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Tell us about your early
career. Did you always wanted to be a financial planner?
After completing MMS – Finance in 2001, I joined a private bank as a Relationship Manager - Third party products. The role involved selling products like bonds, mutual funds, insurance, non-bank fixed deposits etc. to clients. I realized very early that pushing products with the sole focus of earning commissions was not my cup of tea. I quit in less than two years and (quite luckily) landed a role in the Wealth Management Group with Parag Parikh Financial Advisory Services (PPFAS). Everything I have learned, I owe to my association with this company. Learning came not just in terms of good long term money management, but also about honest and ethical engagements with clients. At PPFAS financial planning was recommended much before it became popular .I worked here for about nine years after which I took a sabbatical in 2012 for a year .It was only early 2013 that I started on my own as a private wealth manager.
What were your biggest learnings as a wealth manager?
1. Be honest to your profession. Respect your skills and charge the right fee for the same. At the same time, keep improving professional skills and knowledge. (I completed my CFA from ICFAI and CFP on the job. These qualifications have been great value adds in my career)
2. Integrity and ethics is everything - Your client will forgive a mistake, but will never forgive or forget the feeling of being cheated. It is his/her money on the line.
3. Follow all regulatory requirements. It is not that complicated.
4. Keep advice very simple – Every problem will have a simple solution. Clients prefer simplicity. It gives them the power of understanding and control over their money. Experience tells me that complex solutions/products only confuse and don’t deliver results.
What made your register with SEBI as Investment Adviser? What are the pros and cons of registering with SEBI?
I took a sabbatical in 2012 and in Jan 2013 decided to start my own practice as a private wealth manager. I was clear from the beginning that I will be a ‘only fee ‘investment consultant. Commissions and fees create a conflict of interest and I wanted my interests to be fully aligned with clients. It just happened so that SEBI came up with the Investment Advisor regulations just then and so I registered.
Since I am not an ARN holder, registering was mandatory. I believe a lot of people in the fraternity have a feeling that registering for SEBI is a voluntary activity, but it is not. If you are a ‘fee only’ consultant then you have no choice but to register.Not getting registered would be a violation of rules.
The pros are many. Clients know they are dealing with a regulated entity and hence the sense of security and trust is high. Regulation requires keeping records of advice given which is a necessary and good practice.Not only do such rules protect client interest but also the advisor .
The only con here is that there is compliance to take care of and you need to get an annual audit by a CA. But if you put systems in place, this may not be such an arduous task.
What kind of services do you offer to your clients?
I offer customized wealth management and financial planning solutions. Clients engage me to help them with investment advice, product selection,asset allocation, rebalancing and managing equity/mutual fund portfolios. I also provide then analysis (on parameters of risk, return, expenses, liquidity and taxes) of various products offered by banks, brokers etc. to help them take informed investment decisions.
Trail fee forms a large part of distributor’s commissions. Is it commercially viable for advisors to offer purely consulting services?
It is not only viable but also the right way ahead. If you can put right systems in place and offer value then viability will not be issue.
Your future plans…
Right now I intend to stay with a small number of investors. Growth will happen organically with client references. This is where I see things going for next two to three years.
