As a financial planner, you guide and correct investors when they commit financial mistakes. But what happens when you make mistakes which can have an adverse effect on clients’ finances?
In this series, we ask advisors to share their biggest mistakes and the lessons that have been learned which have helped them strengthen their practice.
Srikanth Matrubai, Srikavi Wealth Advisors
One of the biggest mistakes which I made was taking markets for granted which eventually affected my relationship with the clients . Before 2008, I only recommended investing in equities. I did not follow basic financial planning rules and never did asset allocation for my clients. In fact, I invested all my personal money in equities! The 2008 market crash came as a jolt. I realized that 100% allocation to equities is like committing a sin. Around Rs. 7-8 crore of my client wealth was invested in equities and I failed as an advisor.
But this mistake taught me a very valuable lesson and I started practising financial planning. I learned that asset allocation is extremely important to meet your future goals. I learned that even if you understood the markets well, it is always uncertain.
I made another mistake in 2011 when Indian markets crashed and none of my recommended funds were performing well. During that phase, international markets were doing well but my clients had zero exposure to foreign equities. This was another instance where my lack of knowledge affected my business. Now, I make sure that my clients have a well-diversified portfolio.
These two mistakes made me realize that continuous learning is essential to succeed in this profession.
Dilshad Billimoria, Dilzer Consultants
In the initial days, we wanted our business to grow. So our primary focus was on acquiring new clients. But later on clients started taking us for granted and our casual approach made them think that we solely focus on selling products. What I learned from this episode was that we need to define the company’s vision and philosophy right from the beginning to avoid doing any compromise with clients. Now, besides focusing on adding new clients, we make sure that we deliver the same level of service to each of our client by constantly engaging with them. Now, my clients value our services.
