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Even PAD may not be the best solution for large number of people due to investment of only returns of Accrual funds into equity being insufficient to meet their goals.
We use, what I may call, Option 4 - Constant Engagement Model, borne out with experience. Most of investors initially do not have exposure to Mutual Funds and are sceptical about it. Hence, initially we go by the Risk Profile may be with 100% debt allocation. However, in our 4-monthly reviews, we start recommending equity after One year. By that time they become comfortable with MFs and become open to equity suggestions too. Starting with Hybrid - Debt MFs, we slowly introduce them to Hybrid - Equity MFs. When they see the returns and find that these funds are fairly safe, they themselves mould their thinking to accommodate the idea of some equity MFs in the portfolio.
Sometimes, after 3-4 years, things even come to such a pass that we have to tell them not to insist on any more equity in their portfolio!
Great article to share
Great Article!! I am using this strategy since last 5 years now for all my retired clients. This strategy has given extremely good results. Also, in the process, my clients have understood the importance of Equity allocation in their portfolio.
The article has very nicely explained all the options in detail, very easy to give the printout of this article to client.