Apart from guiding clients on investments, advisors perform a number of tasks which are often unnoticed by investors.
Clients don’t get a chance to see the actual work that goes into managing a portfolio. Sometimes, the work done by advisors is very opaque for investors to grasp. Consider this: what if client sees a portfolio with relatively low return? Do they know why their portfolio is underperforming? Unless they fully understand the dynamics of how investments works, your effort will be of little importance to them.
Thus, it is imperative that advisors clearly demonstrate what value they add by communicating with them effectively.
We spoke to a few IFAs to understand how they make sure their clients are well aware of their job.
Hemant Rustagi, CEO, WiseInvest Advisors
Hemant mentioned about four things which are absolutely necessary while dealing with clients:
- Communication:
He always makes sure that his team conveys to clients what is happening across the world and in our economy and how does that affect their portfolios. “Clients read about various developments in news but at times they miss to connect the dots. Our job is to ensure they are able to connect the dots so they understand how it affects them.”
- Translate into numbers:
Numbers are very important for clients. “Whatever we do we need to always remember to translate our work into numbers.” For example, a performance sheet should be prepared before meeting a client. This sheet should have bifurcation of assets, portfolio performance till date, etc.
- Record client meetings:
Hemant asks his team to record all client meetings. “It is necessary to remind clients and remember our own conversation with clients. This helps avoids any misunderstandings in future," says Hemant.
- Always be honest
It may sound clichéd but honesty is the first and foremost policy for Hemant. He believes that even if they make a mistake they should tell the client, as he believes a client understand that things can go wrong.
Vinod Jain, MD, Jain Investments
Vinod’s policy is simple - wait patiently for the client to trust and understand his effort. He doesn’t believe in going out of his way to prove the client how they have added value.
“We believe that clients are very intelligent after all they have earned the money and all that we are doing is managing it. So we wait patiently for the client to feel comfortable with us because we know once he/she trust us, he/she wouldn’t want to leave us.”
“As we trust doctors we are intelligent enough to respect their diagnoses and medication. Similarly, clients are intelligent to trust us and are capable of understanding what we are doing.”
Suresh Sadagopan, Founder, Ladder7 Financial Advisories
Suresh Sadagopan believes in collaborative planning with clients. Suresh follows a structured approach - right from onboarding to executing the plan. To begin with, he gathers data and then formulates a plan. The plan is shown to clients and their inputs are weaved into the plan. Then they move on to discussing cash flows and asset allocation. “If the client and we are not on the same page then it would never work.”
He believes in keeping regular touch is necessary. He holds regular meetings with clients on a quarterly and half yearly basis to review the plan with clients.
How do you communicate what you offer to clients? Let us know.
