The words “NEW OFFER” do not excite investors anymore, says Jigar Parekh, Zonal Head - Alternate Channels, Prudent CAS. IFAs would do well by changing their focus from products to clients.
Gone are the days when you met clients with a new product, often the flavour of the season and get business done. The investor is no more interested in accumulating the piles of paper in the name of every new product suggested by IFA. In fact, the investor is flooded information through various media like television, internet, print media etc. Thanks to Google, information about any product is just a click away for any investor today.
With the changing times, the IFA also needs to change his approach in dealing with investors.
Here are a few tips that the IFA can use in adopting a “client centric” rather than a “product centric” approach.
Talk about client needs, not products:
While talking to your client, spend less time talking about products. IFA should spend more time in actually explaining the client about importance of financial planning before buying any product. Once the client is convinced that he requires the specific asset class to achieve his/her financial goals, the product would automatically be sold.
Classic example I would like to share here is that of BABA RAMDEV. He talks about the benefit of yoga and ayurvedic treatment for various health related problems. I have rarely seen him talking about the specific ayurveda products they manufacture. Even if he talks about the products, he makes it a point to say that it is not mandatory to use his products only; the important thing is to take the ayurvedic medicine and do yoga. Without talking about the products and just talking about the benefit of Yoga today, he has created a big business empire worth through selling VCDs, DVDs, ayurvedic products etc.
If an IFA is successful in explaining logic of why his client needs specific amount of insurance, MF or fixed income products in his/her portfolio, the business would automatically follow.
Keep the language simple:
Most of us confuse the words ‘good communication’ with fluent English and usage of jargon. The best communication is the one which is easy to understand by the client. Unless it is absolutely necessary, avoid jargon. I have seen IFAs with a very good command over English and product knowledge who have failed in this business. On the other hand I have also seen a number of cases where the IFA is not fluent in English and has a moderate level of knowledge but because he/she speaks the client’s language they have been successful in amassing big AUMs in a relatively short span of time.
Be a sport:
A common situation faced by IFAs is where the client is educated by an IFA about the benefit of a product and the client goes on to buy the product – but from some other distributor. In such a situation IFA must be gracious enough not to react in a negative manner. An IFA known to me gracefully congratulated the client for taking a very good decision of adding that product in his/her basket because it was very much required as per client’s financial plan. With this sporting gesture, the IFA established his image of being “client centric” and in turn won the loyalty of that client thereafter.
