Choose fixed-fee RIAs to avoid high costs, improve value for money

One reason why the fee can't be lower than 3 per cent is that it is difficult for an RIA to do a good job and remain viable even at this level

Only around three dozen Securities and Exchange Board of India (Sebi)-registered investment advisors (RIAs), i.e. financial planners, charge a fixed fee.  

The rest charge a percentage of the assets under advice (AUA). 

Depending on an RIA’s experience, academic qualifications, and the number of hours of effort put in (by a fixed-fee RIA), the highest-fee RIA in India can charge 10 times the lowest-fee RIA.   

An important decision a client must make is the appropriate level of fee they should pay an RIA. 

In my view, the appropriate amount a client should spend on average annual fees over the first five