Umesh Aggarwal, Certified Financial Planner, believes that IFAs can succeed in these circumstances by upgrading themselves and shares a few thoughts on how they should go about it
The last 4 years have been very eventful for IFAs.
2007 was a year characterized by high energy and high earning for IFAs as there were a number of NFOs for them to sell. The ‘high’ created by this success made us all believe that the party was never going to end. Everybody, be it mutual fund agents or Insurance agents, was riding piggyback on the markets.
In 2008, the first jolt came from the market from which to date we have not recovered. Dealing with anxious clients and fall in business followed.
As if this was not bad enough, SEBI came out with the regulation in Aug’09 which turned the tables on the mutual fund agents. This process has now gained further momentum - both for mutual funds and insurance.
As 2011 is about to be history in a couple of months, IFA s must make sure that they must not become history themselves. I am forced by the industry trend over the past 4 years to say this.
The last 4 years hold a lot of lessons for us all but unfortunately, most IFAs have not been able to decode the signals sent by the circumstances.
In these circumstances, the efforts put by the IFAs have been understandably to keep their AUMs stable and to keep their trail incomes intact. But in the process of doing so, they have ignored one very important task of upgrading themselves.
I would like to quote an example here. Recently one of my clients asked me a casual question - why problems happen in life. My answer to this was as one graduates from a lower class to the upper standard, studies get tougher. But the end result is that we accomplish more - a higher qualification each time. This principle from the academic world holds true for life also.
It is very much clear that the abolition of entry load is here to stay. It must be adapted as such in our business lives. It is not that if there shall be no commissions, there shall be no business. I shall try to pen here few things, which might be helpful to my fellow IFAs.
Positive Attitude
Be positive and make sure to bear in mind that nothing has been lost, if the entry load has gone. A lot of potential is lying untapped in the market. Be the first to grab it. Make your vision broader to see that nobody is coming up to grab the opportunity lying. You will have to spot the the same.
Skill Development
It has become imperative that various skills, such as communication, listening etc. should be developed in you, so that your client sees you as a well wisher and not a product pusher.
The art of saying ‘NO’
Also develop the art of saying ‘NO’ to the client where necessary. You do not have to agree always with him as the client may not be as well versed with things as you are. Your yes to a wrong thing, will authenticate that and bring the onus on you when the results go wrong. Bear in your mind that your ‘NO’ will not finish the client for you; rather you will be more respected more when the results turn out to be more beneficial to the client.
Transition from Agent to Advisor
No physical certificate, in this world, can declare you Advisor. It is your mindset that can make you one. Think that I am an advisor and not agent. It is only the advisor who is trusted and not the agent, be it any field of business. Create your image of being an advisor and not an agent. Educate your clients so that they could take you as an advisor instead of an agent. ‘Do good things for your clients and make sure that they know about it’, should be one of your guiding principles.
Learn and Earn
Adapt yourself to a continuous learning process. Cultivate a habit of surfing internet, reading books, etc. Read the notes by the experienced people in the sphere. Upgrade yourself to best of knowledge in the field such as CFPCM programme, CPFA etc. A thorough knowledge can lead the way for you.
Trust
Client distrust is painful to IFAs. So it is imperative that you develop a strong bond of trust with your clients and then proceed further for any detailed action. A doctor is always consulted for the ailment and a chemist for the procurement of the remedial medicine suggested by the doctor. A doctor is always a trusted entity in comparison to the medicine vendor.
All of the above have proven useful and practical for all those who have practiced these. Practice these and all your fears shall be eradicated and a new energy will flow through you as the same is an essential driving force for your financial future and security.
Umesh can be contacted at Umesh.cfp@gmail.com, financialacademia@gmail.com
