Before booking for a flat, understand What you need to do

What factors do you look for, while comparing properties? Without any doubt, the property’s location, price and possession, will be the first and foremost parameters one might consider for his/her short listing. However, apart from these primary ones, a few more things are necessary to check before finalizing upon a deal.

Let us now find out those legal documents one must ask for, before making any kind of financial commitment. Asking and checking for the copies of the following necessary permissions and clearance certificates, will avoid you from being stuck into any judicial tangle in future.

Title Deed:

  the ownership rights, obligations and mortgages (if any) on the property. Therefore, this document is a validation of whether the property land is registered, and its development rights transferred. You can obtain a copy for this from your builder and get the same verified from the land record office.

Certificate of the Project’s Commencement:

This document is necessary to mark beginning of the property’s construction. Post the analysis of the construction’s foundation and inspection of its boundaries, one can get this clearance certificate issued from town planning and engineering department. This is also a good indication of the builder obtaining the required licenses and permissions for the map. Even before you actually start digging up, you must have all these things sanctioned.

Verify of the plan’s approval:

It is advantageous to verify for the approval of the building and layout plan. This is like running an additional check to ensure that the plan does not violate or break any by law applicable in the construction area. In addition, you should also make sure the floor area, where your flat is booked, approved well in the building plan.

The design plan must be in accordance with the NBC guidelines. NBC, or National Building Code of India, is a code to understand the regulation of building’s construction activities throughout the country. One must get this checked with the local municipal authorities.

Some construction projects also claim for a green stature. In this, either of the Indian Green Building Council, or GRIHA should certify of the project. GRIHA is Green Buildings Rating System India, which is a TERI University’s initiative. These certifications focus on a rating a building, based on energy, water and waste management. GRIHA stands as the most popular rating system available in India right now, also having standardized norms.

Certificate for Land Use:

Having residential property in a commercial or an industrial zone is illegal. Therefore, ensure that the property you purchase lies in the residential zone, by applying to the urban development authority and check the certificate for the same. With the expanding cities, you may often find agricultural land converting to non-residential purpose by paying some fees to the government. During such situations, check for the endorsement order from the zonal deputy commissioner (or tahsildar). This order is a license for residential construction on the land.

Master Plan:

Many a times, you will find builders claiming future infrastructural development planned in the area, such as a highway or an upcoming metro. Before believing everything blindfolded, you must look at the area’s master planning personally for verification. You can very easily find such plans available with the town planning department.

Check for the NOCs:

Wherever applicable, ask for a No Objection Certificate of your urban land ceiling from your builder. You may also check the NOC for environmental clearance, as well as from the electricity and water authorities, if present.

Take the Expert Opinion

To verify whether or not, your project has clean and transparent paper work, a very simple and convenient way is to check if the same has loan approvals from the financial institutions. Banks have quite tough rules for lending, due to which they do all the important due diligence before clearing the loans. This may not be always error-free. There were many cases in past where the builder had the support from bank, still the project landed in to financial troubles.

Therefore, it is always on your advantage to get some professional help. If required, you may even seek for a paid opinion from an advocate specializing in property transactions, and even get your document verification done.

Once you are sure of the above-mentioned documents to be in their proper place and done with the verification, you may proceed with making your final decision without much anxiousness or worrying around. To decide these kinds of real estate investments need to be part of your portfolio or not, you need to have a financial plan mapped with all your financial goals.  If you are looking out to create a financial plan for yourself, then you may want to check our financial planning process.

The author is Ramalingam K, an MBA (Finance) and Certified Financial Planner. He is the Director and Chief Financial Planner of Holistic Investment Planners (www.holisticinvestment.in) a firm that offers Financial Planning and Wealth Management. He can be reached at ramalingam@holisticinvestment.in

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ITR Form to be used for filing of return of income for the assessment year 2016-17

Tax-return filing is just four days away and you have to download ITR form and started filling out the boxes. If you are self-filing for the first time, you can have a bunch of questions. One of the question is which Income tax form shall i use to File My return??

