What is Clarified? How is it different from other online financial advisors?
Clarified is a fee-only financial planning service. We are NOT a distributor of mutual funds or of any other financial product. As such, our advice is completely transparent, and free from all conflicts of interest. Our mission is to make high-quality financial planning available to everyone at an affordable price point. We are registered with the Securities and Exchange Board of India (SEBI) as an Investment Advisor with the registration number INA100010493.
Who is a SEBI Registered investment Advisor?
As per the SEBI (Investment Advisers) Regulations, 2013, which came into effect on April 21, 2013, no person or entity can act as an investment advisor without obtaining a certificate of registration from SEBI.
These regulations specify educational and professional qualifications, capital adequacy requirements, risk profiling and suitability standards, and the code of conduct, to make sure that the advice is high-quality and in the best interest of the customer.
What is a fee-only financial planner? Is it the same as a fee-based financial planner?
A fee-only, or a 'no-commission' financial planner is someone who can only receive compensation directly from the customer. A fee-only financial planner cannot receive commissions or any other remuneration through the sale of financial products. Fee-only financial planners operate as fiduciaries, that is, they are supposed to give advice keeping their customers' interest as paramount.
It is also important to note that fee-only financial planning is different from fee-based financial planning. In the latter, the planner can accept commissions in addition to the fee paid by the customer.
Other online portals provide free advice. Why should I pay the fee?
Clarified offers comprehensive goal-based financial planning, which covers a range of investment options from mutual funds to small savings schemes (PPF, NPS, etc.), health and life insurance recommendations, and a 1-on-1 consultation. None of the ‘free’ portals offer a similar depth of services, and many are in fact mutual fund distributors with hidden commissions.
Financial Planning Process
How will I receive the financial plan?
You will receive the financial plan as a PDF document via email within 3-5 working days of sharing all the relevant inputs. In case any change is required to be made after the 1-on-1 consultation, you will receive a revised PDF document within 2 working days of confirming the changes.
Does Clarified provide 1-on-1 consultation with a financial planner?
Yes, you get a 1-on-1 telephonic consultation with a qualified financial planner. This consultation covers key features of your financial plan, rationale behind fund selection, roadmap for implementation of the plan, and tips to help you follow the investment schedule. We are also happy to answer any other question you may have regarding the financial plan.
What happens if my requirements or financial goals change afterwards?
If your goals or financial requirements change within 91 days from the delivery of your financial plan, we'd be happy to update your financial plan accordingly. You could avail of this benefit once, and a revision does not imply an automatic extension of the 91 day period.
If you need your financial plan reviewed or updated more than 91 days from the delivery of your original plan, you could avail of a follow-on consultation at a 30% discount on the list price of the original consultation.
How long does the financial planning process take?
From the day we receive all the relevant information, we take about 3-5 working days to ready your financial plan. Our working days are from Monday to Friday, excluding public holidays.
Beyond these three days, the duration of the financial planning process depends on how soon you could share the requested details with us, and on when you prefer to schedule the 1-on-1 consultation.
What does the financial plan NOT include?
Our financial plans do not include the following:
Stock tips or buy / sell recommendations in any form for direct equities. However, in certain cases we may recommend that you reduce your asset allocation in direct equities in favour of a more suitable asset class.
Does Clarified help with implementing the financial plan?
Yes, we help you set up your mutual fund investments in commission-free direct plans via the Mutual Fund Utility, a secure and zero-fee online platform created by the mutual fund industry itself. We guide you through the process of creating a Common Account Number (CAN), activating online access, registering bank mandate, and setting up the initial investments.
Which investment products do the financial plans cover?
Mutual funds form the core of the investment portfolios we recommend to our customers. Mutual funds offer a low-cost way of creating risk-return optimised, low-involvement, well diversified portfolios suitable for financial goals of all durations. At Clarified, we carefully select from a range of equity and debt mutual funds to create a fully customised investment portfolio for each customer. We also include recommendations on Public Provident Fund (PPF), National Pension Scheme (NPS), and other small savings schemes which may be suitable for you.
