D E M O C R A T I Z I N G W E A L T H C R E A T I O N

How to select the Best

Equity Advisor?

W
ith increasing popularity of the equity market over the last

1
decade, everyone is now aware that to make one’s money grow
faster, one needs to invest in the equity asset class. No doubt,
there are some years of pain and bleeding in the equity market,
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but overall, when held for a long period, equity gives the best
return. Period.

However, no individual is 100 per cent sure about the returns as the growth in equity
prices depends on many factors, both at micro and macro levels. The micro factors
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being the fundamentals of the company, stability of management, company’s

financial health, etc. and the macro factors include the economic policies, political
Feb
Sept.,

stability, trade policies and so on.

DSIJ PVT LTD.: Office

Pvt. Ltd. Office no
No211,
- 105, C Wing,
Vascon 1st Floor,
Platinum North
Square, Main
Next to Road, Trade Center,
Hyatt Regency, OppositePune-
Vimannagar, Lane no. 6, Koregaon Park, Pune - 411001
411014
 D E M O C R A T I Z I N G W E A L T H C R E A T I O N
How to select the Best Equity Advisor?
Interestingly, quite a few of us are either new to investment or investing by ourselves or
invest with the help of friends, relatives or advisors. Whichever way you invest, there are
certain questions that pop up in your mind:

If you have been investing

on your own, but always
If you are new to the find yourself on the
investment world, the wrong side of the market
question is - How can I direction, the question is –
benefit from this high I have been continuously
return equity asset class? trying, but not able to
I have no knowledge of gain. What am I doing
this and to me it looks like wrong? How can I correct
a complicated financial my mistakes to build
affair. wealth?
If you have been following
the advice of friends or
advisors, but have been
only losing money, the
question is – Thought all
these people had good
knowledge of equity, but
I just seem to be losing all
my investment. Where do
I find the right advice?

2
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2021

There is one simple answer to these questions: You need to find yourself a trusted,
July2019

proven, time-tested, equity-focused expert as your advisor. An advisor who can guide
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Sept.,

you in your investment journey and build wealth for you.

DSIJ PVT LTD.: Office

Pvt. Ltd. Office no
No211,
- 105, C Wing,
Vascon 1st Floor,
Platinum North
Square, Main
Next to Road, Trade Center,
Hyatt Regency, OppositePune-
Vimannagar, Lane no. 6, Koregaon Park, Pune - 411001
411014
 D E M O C R A T I Z I N G W E A L T H C R E A T I O N
How to select the Best Equity Advisor?
But beware! There are a large number of equity advisors in the country that claim to
provide guidance and service to investors. The question is: How to find the right Equity
Advisor for yourself?

In this article, we will list various qualities you need to look for in your advisor.

We begin by first exposing the fake advisors present in the market.

So, first and foremost, avoid the following ones outright:

Advisors assuring guaranteed returns! : This is a give-away that

the advisor is out to fool you. It’s a well-known fact that no one can
guarantee returns from the market. In fact, SEBI guidelines also do
not allow any advisor to guarantee returns. So, you need to avoid the
advisors who assure you guaranteed returns of X% or entice you
with ‘Earn Daily Rs. Y!!’

Advisors who market themselves under the mask of Big Investors!

Again, do note this is purely a marketing gimmick. Be rest assured
that 99.9 per cent of the time the Big Investors have got nothing to
do with these advisory outfits and, in fact, they may even not know
of their existence.

Advisor without SEBI registration!

SEBI This is a must. Advisors avoiding SEBI registration are well aware that

3
they do not comply with the best advisory practices and therefore
SEBI will not approve them. So, they continue to lure investors without
registration and indulge in malpractices on the sly.
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Advisors who talk about dedicating a research person to advice you!

Do note 95 per cent of the advisories that claim to do this are actually
presenting their ‘sales’ people as the ‘research’ team to guide you.
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These sales people, faking as research professionals, are neither

Feb

qualified nor experienced enough to guide you to manage your hard-

Sept.,

earned money.