Answer of your query is given below:

Return Form	Brief Description
ITR - 1	Also known as SAHAJ is applicable to an individual having salary or pension income or income from one house property (not a case of brought forward loss) or income from other sources (not being lottery winnings and income from race horses).
ITR 2A	It is applicable to an individual or HUF whose total income for the assessment year 2016-17 does not include income from business or profession, capital gains. Further, an individual or HUF claiming foreign tax credit or having any asset (including financial interest in any entity) located outside India or having any signing authority in any account located outside India or having income from any source outside India cannot use this form for filing of return of income.
ITR - 2	It is applicable to an individual or a Hindu Undivided Family having income from any source other than "Profits and gains of business or profession".
ITR - 3	It is applicable to an individual or a Hindu Undivided Family who is a partner in a firm and where income chargeable to tax under the head "Profits or gains of business or profession" does not include any income except the income by way of any interest, salary, bonus, commission or remuneration, by whatever name called, due to, or received by him from such firm.
ITR - 4S	Also known as SUGAM is applicable to individuals or Hindu Undivided Family or partnership firm (other than limited liability partnership firm) who have opted for the presumptive taxation scheme of section 44AD/44AE.​
ITR - 4	It is applicable to an individual or a Hindu Undivided Family who is carrying on a proprietary business or profession.
ITR - 5	This Form can be used by a person being a firm, LLP, AOP, BOI, artificial juridical person referred to in section 2(31)(vii), co-operative society and local authority. However, a person who is required to file the return of income under section 139(4A) or 139(4B) or 139(4C) or 139(4D) or section 139(4E) or section 139(4F) shall not use this form (i.e., trusts, political parties, institutions, colleges, investment fund etc.)
ITR - 6	It is applicable to a company, other than a company claiming exemption under section 11 (exemption under section 11 can be claimed by charitable/religious trust).
ITR - 7	It is applicable to a persons including companies who are required to furnish return under section 139(4A) or section 139(4B) or section 139(4C) or section 139(4D) or section 139(4E) or section 139(4F) (i.e., trusts, political parties, institutions, colleges, investment fund, etc.).
​ITR - V	It is the acknowledgement of filing the return of income.

ITR, ITR 2016-17, ITR FORM A.Y 2016-17, Income Tax, Income tax form for a.y 2016-17, Income tax Form

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Common Proficiency Test (CPT) December 2016 Exam Date Announced

No.13-CA (EXAM)/CPT/December/2016: In pursuance of Regulation 22 of the Chartered Accountants Regulations, 1988, the Council of the Institute of Chartered Accountants of lndia is pleased to notify that the Common Proficiency Test will be held on Sunday, 18 December, 2016 in two sessions. [This Common Proficiency Test will be conducted as per provisions of Regulation 25 D (3) of the Chartered Accountants Regulations, 1988.] 

First Session (i.e. Morning Session)	10.30 AM to 12.30 PM (IST) Section - A Fundamentals of Accounting Section - B Mercantile Laws
Second Session (i.e. Afternoon Session)	2.00 PM to 4.00 PM (IST) Section - C General Economics Section - D Quantitative Aptitude

Applications for admission to Common Proficiency Test is required to be made in the relevant prescribed form as contained in the information Brochure, which may be obtained from the Deputy Secretary (Examinations), The Institute of Chartered Accountants of India, lCAl Bhawan, lndraprastha Marg, New Delhi -.. 110002 on payment of Rs. 1500 (Rs. 500 towards examination fee and Rs. 1000- towards cost of application form and information brochure) per application form. 

The information brochure containing Comrion Proficiency Test application form will also be available in the Regional and Branch Offices of the lnstitute and can be obtained there from on cash payment on or from 6th October, 2016

Cost of Purchasing form is Rs. 1000. However the fees of Rs. 1000 for purchasing the Exam form need not be paid in case the students opts for submitting the Exam form online from 6th Oct 2016 to 27th Oct 2016 (17.30hrs). Applications for admission to these examinations are required to be made either online at http://icaiexam.icai.org 

Common Proficiency Test application forms duly filled in may be sent so as to reach the Deputy Secretary (Examinations) at New Delhi not later than 27th October, 2016.
It may be noted that there is no provision for acceptance of application forms after 27th October, 2016 with late fee. 


