Given the high degree of conflict of interest and mis-selling prevalent in the Indian financial services space, I will agree that it is a big task in itself to select a good financial advisor in India. Thankfully, there have been some very good regulatory changes in 2013 with release of SEBI releasing the Investment Adviser Regulations, which has made the task of selection of advisor a bit easy (or I’ll say a little less painful). The regulation does a very important work of segregating advice with execution and mandates the right disclosures and compliances for an investment advisor, which is in the long term interest of clients.
Given this background, let us come to why CA Abhinav Gulechha, & here are a few points for your consideration & which can help you decide whether I am a right fit for you or not:
#1: I am a Chartered Accountant and also registered with SEBI:
Chartered Accountancy is a gold standard in India w.r.t. Income tax and FEMA law interpretation and advisory & I am active in the CA CPE study circles community in Mumbai in learning & sharing my knowledge & developing deep networks with the CA fraternity for benefit of my clients.
I am also registered in “Individual” category as “Investment Adviser” with SEBI. [SEBI Reg. No. INA000001167 valid upto 02/03/2019]. This represents my strongest vision and focus to act with the fiduciary standard of highest care (for general meaning of fiduciary standard, read this) towards my clients and fully comply with the law of the land on investment advisory services.
As regards investment advisory, you may ask what difference it makes whether an adviser is SEBI registered or not. In my view, a lot. When you hire a SEBI registered adviser, you can be rest assured that:
- The adviser adheres to the minimum education and experience criteria mandated by SEBI to practise as an investment advisor in India
- The adviser adheres to the fiduciary standard of highest care towards the client – in simple words, he/she exercises the same due diligence & care towards the client’s money as if it were his/her own.
- The adviser does not have a conflict of interest in his recommendations & if they do arise, they are promptly communicated in writing.
- The adviser will do an investment risk profiling & the recommended products, will have a clear cut basis in the form of suitability analysis, rationale for investment advice & investment policy statement.
- The advisor is subject to an annual audit on the compliance of SEBI regulations.
- There is a clearly documented grievance redressal mechanism.
#2: I work as a Fee-Only adviser, which is the purest model of investment advisory:
After SEBI released the IA regulations, some 500+ advisers have registered as investment advisers till date. SEBI aims to segregate advice from distribution but fails by keeping one small door open – you can still sell products provided you disclose this to your client. My core belief is disclosure on conflict of interest is WRONG. It is my belief that when it comes to financial & investment advice, there should be NO conflict of interest in the first place. So, in a situation where an adviser claims to be fee-only, he/she can actually be selling products through spouse/ relatives which in my view completely dilutes the principle that advice should be separated from execution. And this is where I am different. I do not have any such tie-ups or arrangements for product selling & I do not get compensated by anyone other than the client.
So you might argue it looks good in paper but how does this actually benefit the client in monetary terms? So, let us take example of mutual funds. I ensure that my clients subscribe/ transition to direct plans of mutual funds which, due to lower expense ratio, can over time result in a sizeable differential in terms of overall returns from the MF portfolio. Note that direct plans are something that only a pure FEE-ONLY adviser will want to recommend. Others will give you this option but will also gently nudge you to invest through them (you get my point:).
So, I can say that my practice is purely on the lines of a doctor’s or a CA’s or a lawyer’s practice. It takes time for general public to see the merit & savings in going through a fee-only mode but over time, results of my advice will shine and show better returns to justify the client’s choice in hiring me.
#3: I have a laser sharp focus in my niche i.e. NRI, Seafarers and Expats:
Over time working with clients, I realised that I cannot serve all & HAVE to zero in on a particular niche or a segment so that I can understand the needs better and provide the best possible value to that segment (read this article). My work with returning NRI clients and the satisfaction I got in solving their problems, & the associated challenges an NRI or a seafarer or expat faces with respect to tax and FEMA issues & my alignment to those problems in terms of my CA background made me choose this niche. I am amongst the very few in India who specialise in such cases.
So, if you are a NRI/Seafarer/Expat client, having me as your adviser has the following obvious advantages:
- Since I work on a daily basis in helping NRI clients, I am more adept and skilled in understanding the issues of this segment & can provide better insights/ solutions.
- A significant part of my work time goes in LEARNING, READING & writing on financial issues that impact NRI/PIO. So, I am in touch with the latest developments & changes in laws & regulations that help you get on-time and right advice tailored to your needs.
- I have built my own handpicked advisory board of CAs/Lawyers to get external perspectives on NRI issues.
- Even on the non-financial front, I keep on researching on things like best relocation service provider, healthcare assistances for elderly persons, property managers for properties in India which can be a real value add in terms of my NRI/PIO clients get a holistic advisory which is not just limited to financial but also on other critical aspects of their return to India journey.