DSIJ PVT LTD.: Office

Pvt. Ltd. Office no
No211,
- 105, C Wing,
Vascon 1st Floor,
Platinum North
Square, Main
Next to Road, Trade Center,
Hyatt Regency, OppositePune-
Vimannagar, Lane no. 6, Koregaon Park, Pune - 411001
411014
 D E M O C R A T I Z I N G W E A L T H C R E A T I O N
How to select the Best Equity Advisor?

Advisors who promise they will provide service until you profit!
While this may sound logical, the objective of the advisor is to close
his/her first sale. There is neither any guarantee of returns nor any
definite time limit to capitalise the investment—the customer is just
at the whims and fancies of the advisor. Technically, a customer
continues to remain customer even when the advisor has completely
down-sized research during trying times etc.

Advisors that run the business of Execution (Broking) or Distribution!

These people may provide you *free* research and advice, but this
is always the secondary objective for them. Their main objective is
to maximise their broking or commission income by getting you to
trade or buy a scheme where they earn commission.

Advisors that have not been in this business since the last bear phase!
This typically means since last 10 years. Do note a lot of new entities
spring up during the bull market and lure investors. However, these are
the first to disappear and abandon servicing their customers when
the market becomes bearish. As Warren Buffett has observed, “It’s
only when the tide goes out that you find out who’s been swimming
naked.”

Avoid following advisors that work on automated direction indicators!

4 These advisors use certain calculations on data to come up with a
conclusion on what should be bought or sold. These auto or robo
advisories are very error prone as 1) Any error in input data will
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lead to disastrous results 2) Data is not able to capture the current

sentiments and emotions of the market 3) Data misses on the human
experience of reading through various situations, including body
language of the management, etc.
Feb
Sept., 2021
July2019

DSIJ PVT LTD.: Office

Pvt. Ltd. Office no
No211,
- 105, C Wing,
Vascon 1st Floor,
Platinum North
Square, Main
Next to Road, Trade Center,
Hyatt Regency, OppositePune-
Vimannagar, Lane no. 6, Koregaon Park, Pune - 411001
411014
 D E M O C R A T I Z I N G W E A L T H C R E A T I O N
How to select the Best Equity Advisor?

Do not fall for claims of very impressive returns on websites or by

a representative of the advisor.
Most of the times, the performances shown by the advisors are
sugar-coated, i.e. they will show you the good performances only. In
digital age, the poor performance can be altered/deleted.

Advisors presented on national television, radio, forums etc.

Just because an advisor appears on television or radio does not
imply that the advisor is an expert. It will be surprising to know
that some advisors just employ people on their rolls whose job is
to simply represent them on TV so that investors believe that their
brand or advisory is very aspirational.

These fake advisors in the markets can ruin your investment journey due to your lack
of awareness and greed to earn more money. So, always take a decision based on
facts and not on what people show you. It is important to select an advisor who can
help you achieve your investment objectives.

Now that we have discussed whom to avoid, we must list down the attributes that
can help us identify the genuine stock advisor for you.

The Three Key Attributes That One Should Be Looking For Are :

Someone who will act in your best interest – Does the advisor
understand and empathize with you on how difficult it has

5
been for you to put together the capital for investment? Will
the person act as carefully and thoughtfully with your funds
Trust as he would with his own? Will you be able to communicate
with him at least by email when you have concerns or want to
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bounce off some ideas on your investment? Has this advisor

been in the system from yesteryears (at least 20 years) so that
he has the maturity and experience of tiding over various ups
and downs? Does this advisor have good reputation, market acceptability and brand
equity in the investment community? Will this advisor be there for you when you
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need him the most (i.e. during market downfalls)?

Feb
Sept.,

DSIJ PVT LTD.: Office

Pvt. Ltd. Office no
No211,
- 105, C Wing,
Vascon 1st Floor,
Platinum North
Square, Main
Next to Road, Trade Center,
Hyatt Regency, OppositePune-
Vimannagar, Lane no. 6, Koregaon Park, Pune - 411001
411014
 2021
July 2021
Feb

DSIJ Pvt. Ltd. : Office no 211, Vascon Platinum Square, Next to Hyatt Regency, Vimannagar, Pune- 411014