Sales practices followed by mutual funds sales managers are directed at making fund managers out of financial advisors. Fund sales people talk about the top ten holdings, sector weights, stock stories and other such metrics. But these features of a fund are the responsibility of the fund manager. It is precisely because an investor does not want to be responsible for these, that he hires a fund manager. The fund manager sets up a diversified portfolio largely eliminating the issue specific risk. The market risk however remains. It is the job of the financial advisor to handle this risk of the  entire market falling. It is this risk which leads to the NAV of a fund falling significantly.

Whether the advisor handles this by suggesting a long term investment horizon,  regular investing, or a combination of these, it is this skill which has to be honed and perfected. So focus on your role! Don’t become a fund manager!

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