About 270 years back, in the early 1750s, Jonas Hanway first used umbrella in London and became the enemy no. 1 of the cab drivers!
Hansom cabs (two-wheeled horse-drawn carriages, somewhat like Indian tongas) and sedan chairs were the primary modes of transportation in England at that time. Business boomed, especially during rainy days, as both hansom cabs and sedan chairs came equipped with small canopies that kept passengers dry. When it rained, Londoners flocked to these coaches.
So the cab drivers perceived Hanway’s umbrella as a threat to their business. Many hansom cab drivers and sedan chair carriers grew violent towards Hanway. According to the British history magazine Look and Learn, when they saw him walking by, they often "pelted him with rubbish." On one occasion, a hansom cab driver even tried to run Hanway over with his coach. Hanway reacted by using his umbrella to "give the man a good thrashing."
Ultimately, over a period of time, people started using umbrella not only during rains but also for shielding themselves from sunshine.
Somehow, cab drivers were able to overcome this ‘umbrella threat’ but threats continued to haunt them in the form of local public buses, trains, auto rickshaws, even personal cars that were bought by rich and later by the middle class. Not only are these mode of transport convenient but also cheaper for the public.
But cabs continue to be a part of our daily lives and in fact their business is thriving. (Though of course, now instead of horses, modern day cabs run on petrol/diesel!). Interestingly, many people prefer using Ola/Uber rather than a public transport or even their own personal car.
The reason why cab hailing services are thriving is because they offer two unique propositions - convenience (no parking hassles) and service (last mile connectivity, especially when compared to public transport). The cabs kept upgrading their services regularly and are now available with a click of a button.
If I connect this to our industry, it is nothing but service & convenience which has made the cabs survive in spite of such intense competition and decreasing revenue.
Looking back, it is not only the umbrella, the railways, the metros and even the rickshaws posed a much bigger threat to cabs but they are still alive and kicking. In fact, Nandan Nilekani had recently said in an interview that a techie is better off becoming an Ola/Uber cab driver as he would be earning much more!
So, ultimately what matters is value or simply put usefulness.
If I relate the condition of the cab drivers to IFAs, the situation is more or less similar.
IFAs earlier faced erosion of revenue when entry load was banned. Now, they are facing competition from direct plans, online platforms and are staring at a possible reduction in revenue which could arise if TER comes down and the disclosure of commission is implemented from October.
But many IFAs brush aside these distractions and focus on expanding their business. Following their example, we too as IFAs need to constantly stay updated with technology and give service to investors which leaves them asking for more. We must WOW our clients with our advice and service.
Have a website, even a App if possible. Give personalized guidance every now and then. Have an attitude of client first.
To reiterate, instead of its higher cost, people still prefer to use them rather than a rickshaw or a metro simply because of personalized service and last mile connectivity which a metro, obviously can’t offer.
Similarly, we can also become their preferred mode of routing investments if we give them personalized service and good quality advise. It is imperative that IFAs need to understand that investors ultimately look at convenience and service and cost becomes secondary.
The views expressed in this article are solely of the author and do not necessarily reflect the views of Cafemutual.
