Financial Advisor Fees, Cost & Charges in India
Financial planning is not a commodity, and standardization is therefore not feasible. How much a financial advisor costs and charges is dependent on the criteria and the package of the financial planner, i.e. selective or comprehensive) service and procedure involved in financial planning.
How Much Does Indian Financial Advisor Cost?
Let's learn about what the job is to find out the best estimation of a financial advisor's fee and how are you able to benefit from them. Financial advisors, in short, are responsible for:
Establishing a comprehensive strategy to achieve the financial objectives.
Invest your wealth in the most productive way possible and expand it.
Assists in preventing the filing of heavy taxes.
Manage risks by building reserves that are pre-planned.
In order to beat inflation, control savings.
The annual fee for financial advisors varies from as little as Rs 6,000 to Rs 40,000. In terms of investment planning, risk management, asset management, and tax planning considering inflation, uncertain employment, health issues and potential financial ambitions such as higher education, early retirement, travel, etc., people are increasingly seeking advice from a financial advisor nowadays.
Different Forms of Financial Advisor’s Fees
The cost of not all financial advisors is equal. It should be possible for a trustworthy financial advisor to easily explain what all the ways he adds value. It is best to stay away from them if a financial advisor gives an ambiguous or roundabout reaction. The payments should be negotiated up front. It is also advisable to avoid financial advisors asking you not to worry about the fee for financial planning.
Based on Commission
Financial advisors based on the commission claim themselves to be a "free financial planner" that looks very attractive from the outside. But there is always a catch. Commissions from financial or insurance products you purchase through them are paid to financial advisors. They get a commission for the product sold when you invest money in a policy through a planner.
Based on Assets
Usually, as financial advisors handle the money of clients, they charge 1% of the assets per annum. If your financial advisor excuses the management of a 2-crore portfolio compared to a 20 Lakh portfolio by telling you that it is 10 times more difficult than a 20 Lakh portfolio, then he is trying to cash in on your ignorance.
Based on Results
This is a way for clients to obtain better returns on investment from financial advisors. In this situation, a simple flat percentage fee for their service and an additional percentage fee are also charged to financial planners depending on the higher returns after a certain amount, which is originally determined by both the financial planner and the client.
Fixed Fee or Flat Fee
Financial advisors charge a flat fee for their service, from preparing a financial plan to annual reviews to personal consultations. To complete a specific project, some financial advisors fee, and some even charge on an hourly basis. This form of charge has been welcomed for its efficacy by top accredited financial advisors and people all over the world. The fixed fee paid by the financial planner is not dependent on the volume of the investment and is therefore not the result of the acquisition of such investments as a commission. And you can be confident of the financial planners' professional guidance, who charge flat fees.
Based on different views, financial advisors can have different methods, and so the process may vary from one to another. It's up to you to settle on a particular process and work with a financial advisor, so make sure he does everything with your best interest. Always note, those who have your best interests at heart are the best financial advisors. For the same thing, you should reach out to reputable franchises like IIFL in order to stay bullish on your future by becoming a financial advisor.