Listen to this article
Over the last two years, the MF industry has added over 45000 new distributors in the individual category. The initial journey for these MFDs can be challenging but understanding some fundamental principles can set them on the path to success.
Here are some of my lessons that I would like to share with all budding MFDs and advisors.
Focus on the "Why"
People don't invest for the sake of investing; they do it to achieve their goals. Don't just tell clients what to do, instead, help them discover their own aspirations that can improve their financial well-being.
Overall, you have to find what do they truly want to achieve with their money?
For example, a client might dream of traveling the world, owning a beach house or ensuring a comfortable retirement. By understanding these desires, you can help them set goals that resonate with them. This connection to their "why" makes financial planning more meaningful and increases their commitment to achieving these goals.
Consider their perspective
Everyone has different life experiences. There's no one-size-fits-all approach. Avoid imposing generic beliefs like young people can take higher risks.
In my view, you should tailor your offerings based on clients’ unique situation. Provide recommendation that suits their unique situation.
Be flexible
Life is unpredictable and investment plans need to be flexible.
For example, a client might lose their job or face an unexpected medical expense. You need to teach them how to deal with such circumstances.
This could include adjusting their budget, re-evaluating their investment options or setting new financial priorities. By preparing them to make these adjustments, you help ensure their financial stability despite life's uncertainties.
Foster long term relationships
Small things like staying in constant touch with clients, celebrating their milestones and be accessible to clients to go a long way to cultivate a strong client relationship.
Also, while it’s crucial to maintain professionalism, don’t forget the human element. Lend them a listening ears and show genuine care during difficult times.
Your clients should know that you're invested in their overall well-being not just their finances.
Offer multiple services
Your clients' financial lives are multifaceted. Build a network of trusted professionals like chartered accountants, lawyers and insurance advisors. This collaboration allows you to offer comprehensive solutions and position yourself as a well-connected MFD, who caters to their holistic financial well-being.
Patience is key
Mutual fund distribution business is a marathon, not a sprint. Cultivate patience and persistence. Building a strong practice and nurturing client relationships takes time and dedication. However, your unwavering commitment will be rewarded with long-term success and a fulfilling career.
By focusing on these principles, you can build strong relationships with clients. Remember, you are not just managing their money; you are helping them navigate the path to achieving their financial dreams.
Bangalore MFD Srikanth Matrubai runs Srikavi Finserve, an AMFI registered MFD firm. He has authored ‘Don’t Retire Rich’. The views expressed in this article are those of the author and do not reflect the views of Cafemutual