The aforesaid Common Proficiency Test (CPT) is open only to students registered with the * lnstitute of Chartered Accountants of lndia for the Common Proficiency Course on or before 1st  October, 2016 and fulfill the requisite eligibility conditions. 


To download the Official Announcement Click Here

CA CPT, CPT, ICAI, ICAI ANNOUNCEMENT; ICAI Notification, CPT Exam date, CPT Exam Time Table, CPT Dec 2016 Exam Date, CPT December Exam Time Table

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6 Financial mistakes couples should avoid committing

Most couples have an impulse to argue and even fight over the “money” thing. A number of researches clearly illustrate money has been the premier subject matter of argument.

Money management in itself is a task hard enough, and inclusion of your partner in the equation makes it even more complicated. Therefore, rather than being emotional or reactive on money related matters, couples should be clever, calculated and decisive.

Anyone can tend to make a financial mistake, when their emotions overwhelm. Here, we will try and understand what mistakes couples most commonly tend to commit when handling money concerns. Also, get to learn some set of advice on fixing these issues.

1. Keeping check on your partner’s spending:

Not too surprising but true, spending is another very common reason why couples resist each other’s beliefs. The blame game then begins over the spender and the saver approach. Research shows that men and women tend to spend equally, however differently. Because of this difference in the spending patterns, the perception too becomes a little different. The overall solution lies in identifying the real problem.

 2. Investment:

When it comes to investment, men are more open to take financial risks compared to their counterparts. In financial investment, couples should always make wise decisions with each other’s mutual consent over their investment goals. Couples should review their investments together once a year, just to ensure that both of their portfolio should balance each other.

3. Being secretive over money matters:

Talking about finances in a relationship may be delicate, but a very necessary topic of conversation for a couple. Talking about sharing your household expenses, big item debts like cars, credit card payments, etc., can always be helpful. You may also consider mapping out the logistics. Don’t ignore your long-term goals as that may assist your saving approach. Always remember that big financial secrets may even end up ruining a strong relationship.

4. Planning for an emergency time:

Even with a well-settled career and a comfortable living without a worry for any kind of debts, one may sometimes find oneself sorely unprepared for an emergency. Lives nowadays (both personal and professional) are so stressful that one has a risk of any adversity happening to him/her.

In such cases, you may even find yourself completely off-track without an emergency savings account. Couples usually have a tendency to raise their panic button in time of an unexpected emergency. This could even lead one to make incorrect decisions. Therefore, all couples should have an emergency fund investment equivalent to their 3-6 months of living expenses to be guarded in a safe place.

Just knowledge of having an emergency stash can largely lessen your stress, as you have prepared yourself from crossing the line from comfort to calamity.

5. When to do the personal finance merger?

Combining your accounts may seem quite a fascinating option for couples, but the same can also give rise to a lot of problems at the time of relationship break-up. With only one person’s name on the title of an investment in shared assets like a home or a car, can lead to chaotic and confusing split situations.

Looking at the other side of it, a number of couples believe in having the financial independence with separate bank accounts, keeping aside all the other legalities. Over time, merging finances may be a feasible option to go for. Till then, there is no urgency. You may consider keeping calm, until you have enough faith in your partner to be your ultimate soul-mate for life.

6. Managing Debt:

This is one factor over which most disagreement tends to happen. Couples often overlook on things like what kinds of debt are bad and how much debt can be too much to handle, etc. Here, the married couples should pay down their debts as quickly as possible, without much delay. And couples yet to marry should ensure to protect one person’s assets from the other’s creditor.

In a relationship, no one would ever want that he/she has to seek permission from the other before taking any monetary decision. One would never want to get into a position of being a kid, where the other person (your spouse) may start behaving like your parent. You will want to have your own money sometimes in life, and just do whatever you want to. After all, it’s your money and you should be ensured of its whereabouts and management.

The author is Ramalingam K, an MBA (Finance) and Certified Financial Planner. He is the Director and Chief Financial Planner of Holistic Investment Planners (www.holisticinvestment.in) a firm that offers Financial Planning and Wealth Management. He can be reached at ramalingam@holisticinvestment.in

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7th Pay Commission: Government issued Notification; central govt employees, pensioners to get increased payout for August

The Finance Ministry has notified the salary hike based on Seventh Pay Commission recommendations. This means that lakhs of government employees will receive higher salaries likely from next month. The notification is dated July 25, 2016.  About 1 crore employees and pensioners will benefit from the pay hike, effective from January 1, 2016. 

