At the eighth edition of Cafemutual Confluence (CC19), Randall Bachman, Head of Business Development, Principal International, USA said that Indian investors feel that financial planning is complex and they do not find it interesting. Instead, they just want their money to be invested, he added.
Here are some key highlights from his presentation.
The top six things that investors seek
- Consistency: People around the world are seeking risk mitigation. The word that was heard the most during the survey was ‘consistency’, people need consistent returns
- Value and worthiness: Investors will still pay if they see value in a particular product or advice
- Yield: Investors are hunting for yield; they are saving for goals. Needs or goals may differ and investors understand that; they just need some guidance through the process - that’s where IFAs play significant role
- Simplified process: Investors are looking for help to make investing simple because the industry is complex. They need help to see how it fits their needs and help achieve their goals
- Performance: Short-term performances are becoming more and more relevant. Long-term story resonates but investors want short-term returns too. The new generation is focused on today and not so much on the future
- Financial control: People want control of their finances but they also want help. Some of them are interested in finance but most of the times they are not sure where to start
What do investors in India say?
- Financial attitude: Around 90% people said they want control of their financial decisions yet they value some guidance. It is a great opportunity for advisors to collaborate up with investors and help them solve their problems. Consumers in India believe financial planning is complex, they don’t find it interesting and just want their money to be invested
- Reliability: Investors said ‘reliability’ more than any other word. Investors also used other phrases such as providing expert guidance, being straight forward, acting with integrity and focus on long term success
- Personalized and customized: Investors want solutions that will help them reach their goals, not a list of products
- Simplified: Investors want open and clear communication, easy to understand and someone who had a clear overall picture of their financial situation. They express strong interest in receiving regular analysis of their situation and hope things will change in their lives. They expect that you will help and guide them through their investment journey because they don’t know
- Gauging to take action: Investors are looking for help because they are doing most of the things for the first time in their lives, they need to know what kind of financial products they need
- Making the pursuit of financial health easier and more doable: They want a customized plan, they want a target oriented plan
Opportunities for IFAs:
IFAs must get in touch with the people who do not know where to start, talk to them about these financial products or solutions and how they fit their requirements.
- Holistic planning: Advisors need to move from product pushing to holistic planning. Investors are not looking for just products pushers
- Risk assessment: IFAs need to understand why someone is conservative and help them move along, we need to understand the “why” behind the risk assessment
- Goal based investing focus: Around 73% people cannot name their top financial goals. When IFAs say that they can help you achieve your goals, 73% people do not even know what they are and help them understand those, give them a list and tell them what others might be focusing on.
- Trust and Confidence: If investors can trust you, they are going to listen to you. People always take advice of people close to them.
