Ongoing Advisory Engagement

Some people would be content with just a financial plan. They may be comfortable in carrying out the recommendations themselves & do not need any further inputs from our side. In such a case, our engagement comes to a close after the plan is created and delivered.

However, Financial Planning is an ongoing exercise. Financial Plan is just the start of the journey. Many of our clients want us to provide them advisory inputs on an ongoing basis as also assist with the implementation, management & reporting.

To get the best value from the financial plan, we have ongoing engagements which help in unlocking the value of the planning process. To ensure & facilitate that, we have come up with a perpetual engagement model where we would offer ongoing client engagement sessions, plan and portfolio reviews at regular intervals as well as financial consultations throughout. This engagement is ongoing & you could enjoy the benefits, on a perpetual basis. We would even redo the plan or even completely recreate the plan in future if required, as a part of this engagement.

Implementation of the plan recommendations is a critical component while trying to unlock the value of the planning engagement. Due to a paucity of time and lack of experience in handling implementation, many clients implement recommendations partially or even wrongly. To assist our clients, we have Implementation Partners who would onboard our clients on an online platform, facilitate implementation & provide reporting and back-office support.

As our client, you derive a plethora of benefits & tremendous value from your advisory engagement with us. The biggest benefit is that you are dealing with a fee-only, fiduciary advisor.

There are multiple benefits arising out of seeking our counsel and being engaged with Prudent Financial Planners. Being engaged with a conflict-free, fee-only client-centric adviser presents monetary & non-monetary benefits.

In this service, we are bringing out many of the benefits arising out of the advisory engagement with us.

Monetary Benefits

Advisory Wealth effect – The full potential of one’s savings is never realized in the absence of a capable advisor. We have seen this in case after case. There is a massive difference between the wealth created when an advisor is present & one in which one may be doing things on one’s own.

At the very least, the advisor brings in discipline & regularity in investments. The advisor would also review the portfolio, weed out non-performers & bring in good candidates as necessary.

Direct MF plans – lower costs to you – We may suggest you opt to get Direct Plans which may be cheaper than Regular Mutual Fund Plans with agreed investment fee at your discreation. At a portfolio level for MFs, the difference is about 0.8-1% pa. On a Rs.1 Cr portfolio, that’s a savings of Rs.80,000 – Rs.1 Lakh.

MFs would form a major component of the portfolio & hence this savings will be on a big portion of the overall portfolio.

Insurance products at a lower costs – We will suggest only Online Term Plans for Life Insurance purpose and Online Health Insurance Plans for hospitlization expenes, which are cheaper than Offline or through any Agent. At a protection level for insurance, the difference is about 15%-35% pa. On a Rs.1 lakh premium, that’s a savings of Rs.15,000 – Rs.35,000 p.a.(Offline Agents commission)

Complimentary e-filing Income Tax Return – We will provide annual complimentary annual e-filing income tax return for our those existing clients including their spouse on every renewal of our ongoing advisory engagment service, which is both chargeable a fee seperately to the tune of Rs 1200-Rs 4000 p.a. from any tax consultants or CAs or by us.

The total cost savings again here would be significant.

Tax efficiencies – We suggest to invest in products which are the right fit in your portfolio & are tax efficient for you. Such tax efficiencies would save a significant amount of money for our clients.

New Investments done as well as the existing investments would be looked into & reallocated, considering their risk-reward structure, tenure, taxation etc. In this process, we end up unlocking better tax adjusted returns.

Efficient money management – We help in managing the money efficiently, tailored to individual client situations. Money for the various goals & upcoming needs are invested in the right assets, after proper evaluation of risks, liquidity, taxation, tenure etc. Even liquidity & contingency margins are invested in appropriate vehicles to ensure better returns.

If you are looking for Complete Organising of your Financial Life, make suitable Investments, getting out of non-suitable Products, and have a disciplined process oriented Financial Plan, this service is for you.

Non-Monetary Benefits

Conflict-free advisors – We are fee-only advisors & Fiduciaries. We don’t sell any products & do not suggest anything with the ulterior motive of receiving commissions. You can trust us implicitly. You can now relax in the secure knowledge that you have an expert with you & s/he will always act in your best interests!

Streamlined & Aligned Portfolio – We will be doing portfolio reviews from time to time to ensure that the investments done are in alignment with your life requirements. We carry out portfolio reviews on a half-yearly basis. However, we keep monitoring the entire financial space & suggest any corrective actions, if necessary,

Avoid Big mistakes – Often money mistakes drain away huge amounts of money. Wrong insurances, PMS products, Structured Products, Chit funds etc. may not be suited to you and can be avoided if we are there to provide you counsel. Even one may be saddled with wrong schemes from MFs, which are detrimental to one’s situation in life.

Decision optimization – We help our clients to take the right decisions across multiple areas like loans, Insurance, key decisions like home purchase, foreign education of children & their funding etc. We help our client to choose the right product in every area, be it insurance or investment, to ensure the best outcomes at optimal costs.

Sounding board – Clients have no one to turn to, when it comes to finances. We are a sounding board to our clients, bringing sanity & refinement to their financial decisions. We are true, conflict-free advisors who have only our client’s interests at heart. We are Fiduciaries.

Our clients can turn to us for counsel on financial matters and be assured that they will get good, aligned advice. We ensure clarity and peace of mind.

Gift of Time – If you do it yourself, a lot of time needs to be spent on implementation. Also, all these needs to be done during the week, which will clash with the regular working hours. This can result in part implementation, procrastination & sub-optimal outcomes. When our operations team is involved, they implement many of the suggestions & save a lot of your time.

Many services subsumed here – You do not have to pay separately any longer in future for Plan creation, review, recast, portfolio review, implementation, financial consultations etc. for all of which you would have had to pay otherwise. The saving here over a five year period will be several lakhs of rupees !

A Variable Fee

We charge a variable fee depending on the bouquet of services one is choosing, the amount of work involved and the level of engagement needed. It is Asset under Advice (AUA) based and will vary based on the number of assets we advise on.

Hence, you need to understand that a AUA based variable compensation is what makes the engagement win-win and motivates the advisor to work hard in their client’s interest.

When responsibility increases, the compensation should increase. The CEO of a company is paid a very high salary as compared to other employees – not because he is spending anymore time for the company – but because he takes the responsibility for the growth of the company. We take full responsibility for our client’s finances and future and act as their personal CFOs and hence need to be compensated well for our oversight.

Since we are SEBI Registered Investment Advisors ( RIA ) & Fiduciaries, we are authorized to charge the maximum at the rate of 2.5% on AUA p.a. as per SEBI Investment Adviser(Amendments) Regulation-2013. We only think of your best interests all the time; you can be sure of that as we don’t distribute products & are independent.

We are fee-only advisors. We work in your best interests, always!