Here are the key highlights of the notification: 

1) According to the pay new structure, the existing basic pay as on December 31, 2015, shall be multiplied by a factor of 2.57.

2) The arrears shall be paid during the financial year 2016-2017.  

3) The  Seventh Pay Commission's recommendations  on  allowances  (except  dearness  allowance) has been referred  to  a committee, which will submit  its  report  within  four  months. All allowances will continue to be paid at existing rates in existing pay structure. 

4) There shall be two dates for grant of increment January 1 and July 1 of every year, instead of existing date of July 1.

5) The  recommendations  of  the  Commission  for  increase  in  rates  of  monthly  contribution towards Central Government Employees Group Insurance Scheme (CGEGIS) for various categories of employees  has  not  been  accepted.  The existing rates of monthly contribution shall continue.

6) The Finance Ministry will work out a customised group insurance scheme for central government employees.

7) The  recommendations of  the  seventh pay commission  relating  to  interest  bearing  advances  as  well  as interest free advances have been accepted with some exceptions. 

8) Committees  will  be  set  up  by  Department  of  Personnel   to  examine individual,   post-specific and cadre-specific anomalies  arising   out   of   implementation   of   the recommendations of the Commission.

9) A  committee  will be set up to suggest measures for streamlining the implementation of the National  Pension System (NPS).

10) Hike in Salary & Allowances – There are around 47 Lakh government employees in country. As per the report there will be hike in Basic Salary as well as in allowances. Here are the details –

Hike in Basic Salary – 16 Percent

Hike in Allowances – 63 Percent

Overall Hike in Salaries – 23.55 percent

Talking about the allowances, a great news is that there is significant increase in the house rent allowance. It has been increased by 139 percent

• Pension – All the government employees who have retired are focusing on the pension section. The government has also focused equally and decided to increase the pension by 24 percent.

• Minimum and Maximum Salary Fixed – An important step that has been taken is that the minimum and maximum salary has been fixed as per the recommendations. Here are the details: –

Minimum Salary – Rs. 18000 per month

Max Salary (Employees) – 2.25 Lakh per month

Salary of Cabinet Secretary – 2.50 lakh /month

• Health Insurance Scheme – As per the reports, health insurance scheme can be included.

• Annual Increment – An annual increment of 3 percent will be awarded to the central government employees.

• Military Service Pay – Military Service Pay(For Armed Forces) has been fixed to Rs. 15,500 per month

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Standardisation of Guidance Notes issued under the authority of the Council - (22-07-2016)

No.1-CA(2)/Misc./2016                                                                                                                                                   22nd July, 2016

To: All Secretaries of Non-Standing Committees/Boards

Madam/Dear Sir,


Standardisation of Guidance Notes issued under the authority of the Council 

The Council at its 349th meeting held on 17th-18th January, 2016 has taken the following decisions in respect of standardisation of Guidance Notes issued under the authority of the Council: 

1.   The basic structure of the Guidance Note may include guidance on the Background/Introduction, Scope, Objective etc. so as to give the reader a brief idea of the topic for which the guidance is being provided. Thereafter, the descriptive narrative for the guidance may be followed. However, as the narrative related to the guidance on the topic is subject-specific, it should be left to the wisdom of the Committee concerned. 

2.   As far as possible, all the paragraphs in a Guidance Note should be numbered consecutively. 

3.   There should be a scheme for numbering of the Guidance Notes and these numbers should be allocated by the Publication Department of the Institute since it also issues an ISBN number for each publication printed by it. Further, Guidance Notes on Accounting may continue to be numbered as per the existing scheme in vogue i.e. GN(A) (year of issue/revision). The Council suggested Guidance Note on Auditing may be GN (A&AS) (year of Issue/Revision) while those related to taxation audit may be GN (TA) (year of Issue/Revision) etc. 