Our financial plans do not cover real estate, cryptocurrency, stock tips, or buy / sell recommendations in any form for direct equities. However, in certain cases we may recommend that you reduce your asset allocation in real estate, cryptocurrency, direct equities, and other unsuitable investments in favour of more suitable options.
How does Clarified select mutual funds?
At Clarified, we follow a well laid out methodology for selecting the most suitable mutual funds for you. You could read about it in detail in our blog post here.
What are Direct Plans of mutual funds?
What happens if my mutual fund portfolio suffers a loss?
Mutual fund investments are subject to market risks, and the mutual funds in your portfolio will inevitably go up and down in value - equity schemes more than debt schemes. However, in the long term, you are more likely than not to experience decent returns, and see a steady increase in the value of your corpus.
Does Clarified guarantee the performance of its mutual fund recommendations?
Mutual fund investments are subject to market risks, and as such, we do not guarantee the performance of the funds we recommend. We do, however, believe that if you invest consistently on a fixed schedule, and stay invested for the long run, you are highly likely to earn reasonable returns on your investments.
I am a risk averse person. How will that impact my investment plan?
Before making any recommendation, we conduct a comprehensive evaluation of your risk appetite. We consider not just your financial capacity to withstand short term losses in your portfolio, but also your emotional capacity to weather portfolio volatility. As a result, a risk averse customer will be recommended a somewhat conservative investment portfolio.
While investing in mutual funds you could either opt for direct plans or regular plans. Direct plans do not charge you expenses paid to the mutual fund distributor, as they are bought without the involvement of an intermediary . The commission-free direct plans charge a significantly lower expense ratio as compared to the the alternative, regular plans, which include as much as 1% in distributor commissions. Accordingly, direct plans offer better returns as compared to regular plans.
Mutual Fund Utility
What is the Mutual Fund Utility? How is it useful to me?
The Mutual Fund Utility (MFU) is a secure and zero-fee online platform created by the mutual fund industry itself. On the MFU you could create a Common Account Number (CAN) and use it to transact in multiple schemes of various participating Mutual Funds. The MFU offers the convenience of a single transaction and consolidated payment for simultaneous investments in multiple schemes. The MFU platform also supports transactions like Systematic Investment Plans (SIP), Systematic Transfer Plans (STP), and Systematic Withdrawal Plans (SWP).
At Clarified, we guide our customers through the process of creating a Common Account Number (CAN), activating online access, registering bank mandate, and setting up the initial investments on the MFU.
Does Clarified get any commissions from the Mutual Fund Utility?
No. We do not get any commission either from the Mutual Fund Utility, or the mutual funds. The only source of revenue for us is the fee paid by the customer.
Does the Mutual Fund Utility allow me to access my investments online?
Yes, it does. You could access and redeem your existing investments, make new purchases, and even set up transactions like Systematic Investment Plans (SIP), Systematic Transfer Plans (STP), and Systematic Withdrawal Plans (SWP) online.
Why do you recommend the Mutual Fund Utility?
We recommend the Mutual Fund Utility mostly for the following three reasons:
Mutual Fund Utility gives free access to commission-free direct plans of mutual funds from most of the leading Asset Management Companies in India.
Mutual Fund Utility is a single point of transaction covering almost all the mutual funds in India. It saves you the effort of transacting on the websites of individual mutual funds, which can be cumbersome at the best of times.
Creating mutual fund transactions is efficient on the Mutual Fund Utility, as you can combine multiple mutual fund schemes into a single transaction and payment.
Almost all other platforms are either paid, lack the coverage of Mutual Fund Utility, or let you transact only in regular plans that take as much as 1% of your corpus as commission every year.
How soon can I begin transacting through the Mutual Fund Utility?
Once the Common Account Number (CAN) registration form has been submitted with all the required documents, CAN allotment happens in 2-3 working days. Once the CAN is allotted, you could set up online account access and start transacting. However, please note that you need to register a bank mandate to be able to start SIPs, which takes another 10-20 days after request submission.