A strong foundation is the key to any successful business. Your vision, your commitment, your purpose – all form the basis for an organization. They are the all-important pillars, the most essential part of any building.
In his groundbreaking Arthashastra, Chanakya a.k.a. Kautilya (C. 350- 280 BCE) lists seven key constituents of a state namely the king, the minister, the country, the fortified city, the treasury, the army and the ally.
Decoding Chanakya’s writing we understand that the seven constituents are equally relevant for financial advisory business. Let us have a look at each of them.
- King (financial advisor/ leader): The leader is the visionary, the captain, the man who guides the organization. In personal finance, financial advisor play a role of leader. He acts as a guide for all his clients. A financial advisor helps clients plan for their short term and long term financial goals including buying a home, foreign trip, children’s education and planning for their retirement. He also provides investment, tax and insurance planning.
- Minister (manager): The manager is the second in command in a financial advisor’s office. He is the point of contact for clients in the absence of the leader (financial advisor). Having a strong financial advisor and manager team allows for superior client service.
- Country (advisor’s market): In geographical terms, it is the area from which an advisor gets majority of his revenue. In terms of market segmentation, it refers to your expertise in managing a particular category of clients. Having a clearly defined ‘market’ (expertise) helps you attract similar clients more.
- Fortified city (advisor’s office): Just as a king needs a control tower - a place from where all plans and strategies are made, advisors too need a designated place for completing administrative work, conducting client meeting, and brainstorming with team members. This place is the advisor’s office.
- Treasury (revenue / commission): A strong and well-managed treasury or commission structure is the heart of financial advisor’s business. Most financial products offer upfront commissions which benefit the advisors at the time of selling i.e. the present. While present is important, advisors must also focus on sustained future earnings in order to grow.
- Army (advisor’s team): A king needs a well-equipped and trained army who can protect the kingdom during war. In financial advisory, the advisor’s team members play the role of the army. They work hard to generate business and meet client expectations.
- Ally (friend): Advisors should have friends in the industry, someone they can count on for advice and support. Being part of the industry the friend would be able to understand the issues faced by the advisor and provide solutions that are more effective.
While building these seven essential pillars, do not forget to imbibe that vital ingredient called values, speaking about which in his book ‘Build to last’ Jim Collins has said ,” Values are the roots from where an organization continuously gets its supply as well as grounding – build on them!”.
Nilesh Soman is a trainer from Pune. He runs financial learning academy Gurukul Institute of Capital Market.
The views expressed in this article are solely of the author and do not necessarily reflect the views of Cafemutual.