The Council, at its 353rd meeting held on 2nd-4th May, 2016 took the following further decisions on the above subject: 

4.   The draft Guidance Note should be exposed for public comments for a period of at least 30 days so that input from large stakeholders may be taken into account. For this purpose, mass emails should be sent to all the members informing that an exposure draft of a Guidance Note was open for public comments to reach the major stakeholders. 

5.   All Regional Councils and major branches should also be requested to constitute their study groups for considering the exposure draft of Guidance Notes issued for public comments and send their comments to the concerned Committee/Board for consideration such that inputs from large stakeholders may be taken into account. 

6.   In exceptional cases, when it is not possible to issue an exposure draft owing to paucity of time, since a Guidance Note is to be issued urgently, the draft Guidance Note may be placed for the consideration of the Council with the approval of the President-in-office. 

The above decisions of the Council may please be complied with while issuing a Guidance Note.

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5 traits of a poor financial advisor

1.       How do we decide upon choosing a good financial advisor?

A person can be termed as one, who is a true value addition to your financial wealth as well as provides you with profitable advice to enhance your quality of life. In other words, any person qualified enough to advice you on your fiscal matters so that you gain the confidence to follow that advice. This was just a brief definition for a right financial advisor.

Now, let us look at the other side in more detail. Thereby, let us try figuring out a few points below to help you decide that the advisor with those characteristics is not the right one for you.

2.       Behave in a condescending manner:

Not all clients seeking advice have to be necessarily cultivated and polished, on their financial matters. Such people may also take much interest in their money matters. Yet for a financial advisor, it is always a duty to explain the reason behind his course of action. Also, he should illustrate his financial product in a way that makes sense to the client end. In a case where you feel that your advisor is letting you down or fooling around you, then be assertive about never to trust upon such an advisor.

3.       No reply to calls and/or mails:

It is obvious for a good financial advisor to be busy, but not so that he does not have a fair amount of time for his clients. Doing this should be unacceptable, and clearly shows your lack of importance in the advisor's schedule. The optimal way, whenever a client makes a practical request, is to receive an early response to their queries. There is no sense in paying your advisor, if he is not devoting his sufficient amount of time into providing you the right financial advice.

4.       Absence of honest opinion:

For a healthy relationship between client and advisor, an honest and open communication are two very important aspects. This should exist on both sides. Sometimes, the client may express his desire to go for a particular investment. In such cases, it is the duty of a good financial advisor to keep his client informed about the rights and wrongs of the particular financial investment. If the advisor does not do so, he is lacking in his service delivery. After all, it is the money of the client that the advisor is advising for. A good advisor will never flatter his clients, just for earning his commissions and fees.

5.       Deny you seeking help from a third party overseer:

Never trust upon a financial advisor, who prevents you from having your account with a caretaker involvement in between. Wondering how having a mediator in between will be beneficial? A third party custodian will send you statements independent of your advisor, and in usual cases will also offer you the online accessibility for your account.

        6. Focus on personal interests:

This is among the most common issues arising, when dealing with commission (or compensation) based advisors. For example, the advisor might recommend you for investments that may not be the best solution for you, but is beneficial for him otherwise. Therefore, it is always good to be alert and safe by asking more questions. This will help you understand your advisor's compensation techniques, and check if the same can ever be a conflict of interest to the advisor in providing the apt advice.

Therefore, the points stated above should be considered as the least characteristics that one should look for in his financial advisor.

         Conclusion:

For an advisor exhibiting any of these features mentioned above on a regular basis, is a clear indication for you to begin looking for a new financial advisor.

The author is Ramalingam.K an MBA (Finance) and certified financial planner. He is the Director & Chief Financial Planner of holistic investment planners (www.holisticinvestment.in) a firm that offers Financial Planning and Wealth Management. He Can be reached at   ramalingam@holisticinvestment.in

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CA IPC May 2016 Examination Result likely to be declared on 2nd August, 2016

The result of the Chartered Accountants Intermediate (Integrated Professional Competence) Examination held in May, 2016 is likely to be declared on Tuesday, the 2nd August, 2016 around 4.00 P.M. and the same as well as the merit list (candidates securing a minimum of 55% and above marks and upto the maximum of 50th Rank on all India basis will be available on the following website: 

                                        http://www.icai.nic.in

Arrangements have also been made for the students of Intermediate (IPC) Examination desirous of having results on their e-mail addresses to register their requests at the above website, i.e., http://www.icai.nic.in from 27th July, 2016. All those registering their requests will be provided their results through e-mail on the e-mail addresses registered as above immediately after the declaration of the result. 

