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Many investors moving into balanced fund are those moving fixed deposits. So when fixed deposits don't give monthly income, ask if the investor needs that monthly dividend.
Explain what a balanced fund is, the composition of equity, debt and the risks. If the risk profile does not match, suggest other fund options with lesser risk and equity allocation.
Investors are confused thinking that dividend is perpetual and don't realize that it may stop if market comes down. Explain that investing in such funds requires a horizon of 5-7 years.
Documentation is key to managing expectations and it will help when clients say that they weren't informed of the risks when market goes south.
Showing them rolling return is very useful in educating clients that there will be dips. Help clients understand that dividend does not equal total return.
