The Role of Mutual Fund Advisor in Your Investment Journey

Investing in Mutual funds can seem overwhelming, especially if you are a first-time investor. Many factors determine the success of a mutual fund, such as past performance, risk, market conditions, etc. To have a thorough understanding of these factors would require a lot of research and experience.

Who Is A Mutual Fund Advisor?

A fund advisor is a qualified professional who analyses your current finances, understands your investment goals, and guides you to invest in the best mutual fund to build a portfolio suited to your requirements and financial goals. They have an excellent understanding of various types of mutual funds and are abreast of current market conditions to help you select the right fund for investing.

Difference between a Mutual Fund Advisor and a Manager

There is a major difference between the two. A mutual fund manager is employed by a mutual fund house or an AMC and is responsible for building specific portfolios, keeping the objective of the fund in mind. 
Whereas, a mutual fund advisor’s main job is to sell mutual fund products to potential investors. They work according to the client’s needs and help make the right decision based on the investor’s financial goals.

Why Do You Need a Mutual Fund Advisor?

The primary reason for consulting an advisor is that you might not have all the expertise and knowledge of all the terms, conditions, and technicalities of an investment. Mutual fund advisors stay updated with the latest market trends, economic indicators, and fund performance. Through these insights that the advisors have gathered over the years, they can analyze your financial goals, risk tolerance, and investment horizon to recommend suitable mutual fund options that align with your objectives and goals.

The second and most important reason for having a mutual fund advisor by your side is a lack of time. You might not have time to constantly review your investment, rebalance it, and stay updated on the market. It can be done efficiently by the advisor, and you can optimize your portfolio hassle-free.

Role of Mutual Fund Advisors

●Educating the Investor(s)
●Evaluating the Risk Taking Capacity
●Analyzing Investment Options
●Devising the Right Investment Strategy
●Helping Investors Diversify their Portfolio
●Financial Planning

Regulations by SEBI on mutual fund advisors

Segregation of distribution activities: The majority of the time, the registered investment advisor pitches the investment option that offers the highest commission. Therefore, as per SEBI’s guidelines, the investment advisor must display all the charges and commissions related to the investment option.

Implementation services: The advisor provides many services to the investor. However, the choice should be left to the investor. Furthermore, there should not be any obligation on the investor to avail of the services.

Agreement: As per SEBI’s mandate, for better understanding and legal records, an agreement is mutually signed by both parties.

Fees: As per SEBI guidelines, advisors need to charge fees at the prescribed rates for all their services. However, the fee structure levied by the investment advisor differs from product to product.

Bottom line

Mutual Funds that are dynamic investment opportunities may work out better for your portfolio when navigated through registered mutual fund advisors. They not only understand your goals and risks but also consider market variations and other uncertainties before recommending funds. Remember how easy your life is when you have access to a local guide or Google map while traveling to make your traveling experience the best out of it. You don’t have to struggle with choosing the right path, the same way mutual fund advisors help investors navigate the complexities of the mutual fund industry and work towards their financial goals.