In addition to above, it may be noted that for accessing the result at the above website i.e. http://www.icai.nic.in the candidate shall have to enter his registration no. or PIN no. along with his roll number. 

Further facilities have been made for candidates of Intermediate (IPC) Examination held in May, 2016 desirous of knowing their results with marks on SMS. The service will be available through India Times. 

For getting results through SMS candidates should type: 

CAINTER(Space)XXXXXX (where XXXXXX is the six digit Intermediate (IPC) Examination roll number of the candidate) 

e.g. CAINTER 302971 and send the message to 

58888 - for all mobile services - India Times

(B. MURALIDHARAN)
DEPUTY SECRETARY (EXAMS.)


tags: CA IPC, ca ipcc, Results, ca ipc may 2016 result,

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Setting aside the bad insurance policy is a good investment policy

Setting aside the ‘bad insurance policy’ is a good investment policy

What is a Bad Insurance Policy? 

Did your last insurance policy assure you only insecurity after you bought it? Do you feel that the insurance policy which you have just taken does not serve your purpose? Or, is it that the policy does not give all that your advisor promised you it would, while selling the policy? If this is so, then you need not despair, help is at hand. The fine print in insurance policy documents can be devastating at times for some policyholders, but recourse to such problems is now available.

Insurance policies are long term commitments. They require due diligence in the form of timely annual premium payment. If it so happens that after having taken the policy it turns out to be something other than what you had bargained for then you need to act swiftly. Timely action will ensure that you do not have to continue with the policy if you really do not need it. There is no need to continue paying the premiums and regret your decision.

Recourse during the Free-look in Period: 

Any policy can be terminated within 15 days from the receipt of the policy document if the holder of the policy finds it unsuitable for his purpose. The insurance company will then refund the premium amount after deducting the proportionate amount for the period of cover, the cost of conducting medical checkup and the stamp duty paid towards the policy.

Recourse through Grievance Redressal: 

Policy holders also have other options for their grievance redressal. They can lodge a formal complaint with the insurance company. Usually, all such companies have a definite hierarchy for addressing customer complaints. It is likely that the policy holder’s problems are not resolved at the first level, they can then take it up at the next higher level, if even then suitable action is not taken then the policyholder is within his rights to approach the highest level for alleviation. It is however likely that the policy holder will encounter a lot of resistance from the insurance company simply because he or she is going against the tide.

However, perseverance and the will to pursue the complaint can save the policyholder from monetary loss and the unsavory option of carrying on with a bad policy.

Recourse through IRDA:

Sometimes insurance companies fail to settle the issue of policy surrender in a manner which is acceptable to the policy holder. In such cases, the customers can seek assistance from the Insurance Regulatory Development Authority (IRDA). The IRDA has an Integrated Grievance Management System in place which helps in resolving the complaints of customers.

Recourse through Insurance ombudsman:

In case where the Integrated Grievance Management System fails to provide an acceptable solution, the customer can escalate it to the level of the insurance ombudsman who is an arbitrator of sorts. If, even the ombudsman fails to satisfy the customer, legal recourse is the next level and the policy holder can approach the consumer court.

Recourse through Alternative Routes:

Many a time the policy holder may be reluctant to follow the grievance redressal route, they would rather opt to take recourse of other options available. Premature surrender of policy is such an option. Converting the policy into a partly paid up-policy would also be an option which can be explored by the customer.

Which form of redressal is best suited for the purpose will be decided by the terms and conditions, the period of time elapsed from the date of taking the policy and of course the type of policy. The policy type could be a traditional plan, a money back policy or an ULIP.

Good Investment Policy:

Pursuing the complaint till the last frontier, if necessary, requires resoluteness, besides lots of time, energy and even money. It is often that customers give up hope before an amicable solution is reached but it is worthwhile to remember that this could be the most appropriate move under the situation as against the despairing alternative of having to carrying with the policy and face sufferings.

