Next time, while visiting your
bank branch even if you go there
to simply deposit a cheque, chances are you may be approached by your a
persuasive bank relationship manager you
to buy a mutual funds or insurance
products. They may offer incentives such as lower-fee transactions or free
checking if you are an investment or demat account at their bank.
Many banks are offering investments services to their customers. These
services are generally targeted to very specific customers who have large
amounts of money at the bank like NRIs and HNIs etc. If you are just beginning
to invest, your bank may not contact you to offer these services, but they may
be available to you. These services offered are similar to the role of a
financial planner or advisor.
As a bank financial advisor, this
individual is typically an employee or sub-contractor to the bank and has
access to the bank’s customers. This provides a way to further meet the
financial needs of the bank’s customers through the offer you a wide variety of investments as well as
life insurance options. When considering the question of whether your bank
financial advisor is reliable or not, several questions should be asked.
Area of Expertise
Understanding the individual advisor’s area of expertise in the
area of financial planning and/or investment management, as well as their
licensing, experience and education are important. A good financial advisor will listen to your
goals, and understand the amount of risk you are willing to take and then be
able to find products that match those goals. Additionally, s/he should be able
to explain the risks and benefits of each investment option and explain the way
that you should spread your investments out over several options and in
different risk categories in order to protect yourself. If s/he cannot do this
then you should susceptible on their advice. Asking questions of your advisor and seeking verification of
their licensing and approach to planning will serve your interests and answer
any concerns you may have about their level of expertise.
Banks want to sell their own Products
Generally, gullible people choose to use their bank because they
feel that their bank financial advisor is more trustworthy or because it
simplifies the process of seeking for an independent financial advisor. It is important to consider the way that the bank
financial advisor is always paid. A person that is paid entirely on commission
may be more likely to suggest products that do not fall directly in line with
your investment comfort level. As you look for a financial advisor, you need to
consider all of your options and not just choose the one that is most
convenient.
You need to continually ask yourself if the products and advice
being offered will benefit your individual finances, whether you could get a
better deal elsewhere and, if you have to pay for them, whether they represent
good value for money. Although a bank financial advisor at a local bank may
make sensible financial suggestions, they will only have access to the bank's
own products.
As a result you need to take a pragmatic approach to banking and
drop any sense of bank being ‘your’ bank, even if you find the staff in branch
polite and helpful. After all is this really worth compromising you
finances for?
Making Choice for Financial Help
When you
are looking for a financial planner asks your friends and coworkers for
recommendations, find out about the services offered through your bank,
interview the planners and then make your decision. While you should not choose
your financial planner just because he works at your bank, you should not rule
him out completely either. You should also interview several and make sure that your
financial advisor can explain the investment options to you and then will let
you make the choice.
If you
have a question about managing your money, want to sound out ideas, or could do
with a second opinion why not ask the www.prudentfp.in who will be able to share their knowledge and
experience with you.
Of course, you can also get free the
latest financial news, guides and deals straight to your inbox by signing up to
our services.
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