In an interview with Pooja Chopra Goel of Myiris.com, Ashwani Tiwari, Chief Planner, Wealthmate offers some thoughts on successful long-term investing, market volatility, his favourite funds and more.
Wealthmate is promoted by Ashwani Tiwari, a certified financial planner with over 7 years of experience in financial markets.
Can you tell us about `Wealthmate` and its mission & services? What services do you offer?
Wealthmate is a boutique investment firm and its mission is to be a true companion of clients in wealth creation so as to help them achieve their financial goals. We strongly believe that client interest is paramount and foremost, therefore we use in depth research and knowledge-base to empower clients for better decision making. We use state of the art technology to service our clients and customize solutions to client needs.
We broadly offer financial planning, investment advisory and wealth management services. Our major focus area is wealth management wherein we manage client funds in fiduciary capacity with proprietary asset allocation tools and for that mutual funds strongly compliment our work. Under our investment advisory service we occasionally advise clients on direct equities based portfolio but we selectively work with few clients who understand market risks well and are well informed on equity markets. The financial planning part is in nascent stage and here we focus on goal based investing so that it compliments important milestones for the client and also help in risk mitigation through use of term insurance and health insurance policies.
Who should think about getting a financial advisor? Is it just for the wealthy or can anyone use the services of a financial advisor?
I think a financial advisor is paramount for clients across all spectrums. Unless someone is in true sense a market professional himself, there is no way one can overlook the need of a financial advisor. I think someone who has already created wealth needs a financial advisor to preserve and grow that wealth in a manner which aligns with his financial goals. On the other hand of the spectrum, someone who is yet to accumulate wealth needs a financial advisor so that he can be set on a path of creating wealth. So broadly a financial advisor does a great value addition for a small cost and therefore I am convinced that a quality financial advisor is a great asset to any client.
How does a financial advisor make his living and is there any conflict of interest between him and his customers?
I think majority of financial advisors get compensated through the commissions which they earn by selling the financial products to their clients. Even globally leading advisors get compensated through similar models. Fee-based revenues have made its mark in the global scene but in India it is still in nascent stage.
I think there is enough room for conflict of interest situation when one is getting compensated through sale of financial products and this is where an ethical advisor gets segregated from an unethical one. I think client interest is most important and also the quality of disclosures is very important. If one has high level of transparency with clients then an advisor can work with minimal conflict of interest.
What is one misconception about financial advisors you would want to refute?
I think the biggest misconception about a financial advisor is that a financial advisor can be a quick fix solution to any financial crisis situation. It generally requires lot of patience and belief for quality results to actually show up. Building wealth takes time, patience, and discipline. Sometimes a complete multi-year market cycle can test patience of the client and the advisor to extremes. Therefore, it is important that client carefully chooses a financial advisor and similarly a financial advisor must exercise due diligence before he accepts a professional relationship.
With the internet and 24-hour business channels, is the average investor being overloaded with information?
I think it is in the best interest of the client if he selectively accesses the information on internet or through business channels. I think it is good to be well informed but accessing too much information is not only overloading but also detrimental for ones investments. I think here the need of quality financial advisor is highlighted as he would be the one who can help the client with quality of information and knowledge.
Has the no-load regime affected your business?
No load regime has actually helped us grow because the loss of revenue has been compensated by increase in assets. Also since our asset mix carries reasonable allocation to debt component so there is actually no significant loss due to this regulatory change.
How many fund houses do you deal with? In which fund house do you have the maximum AUM ((in terms of percentage)? Tell us your favorite all-time MF schemes and fund managers.
We work with about 7-8 fund house. In majority of them we are comfortable only with their flagship schemes which compliment with our portfolio creation methodology. Majority of our assets are spread across Franklin Templeton MF, HDFC MF, Birla Sunlife MF and Canara Robeco MF. The percentage share ranges from 15-20% of our assets among the mentioned fund houses. Some of our favourite funds on basis of our portfolio creation methodology are as follows:
Large Cap (Diversified): Franklin India Prima Plus, HDFC Equity Fund
Mid-Cap: IDFC Premier Equity Fund
Value: DSP Blackock Equity Fund, TATA Equity PE Fund
Balanced: HDFC Prudence, Birla Sunlife`95
Hybrid (MIP): Canara Robeco MIP, Birla Sunlife Monthly Income
Debt (Duration based): Birla Sunlife Dynamic Bond Fund, Canara Robeco Income
Debt (Accrual based): Templeton India Short Term Income Plan
Our favourite fund managers on equity side are Prashant Jain (HDFC Mutual Fund), KN Sivasubramanian (Franklin), Kenneth Andrade (IDFC) & S. Nagnath (DSP Blackrock). On the debt side, our favourite managers are Ritesh Jain (Canara Robeco), Maneesh Dangi (Birla Sunlife) and Santosh Kamath (Franklin).
What`s been the most common reaction from your clients as the stock market has gone on a wild ride? Is there one particular type of investment you recommend that can weather these conditions?
Generally we refrain on commenting on day to day market movements but certain situations like the recent volatility does have an impact on the clients. A prolonged period of negative return in equity markets can upset even the most avid investors and therefore, it is important to directly align the client goals with expectations before initiating any form of investments. I think most of our clients understand long term nature of equity returns and market cycles and therefore, they allow us longer time frames before evaluating equity performance.
As a strategy we prefer that all our client equity portfolios should have atleast 1 balanced fund and MIP which can automatically rebalance asset allocation because many a times the client inflows may not always align when market offers opportunity. I think this is the reason we find that most of our clients have some stability in equity portfolios even in testing times.
Is there anything else you would like to share?
I think in this profession knowledge is the edge. Therefore, I think advisors must constantly upgrade themselves because this is what is going to differentiate them in the long run. Advisors who are handling large amount of equity portfolios must develop some additional competencies on technical analysis and understanding on behavioural finance which I think are imperative. And last but not the least I think it is our moral duty to spread financial literacy among the young so that they can sow better seeds for a brighter future.
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