The author is Ramalingam K, an MBA (Finance) and Certified Financial Planner. He is the Director and Chief Financial Planner of Holistic Investment Planners (www.holisticinvestment.in) a firm that offers Financial Planning and Wealth Management. He can be reached at ramalingam@holisticinvestment.in

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5 Things to take care while choosing the right financial planner

What is the first image that comes to your mind when you think of a financial advisor? A stressed person completely occupied with his phone and PC, buying and selling orders, and trying to make as much money as possible for his present as well as potential clients.

While this advisor imagination stated-above, may still be true for some of the present day advisors, you will also find that many others have moved above just investment planning. They have evolved their practices into a more comprehensive approach in sectors like tax, insurance, budgeting, estate planning, funding, and retirement planning.

In process of searching the right advisor, you also need to clench to areas, where you seek help. Only then, will you be able to determine the skills and expertise of your advisor, thereby examining the right and suitable candidate before hiring. Let us now explore the criteria you may use to do this.

His qualification, knowledge, and his managerial experience: 

Before hiring your financial expert, never hesitate to inquire about his education and relevant experience in the field. It has become quite necessary to examine an advisor well, based on these factors because with the financial industry being bombarded with numerous professional designations, which one can obtain without many efforts.

In case, you are looking for anything different from the everyday guidance, it may be a wise advice for you to hire a certified financial planner, as your representative. These CFPs are of the highest standards in terms of their knowledge compared to the usual advisors. It is necessary for you to have an advisor, who is adept with managing both his personal as well as your finances.

Conflict of Interest:

This is the prime responsibility of a financial advisor that is to, act in your best interests. He/she has a position of special trust and confidence in the investors’ minds. In the finance & investment world, it is in the advisors’ best interest to abide by the standards of their investors, which the CFPs can very well take care of.

One should be safe with the stockbrokers, who can be over-glorified salespersons, hired by big wire houses to sell stocks and proprietary mutual funds. The more buying and selling done by a broker in the investor’s account, the higher is his commission payout. However, excessive of this, known as churning, can sometimes result in investments that might not be appropriate for the investor. Therefore, it is also important to take care of the quality along with increasing the quantity.

Understand what you give and what you get back: 

Once you have found your advisor, it is now time to get a little deeper to clear up some more issues on a one-to-one basis. Firstly, beginners need to understand about how to pay the advisors, whether on the basis of fees or of commission. In the recent times, more investors are shifting every year from the traditional commission approach towards the latest fee-based one. As this fee-only approach is a new concept, it tends to surround investors with certain common questions, like that about the fair fee and the billing system.

Therefore, it is necessary for investors to find advisors, who can package a program, including the investment costs, and costs of trading, custody and planners’ professional services. Since, most deals now bill on an annual basis, so one needs to know how to pull a sweet deal. Then, you can discuss with the advisor about the frequency of your meetings for reviewing your portfolio.

Find a true comprehensive financial plan: 

One needs to have a general idea of his/her weaknesses prior to selecting the professional assistance. These will help you determine what kind of financial planning firms to look forward for help. Then, understand the services available with the firm you choose.

While doing this, consider about whether it will track your investment based on costs, and whether it will help you file your tax returns and find solutions to other tax related queries. In addition, also know about its risk management abilities, estate-planning assistance, and whether or not, it will refer you to other professional service, if it cannot provide the same itself.

What else to look for?

Efficient financial advisors are like life-coaches, as they help you get through some of the life’s most complex financial decisions, such as buying a car, refinancing for home mortgage, etc. They deal with such things on a daily basis, and thereby know if you are paying too much for something.

Good advisors also help you reach your goals, save money in insurance matters, and other such decisions throughout your lifetime. To have an even better experience with your advisor, allow him to review your legal documents, share your concerns (if any), and most importantly, entrust upon him to take care of your money.

Bottom line:

If you take adequate care in selecting a right financial planner, the financial planner you selected will take care of your personal finances right.

The author is Ramalingam K, an MBA (Finance) and Certified Financial Planner. He is the Director and Chief Financial Planner of Holistic Investment Planners (www.holisticinvestment.in) a firm that offers Financial Planning and Wealth Management. He can be reached at ramalingam@holisticinvestment.in

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