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17 January 2019 Arthasarthi

Why People don’t like to pay any fee to financial advisor

Paying for financial advisory - HUH, So Uncool !!!!

On a lighter note, Arthasarathi explores some of the reasons why it’s so uncool to pay fees for financial planning advisory services.

Would you like to pay a fee for just creating a financial plan for yourself?

If answer to this question is NO & you are an Indian, you are just following a common behaviour that prevails across the world.

But the reasons for this could be different for Indians than the rest of the world. On a lighter note (no offenses to anyone) they emerge out of our deep-rooted beliefs as evident by examples below

Don’t we all love the “free” wala culture? Let’s ask you about the best Dosa Joint or the famous Bar / Pub which you love? Are these not the places which offer Free unlimited chutney and sambar with dosa or “snacks (Chakhna as it’s called fondly) with liquor? Let these joints start charging you a “fee” for all these freebies & see they drop on popularity charts.

By the way, who pays for things that are available abundantly and for free? Advice is always free for us: Your car is stuck in narrow by-lane in a city or You have accidently boarded a wrong train or even if its Sachin Tendulkar, you get free advice from “well-wishers”. All of them believe that they can solve your problems. The same is true for financial services, where so much knowledge is available. Why pay for it ? Isn’t it better to seek advice absolutely free?

Let’s accept that we love to copy & buy it cheap: Isn’t it boring to pay premium for the original Italian furniture designer say, a Cedes Milano or a Marioni rather than checking out their designs and get it done cheap from our local carpenter? Well, it’s innovative & exciting. Albeit, it has that little risk of not getting the exact output, yet, isn’t it a tempting offer? Similar, is the case for financial services. Who pays for pure advice anyways?

Well, even our service providers do not mind free advice rather than charging fees: Advisory fee is usually a supplementary income for many e.g. hospitals make good money in diagnostics rather than treatment, banks make good money on third party products and schools get paid well for cultural fests. Why rub the customers the wrong way by asking for “Fees for advice” when you can make more the other way.

Why then, should we pay for financial advice, which anyways is available for free? There are millions of agents who offer this, even though they earn much more through commission. But being a freebie enthusiast, we end up happy as customers as visibly we have not paid anything extra.

While you may smile and tell yourselves “Hey, I am different & don’t mind paying for right advice”. But, whom should I pay on what basis? Where are the reliable financial planners whose advice you can trust?

Well – there are many. Here is a range of verified and customer reviewed financial planners for you. So don’t get lured by “Free Advice” but pay “the right fee to right adviser” and get your financial planning done.

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