How much Rs.500/- can buy you these days? Sure, we all know, not even the grocery for a week. But surprisingly you can start a well-reputed business, with that.
Unbelievable. Isn't it?
Yes. Only with Rs.500/- and without any knowledge, you can become ‘AMFI Certified Mutual Fund Agent’. All you have to do is fill up a form with couple of photos and give a very simplistic exam (that too objective). The questions asked in this exam are ridiculously simple. Anybody who knows how to read/write English can pass it after going through its preparation book.
So now, you are all set to advise people, where and how to invest their hard earned money. On top of it you’ll receive very attractive commission. And the best part is, no liability or risk will be passed to you. Scary!!! Isn’t it? Doctor, Engineers, CAs almost everybody needs be graduated from relevant stream. But the people from most important stream, ‘financial management’, can advice anybody recklessly without any knowledge of the subject matter.
He will definitely hide from you:
- How expensive is this fund?
- What is the brokerage cost?
- What is the expense ratio?
Try to ask him questions like:
- What is the profile of the fund manager and what’s his track record?
- What is the performance record of the fund?
- Compare that with the equivalent overall market and sector’s performance.
- What are the risks associated with this fund? How are they different from other funds?
- What is the fund size?
- What is the fund’s cash management strategy? (i.e. how much % of funds they hold in cash?)
And if you think he is taking you for ride, switch him off.
Personally, I prefer, to see fund ratings from http://www.valueresearchonline.com/ and then decide where to invest.
So, be careful, the next time you ask for any advice to your mutual fund agent. And till next post, "Happy Investing" with Dilbert :-)
