These days you get calls regarding various financial products available in the market every now and then and if you answer one of the calls for more than a minute, chances are that next day visit of the agent makes you buy that product. One of the best ways to know if the person selling you a financial product or service is honest and skilled enough is to check what all is he asking before telling you where to invest and why. Here are some key questions across four financial products that brokers should be asking you

1. What is your age, income and monthly household I expenses?
The basic question defines how much insurance you can afford and need.
2. Does your spouse work and he/she have insurance?
This is to assess whether he/she also needs insurance cover or not.
3. What are your financial liabilities?
A crucial question, because it defines the level of insurance cover you need.
4. Do you own the house your family lives in?  How much insurance cover do you already have?
This is to avoid getting over-insured. If you own the house, you may need a smaller cover. The right size covers equal to the amount you get after deducting existing cover from the required amount. If you have huge assets and savings, your insurance need goes down.
5. How much risk are you comfortable with?
This decides what kind of fund would suit your risk profile.
6. What is the tenure of your investment?
It defines the asset class in which you invest-debt, equity or balanced.
7. Is this your first fund investment? Do you understand how they work? Do you need to make tax investments under 3 Section 80C?
First-time investors should keep it simple and stay clear of complex funds.
8.  How often do you buy and sell stocks?
To find out how much you can afford to invest per month.
9. Are you aware of the tax implications of short-term t capital gains from stock trading? Can you monitor your investments on your own?
This is to know your ability to take risks and your knowledge of equity markets.
10. Do you understand how credit cards work and their fee structure?
This is to know if you are familiar with credit card basics.
11. Are you a compulsive spender? Do you find it difficult to repay debts?
To ascertain whether a credit card will help you or add to your troubles.

If he explains the benefits from your mutual fund and Ulip investments and gauge your mentality is that of an investor or a trader and takes interest in knowing how much time you can afford to track your investments, you know that you have the right person but you are not in safe hands if the agent is doing the following:
1. Ignoring inflation when projecting returns from long-term products.
2. Not explaining features or limitations of a product.
3. Pushing something which is not required.
4. Painting an optimistic picture without spelling out the risks.
5. Selling in a way that it hurts investor’s interests.

INSTRUMENTS & RISKS
Traditional life policies, low-yield FDs, bonds have low to moderate risks.
General and medical insurance, credit cards have moderate risks.
Money-back, endowment and pension plans have moderate to high risks.
Ulips, mutual funds, equity shares have high risks.
Mutual funds, shares, derivatives fall in very high risks category.