Listen to this article
Could you summarise the year 2023 in terms of business lessons? What are the three business lessons it taught that every MFD/RIA must know?
All the talks of major recession were put behind by the markets. It was once again a confirmation of the age-old lesson: markets are under no obligation to prove the forecasters right. Do not blindly believe in the forecasts. You may go through the analysis and assumptions of these forecasters to arrive at your views but keep it probabilistic. Do not worry about getting the 100% correct call. It is not going to happen. As John Maynard Keynes famously said, “It is better to be vaguely right than to be precisely wrong.”
What are the key trends that MFDs/RIAs should watch out for in 2024?
People will continue to expect forecasts. Many equate the confidence to forecast with one’s expertise. I repeat - confidence to forecast, and not the accuracy of the forecast. At the same time, if the forecast is about an exact number, people are more likely to believe than a wide range. Many experts also feel under obligation to predict, forgetting that they are trying to predict the unpredictable. Investors and intermediaries (MFDs/RIAs) are more likely to follow their emotions than cold logic.
Media (mainstream media, social media and everything in-between) would continue to feed us with humungous information, which would trigger action on the part of many. The wise would keep highlighting the importance of discipline and patience and we may still see money going towards ‘get-rich-quick’ schemes. At least the attitude is less likely to change. Having said all that, let us also be a little optimistic. Long term investors, investing in a disciplined manner are more likely to be wealthy than those who try to make quick bucks.
What are the three must-have business skills for MFDs/RIAs in the coming year? And why?
Understanding of human nature, empathy and patience. While we hear the discussions about robo-advisors, we do not hear about robo-investors (I mean robo-clients). In such a case, understanding of human nature and empathy are going to be priceless for any RIA or MFD. Patience is what a good RIA or MFD preaches. If that is not practiced, the preaching would be hollow.
What are the top two business opportunities (for example, retirement planning, millennials, etc) that MFDs/RIAs should tap in the new year? And how can they do that?
In a population of 140 crores, there is an opportunity wherever you look. Unless you have created a capacity to service crores of clients, do not worry about the opportunity. Focus on your strength and go ahead.
