There is a saying ‘Doctor aur Vakil se kuchh bhi nahi chhupana chahiye’. A financial advisor should aspire to be in that position.
In many ways, the nature of the client – advisor relationship in financial advisory is like professionals such as doctors, lawyers and consultants.
Between the three I believe doctors and financial advisor’s jobs have many similarities. Let’s looks at them one by one.
|
|
Doctor |
Advisor |
|
Diagnosis |
Required |
Required |
|
History |
Past history must be shared |
Past history must be shared |
|
Prescription |
Doctor writes prescription, patient follows instruction |
The Advisor makes recommendations that the client is expected to follow |
|
Disclosure |
Patient is supposed to disclose everything |
Advisor tries to get the maximum information possible |
|
Relationship |
Even family doctors are visited only when there is a problem |
Financial advisor is needed in many non-financial discussions. He needs to create that need. |
|
Family member |
Family doctor rarely becomes family member |
Financial advisor can become extended family member |
|
Transaction |
Prescription is not considered as transaction |
Advise is perceived as transaction |
|
Learning |
Learning is continuous |
Learning should be continuous |
|
Capital |
Cost of medical study is very high |
Money needs to be invested on studies, training, coaching etc. |
|
International exposure |
Possible through conferences |
Possible through conferences |
The above table suggests that there are similarities and there is even more scope to move on the same professional standards. If one invests in knowledge and training, there is no reason why client will not perceive you as financial doctor. If these gaps are filled, your client will rely only on one financial advisor as he/she relies on only one doctor.
Why is financial advisor not given professional regard? Generally, the business of financial advisor has never been treated as a profession which requires capital, intellectual or financial. Everything has been very ad hoc. The aspiration levels have been low. The reason could be that the advisors were not exposed to international markets, study materials etc. and there is no such course other than CFP which one can add to his/her credentials.
A professional approach to the business will help bring in more trust factor to the client-advisor relationship and client will be more open to the advisor. The lack of professionalism generates fear for both - for advisor of losing the client and for the client of losing the money.
Client expectations are changing. They need ease of transaction and want more professional approach in managing their finances. That's where a financial advisor has a huge scope of becoming a friend, philosopher and guide.
There is a saying ‘Doctor aur Vakil se kuchh bhi nahi chhupana chahiye’. A financial advisor should aspire to be in that position. Probably one day financial advisor will also get bracketed with these two professions.
Vinayak is the Co-Founder of 'Insights' a Business Coaching firm for Financial Advisors
The views expressed in this article are solely of the author and do not necessarily reflect the views of Cafemutual.