In this article, a client shares how a SEBI registered investment advisor and fee-only financial planner (Swapnil Kendhe) helped him set his finances in order. Those wondering what to expect from a fee-only financial planner will benefit from this. The client prefers the pen name ‘safed pigeon’.
About the advisor: 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. In the recently conducted surveys of readers working with fee-only advisers, Swapnil has received excellent feedback from clients. See:
- Are clients happy with fee-only financial advisors: Survey Results and
- 685 investors rate their experience with SEBI registered fee-only advisors.
This is his story: Becoming a competent & capable financial advisor: My journey so far. The list of articles authored by Swapnil for freefincal is listed at the end of this article. Now over to safed pigeon.
Why I decided to engage with a planner
After working as a professional for a few years, I managed to create a simple portfolio. I had a few short term goals, like having an Emergency fund, Funding a Car Purchase without any loan, and funding any potential future foreign travel. I was using Fixed and Recurring deposits for these goals.
I had also bought term life insurance and health insurance policies and accumulated a few long-term investments that were automatically done for me, courtesy of my employer, which were EPF and company RSU(s) vested over regular intervals. I used PPF as a tax saving instrument and invested the maximum each year.
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I also had a demat and trading account and had managed to buy a few stocks, which were insignificant as a percentage of the whole portfolio, but watching their price action consumed a good percentage of my days. I also started a small SIP in an Equity MF and learned about different asset classes, thanks to learnings from blogs like freefincal and FB group Asan Ideas For Wealth.
I was then 28 years old, considering my salary and cash flow situation. This setup was working fine for me. I fulfilled my goal of buying a car with my savings and was happy when I gave the cheque for the full amount to the Car Dealer.
Then, a life event happened. I switched my company for professional growth, and in this process, I got a raise as well. I had some surplus cash flow available now. CTC structure of the new firm was such that the Joining bonus was a big component of in-hand salary in the initial years, which would be replaced by RSU(s) in the later years. Though it could have allowed me to save for a downpayment for buying a house quickly, I resisted the temptation due to the rapid price increase of flats in my neighbourhood. I didn’t want to buy the house at that juncture of my life with this surplus and wanted to invest it appropriately.
At this point, I realised I needed external help to validate my thought process and get it done quickly. I knew about the Fee-only India movement and went ahead with researching whom could I choose as my fee-only financial planner. I used this list of Fee-only Financial Planners in India (SEBI RIAs) to prepare a shortlist. I contacted Swanil Kendhe of VivekTaru.com from this shortlist first.
What process did VivekTaru follow?
He clearly mentioned the process he followed as a planner through a sample letter of engagement, which outlined the scope and terms of engagement. It also mentioned what services were on offer, what wasn’t included, and a few other things such as the duration of engagement, compensation, conflict of interest, client’s responsibility and client’s assets. He also shared a sample financial plan, which would be the outcome of the whole exercise.
He asked me what my expectations from the engagement were. I told him that I want Goal planning and investing with proper asset allocation for each goal, and I have basic financial knowledge but can’t follow a process on my own. He also clarified that he would not be able to assist me with tax filing, as it’s the job of a Chartered Accountant and not his. I agreed to the letter of engagement.
Once advance payment was made, and I had agreed to the terms of engagement mentioned in the letter, he mailed me the datasheet. This exercise of filling up the data led me to an introspection journey, and I tried to provide all the required information in the shared sheet honestly.
After this, he took four sessions with me, explaining the basic concepts about Equity and Equity Mutual funds, Debt Mutual funds, Asset Allocation for goal planning and my actual financial planning and action plan for the next year. All sessions were online using Google hangouts for sharing screen. This whole exercise took a week. After a week, he mailed me my personalised financial plan, and I made the balance payment. Note: Swapnil’s approach is detailed on his website.
What VivekTaru did right
He provided the value, which was far more than the fees he charged me as a client.
He spent his time and effort validating my life goals that I had set and came up with a plan to help me reach those goals. When you have the action plan in a documented form, all you need is to implement it and focus on things in life that are important – Career and Family. It frees your time at the cost of your planner’s.
He educated me, assuming I didn’t know anything. I found out I was wrong in holding RSUs of a single company, and it poses a concentration risk at my portfolio level. I still hold those RSUs, but now I know the risks attached. He also educated me about a few health insurance technicalities and a top-up, super top-up policy.
Over time, he also grew his knowledge and shared it with me in pdf articles. We had many healthy discussions, which increased my knowledge of personal finance. I had the assurance that he was available for me whenever I needed, during the engagement.
I could survive once in the lifetime crisis of March 2020 by doing nothing because I knew he would have told me if something needed to be done.
Over time with regular investments, I got used to the volatility of the markets and saw my Asset Allocation for long term goals reaching the desired level.
After two years, we agreed to end the relationship, as I no longer needed his time and skills anymore and had confidence in going the DIY way. With that time, I hope someone else will benefit.
Tips for readers
Financial planners are more of a guide. They can’t guarantee any returns from an instrument but can help us follow the investment process. You will need to tell them whether you wish to commute to the office, travel to another city, climb a mountain, or fly to another country. They can show you the path, prepare an itinerary, and sometimes hold your hand when you get into trouble, but it’s you who will have to trust their advice and execute the plan prepared by them.
Their job description is clearly articulated. You will know before paying a single penny what the outcome of this relationship will be. You might get more, but not less.
Every planner is unique, and the advice is the culmination of their life experiences. Some may advise only index funds, some direct stocks, some active funds, some REITs, and international funds, the paths each planner will take will differ. Your job is to figure out which planner path matches your comfort level by reading blogs, talking to them, and once you finalise, walk the path without any hesitation. If you were honest about your goal, that path would lead to your destination.
List of articles written by Swapnil Kendhe
- Want to build an equity mutual fund portfolio? Try these simple steps!
- Basics of Debt Mutual Funds Explained for New Investors
- Three Key Mutual Fund Terms All Retail Investors Should Know
- Debt Mutual Fund Categories Explained For Retail Investors
- Are you a conservative investor? Here is how you can grow your money smartly.
- SEBI Registered Investment Adviser Application Process: step by step guide
- Looking for a fee-only financial planner? Here is a list of questions to ask before you sign up
- Should Mutual Fund Distributors become SEBI Registered Investment Advisors?
- Everything you need to know about equity portfolio construction
- Try these back-of-the-envelope financial planning calculations!
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About The Author
Dr 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.
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