Rich with Pattu Podcast
Listen to the Let's Get Rich with Pattu Podcast
You can watch podcast episodes on the OfSpin Media Friends YouTube Channel.
Lets Get RICH With PATTU podcast on YouTube
Let's Get RICH With PATTU podcast on YouTube.

  • Do you have a comment about the above article? Reach out to us on Twitter: @freefincal or @pattufreefincal
  • Have a question? Subscribe to our newsletter using the form below.
  • Hit 'reply' to any email from us! We do not offer personalized investment advice. We can write a detailed article without mentioning your name if you have a generic question.

Join over 32,000 readers and get free money management solutions delivered to your inbox! Subscribe to get posts via email!

About The Author

Pattabiraman editor freefincalDr M. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. He has over ten years of experience publishing news analysis, research and financial product development. Connect with him via Twitter(X), Linkedin, or YouTube. Pattabiraman has co-authored three print books: (1) You can be rich too with goal-based investing (CNBC TV18) for DIY investors. (2) Gamechanger for young earners. (3) Chinchu Gets a Superpower! for kids. He has also written seven other free e-books on various money management topics. He is a patron and co-founder of “Fee-only India,” an organisation promoting unbiased, commission-free investment advice.
Our flagship course! Learn to manage your portfolio like a pro to achieve your goals regardless of market conditions! More than 3,000 investors and advisors are part of our exclusive community! Get clarity on how to plan for your goals and achieve the necessary corpus no matter the market condition is!! Watch the first lecture for free!  One-time payment! No recurring fees! Life-long access to videos! Reduce fear, uncertainty and doubt while investing! Learn how to plan for your goals before and after retirement with confidence.
Our new course!  Increase your income by getting people to pay for your skills! More than 700 salaried employees, entrepreneurs and financial advisors are part of our exclusive community! Learn how to get people to pay for your skills! Whether you are a professional or small business owner who wants more clients via online visibility or a salaried person wanting a side income or passive income, we will show you how to achieve this by showcasing your skills and building a community that trusts and pays you! (watch 1st lecture for free). One-time payment! No recurring fees! Life-long access to videos!   
Our new book for kids: “Chinchu Gets a Superpower!” is now available!
Both boy and girl version covers of Chinchu gets a superpower
Both the boy and girl-version covers of "Chinchu Gets a superpower".
Most investor problems can be traced to a lack of informed decision-making. We made bad decisions and money mistakes when we started earning and spent years undoing these mistakes. Why should our children go through the same pain? What is this book about? As parents, what would it be if we had to groom one ability in our children that is key not only to money management and investing but to any aspect of life? My answer: Sound Decision Making. So, in this book, we meet Chinchu, who is about to turn 10. What he wants for his birthday and how his parents plan for it, as well as teaching him several key ideas of decision-making and money management, is the narrative. What readers say!
Feedback from a young reader after reading Chinchu gets a Superpower (small version)
Feedback from a young reader after reading Chinchu gets a Superpower!
Must-read book even for adults! This is something that every parent should teach their kids right from their young age. The importance of money management and decision making based on their wants and needs. Very nicely written in simple terms. - Arun.
Buy the book: Chinchu gets a superpower for your child!
How to profit from content writing: Our new ebook is for those interested in getting side income via content writing. It is available at a 50% discount for Rs. 500 only!
Do you want to check if the market is overvalued or undervalued? Use our market valuation tool (it will work with any index!), or get the Tactical Buy/Sell timing tool!
We publish monthly mutual fund screeners and momentum, low-volatility stock screeners.
About freefincal & its content policy. Freefincal is a News Media Organization dedicated to providing original analysis, reports, reviews and insights on mutual funds, stocks, investing, retirement and personal finance developments. We do so without conflict of interest and bias. Follow us on Google News. Freefincal serves more than three million readers a year (5 million page views) with articles based only on factual information and detailed analysis by its authors. All statements made will be verified with credible and knowledgeable sources before publication. Freefincal does not publish paid articles, promotions, PR, satire or opinions without data. All opinions will be inferences backed by verifiable, reproducible evidence/data. Contact information: letters {at} freefincal {dot} com (sponsored posts or paid collaborations will not be entertained)
Connect with us on social media
Our publications

You Can Be Rich Too with Goal-Based Investing

You can be rich too with goal based investingPublished by CNBC TV18, this book is meant to help you ask the right questions and seek the correct answers, and since it comes with nine online calculators, you can also create custom solutions for your lifestyle! Get it now.
Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want Gamechanger: Forget Start-ups, Join Corporate and Still Live the Rich Life you wantThis book is meant for young earners to get their basics right from day one! It will also help you travel to exotic places at a low cost! Get it or gift it to a young earner.

Your Ultimate Guide to Travel

Travel-Training-Kit-Cover-new This is an in-depth dive into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, and how travelling slowly is better financially and psychologically, with links to the web pages and hand-holding at every step. Get the pdf for Rs 300 (instant download)