Advisors can build their niche among young professionals who are earning decently and are willing to take risks.
Chandra, a software engineer earns Rs 22000 per month and saves Rs 4000 a month which he keeps in his saving account. He wanted to invest this money somewhere to earn higher returns but was not sure of to go about it.He doesn’t even know what a financial advisor does! Like Chandra, my flat-mates, who are well-educated and working as software engineers, are also in a similar situation. Terms like mutual funds, equity market, debt instrument etc. are Greek and Latin for them.
One could assume that many young professionals in India earn between Rs 15000-Rs 30000 per month. However, due to lack of financial knowledge, they were not able to channelize their savings properly. Advisors need to target these young professionals who want to invest in financial market but are unable to find the right advice to grow their advisory business.
Here are some aspects which advisors can work on:
Tell them why they should invest – Youngsters are generally not aware about the benefits of financial investments. You need to tell them about significance of investment in one’s life. Try to help them as a true friend in setting their financial goals.
Social media - Today social media is termed as voice of young people. Advisors need to utilize the social media platforms effectively and smartly to catch their attention.
Free online advice - Providing free online advice to the young professionals may increase your reach among the youth. Young professionals are comfortable with internet and mobile. Try to guide them financially through emails and text messages. The mobile applications like whats app, we chat, nimbuzz might help you.
Financial literacy - Instead of blaming the system for lack of financial illiteracy, you should put your own efforts in creating financial awareness among youngsters. Advisors should conduct free seminars, coaching and financial advisory camps to spread financial literacy among them.
Try to help them in achieving their specific goals – While they might not be keen to plan for their retirement when they have just started earning, young professionals are likely to have other financial goals like owning a car, a sports bike or an expensive gadget. Advisors should try to understand these specific goals and help them in achieving it.
Promote the SIP route - It’s better to recommend SIPs for young professionals rather than lump sum as they may not possess a large investible corpus. SIPs can help them inculcate a saving habit. Try to apprise them about power of compounding.
Higher exposure to equity – Normally, the risk appetite of young professionals tends to be higher. Hence, their exposure to equity instruments could be increased in the portfolio which will maximize their returns on investments.
Nilesh S Shah, a Coimbatore based Financial Consultant, feels that creating financial literacy among youth is important to increase the participation of young professionals in financial sector. He said that the advisors could create financial literacy by organizing road shows, group meetings, presentations and other activities. “It is very essential to inform the youth about value of money and significance of investment.”
Vinayak Sapre from Insights Advisor Coaching Firm said that advisors should understand the needs of young professionals. Many young professionals believe in spending money rather than saving or investing it. Advisors should find out their priority first and make them aware about benefits of investments.
He said that the advisors should send emails to the young professionals. However, the email should be easy to understand and must contain some relevant examples. He said that advisors should organize free seminars for young professionals.
