Often, investors expect more than returns - prudent handholding, counselling, doing a financial health check-up, help in identifying financial goals and asset allocation and doing all this and more with ethics and transparency, which is the cornerstone of the financial advisory practice. The client should find a value proposition so that he would look up to their financial advisor as a financial doctor.
So financial advisors, kick-off the new year 2020 doing these 5 things right and watch your investment advisory business grow:
1. Help clients set their financial resolutions
Encourage investors to revisit their financial goals and draw a financial plan. Ideally, this should be done by conducting a need-based analysis, wherein one considers the investment objectives of an investor, risk profile, liquidity needs amongst many other facets. In this entire exercise, the following is necessary:
Do a financial health check-up for investors and charting out a course corrective action, if need be, in order to safeguard the long-term financial wellbeing of the investor
With utmost care counsel the clients to set Specific + Measurable + Adjustable + Realistic + Time-based = S.M.A.R.T goals and classify them into short-term, medium-term, and long-term
Construct a personalised asset allocation strategy based on the risk profile, investment objective, and time-to-goal and back it with solid rationale and research
Recommend schemes after assessing qualitative and quantitative parameters with due care and astute research
Encourage investors to start or continue with SIPs, so they can achieve their envisioned financial goals
2. Meticulously review their investment (mutual fund) portfolio
To ensure that client is on the right track in the journey of wealth creation and accomplishing financial goals; proactively and meticulously do portfolio reviews. And in case of queries, resolve them patiently and on time.
If client gets anxious due to underperformance of their portfolio over a short term and wants to take ad-hoc investment decisions based on the noise and incessant news-flow, educate him of the financial consequences of doing so. Counsel them to stay focused on achieving their long-term financial goals as long as they are holding some of the best mutual fund schemes.
3. Advisors should upgrade their knowledge
As a part of the advisory practice, it is essential to keep abreast with the latest developments in the industry, in the world of finance, new products, rules, regulations, plus read books on investing/finance, op-ed columns, blogs, etc. which ultimately can help render valuable advice and service to investors/clients.
Also, enrolling for courses will help financial advisors to hone skills and gain insightful knowledge.
4. Upgrade your practice management resources
In an endeavour to provide a unique experience to investors, as part of offering the best resources and tools to them, advisors should take note of the advanced technologies in form of the latest practice management software, applications, online calculators, etc. This also educates clients, increases transparency and enhances their accessibility to their advisors', which fosters business.
Advisors should also adopt efficient time management techniques, such as following an activity plan to reduce ineffective communication, incorporate any regulatory changes, compliances, and so on.
In addition, financial advisors should ideally have additional support and backup staff to keep up with the timelines in providing prudent advice to clients and respond to their queries promptly.
5. Take an oath to discharge professional duties following high fiduciary standards
An investor looks at a professional as a representative of the industry, the one who is ethical, unbiased, and provides research-backed advice and always follows high fiduciary standards. Honest ethical advice builds trust and goodwill for advisors, results in client satisfaction, a favourable reputation in the industry, and additional business.
Remember, building trust and gaining the respect of investors/clients is a continuous process, and advisors must prove their trustworthiness. One should place the interests of his clients at the fore, always! This ultimately builds a healthy client-advisor relationship, earns trust, respect, and love, of investors/clients, and helps retain the business.
Wealth creation is the foremost investment objective for all clients. But the process or path to wealth creation is what financial advisors need to prudently chart out and explain clients to make their journey of wealth creation enlightening.
