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Business Development Myths in the financial advisory universe

Myths in the financial advisory universe

A whitepaper published by Financial Planning Association titled “The Next Wave of Financial Planning” tells advisors not to get swayed by these myths.
Padmaja Choudhury Jun 17, 2017

“Myths are public dreams, dreams are private myths,” said Joseph Campbell, an American mythologist.  Myths are prevalent everywhere and they may hinder the potential of an individual.

To bring in rationality and logic myths should be dispelled. The financial advisory is no exception to this phenomenon.   

A whitepaper published by Financial Planning Association titled “The Next Wave of Financial Planning” points out three myths. We try to figure out the depth of the myths in the current scenario and ways to steer clear of them.

Myth 1: My 55+ clients aren’t interested in technology

Understanding how your client base interacts with technology and how they want to interact with you is essential.

Many investors above 55 years of age have been increasingly using technology and use social media to communicate with their advisors, found the whitepaper. In fact, such investors now prefer meeting their advisors through video conferencing.

Mumbai-based Vinod Jain of Jain Investments has a similar experience with his clients. “Most of my old clients have started using technology to communicate and transact in mutual funds,” says Jain.

Myth 2: Young investors do not have any money.

It is a common myth that young people do not earn enough money and hence are not able to save and invest. However, it is far from the truth. More millennials are engaging themselves in start-ups and new businesses which have led to richer young Indians. The financial burden of the young people is also less as they are not expected to chip in money for household needs at least for some years. These have led to higher disposable income.

 “Young people have been investing in financial products because of underperformance of physical assets such as gold and real estate. In fact, a few of my young clients who stay with their parents invest nearly 75% of their salary every month,” says Mumbai-based Amol Joshi of PlanRupee.       

Myth 3: Everybody knows that the next generation fires the parents’ advisor once they inherit their wealth.

That may have been true in the past, but it is not the case now. Financial advisors who proactively engage the family including the spouse and children of their clients are better able to meet their needs and retain valuable assets, says the white paper.

“We start building a connection with the client’s children from the age of 15. It helps us to adjust to their mindset. When they turn adults, we start engaging them with financial products. This helps in acquiring the second generation of clients,” says Ranchi-based Pradeep Jain of PMPK Wealth Advisors.

He further adds that having a young relationship manager also helps in this process.

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