Is Your Advisor Adding Value

Dear Friends,

I have often wondered  what is the role of an advisor!!

How would one judge the effectiveness of an Advisor?

  • Is the Advisor to be judged only on the basis of “Alpha” returns that his advice generates?
  • Is he to be chosen because his services are impeccable or he is good because his back office systems are in place, etc etc?

I think that an Advisor’s role goes much deeper than the above. He is the one, who helps you avoid an investment decision that would result in the wiping out of one’s investment in totality or capital destruction!. More often than not, this aspect goes unnoticed.

Can an advisor be right all the time? Obviously, not, but if one is able to avoid the major mistakes, in my opinion, he is doing his job.

We at RSFS, took a stock check of the last few years and came out with some interesting results:

  1. Zero investment in National Spot Exchange: We correctly predicted and advised our clients against investing in National Spot Exchange arbitrage opportunities. Those who invested lost roughly 82% of their capital.
  2. We had advised against investing in JM Mutual Fund Debt Schemes -Its investors lost a substantial percentage of wealth in debt funds due to its high concentrated exposure to one particular group, couple of years back.-Our exposure: ZERO
  3. Last week’s downgrading of ADAG Group Papers left all Reliance Mutual Fund Debt Schemes in the negative. Our exposure to Reliance Mutual Fund Debt Schemes is ZERO. We had liquidated all debt fund holdings a few months back.
  1. Couples of months back FMP’s of Kotak Mutual Fund & HDFC Mutual Fund saw delayed redemption & partial redemption. Our exposure to these FMP’s is ZERO as we were never convinced with such FMP’s and never advised to invest in it.
  1. UTI Banking & PSU Debt MF lost more than 6% in a single day last week– our exposure ZERO.

We at RSFS, have constantly tried to avoid such pitfalls & have been fairly successful so far. We shall keep endeavoring to provide value added services and quality advice to all our customers in all times to come.

With warm regards,

Samrendra Tibarewalla, CFP(CM)


PS: You are the best manager of your money. Please take informed decisions only.

Disclaimer : The author in no way will be held responsible for losses incurred on the basis of above re commendations. The investors are advised to take independent decisions after verifying all facts.

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