"The most basic of all human needs is the need to understand and be understood. The best way to understand people is to listen to them."

Listening is a very important skill, for the survival and growth of any business, especially in industries where there is a lot of client interaction, since it is a vital part of communication. Ours is a line of business, where client communication dominates the scene. So, among the assortment of soft skills that we need to excel in, financial advisors must also be ace listeners. That's also one of the most prominent aspects of human touch and an unparalleled edge that you have over robo advisors. Yet we don't come across much material on the subject. It doesn't get enough weight in our degree courses or vocational trainings. Even in B-schools, students are taught presentation skills, reading skills, Group Discussion skills, Interview skills, but not listening skills.

So, how do we go about finessing our listening skills is the centerpoint of this passage. We have listed down few techniques that you can apply in the normal course of your practice to effectuate the same:

1. Negative Feedback: It's human nature that we only listen to what we want to hear. Until the time the conversation is neutral or is pro the listener, the listener will lend his ears to the speaker, but the moment the dialogue goes against his/her views, there will be a mental blockade, he/she will hear only to retaliate, rather listen to the speaker's viewpoint. Often our reaction to a negative feedback is also similar. When a client is unhappy, there will be two possible reactions: 1. He/She will communicate the discontent to you or 2. Sulk for the time being and will eventually disassociate from you. If the client chooses the former, i.e. gives a negative feedback to you, it is an opportunity that's thrown in your lap to be aware of your flaws, so that you can work upon them and progress to be a better advisor. If you hear the negative comments, only to give a counter response, you are not only ruining the opportunity but also hurting the client's sentiments who has taken the initiative to convey his displeasure. So, the first step to being a good listener is be receptive to negative feedback. It will display your commitment to client servicing and thus will develop the client's confidence in you.

2. Maintain eye contact: The second rule of effective listening is also a pivotal element of your body language, to look into the eye. It sounds simple, but this is a tricky one. If you are looking down, or here and there, while the other person is speaking, it conveys your lack of interest. Staring too hard is also not a good sign either, it's itchy and may make the speaker conscious. You need to maintain a balance between being too aggressive and too timid. So, how do look into the eyes yet not stare?

• Hang Around on the face: Look into one eye for five seconds then the second eye, then forehead, repeat.
• Take Breaks: Take occasional breaks from seeing eye to eye, you can look around at a plant or a glass or run your hands into your hair at the end of a particular topic, or after may be a 20 second gaze, etc.
• Acknowledgment: To break the ice and keep the mood of the conversation light, an intermittent nod, a hmmmm, a yes; can be a great way to display your interest in the talk, while leaving space for small intermissions from the constant look.

3. Seek Clarifications: It is very important, that all the parties in a dialogue, are on the same page, at all times. So if you happen to lose track of the conversation, you must prompt the speaker to seek clarification, or ask questions for clarity of understanding. So, if you are talking to a client, and you are not able to comprehend the context, ask what does he/she mean exactly, ask additional questions to assure understanding the full implication of the argument. Your efforts to seek clarity depicts your genuineness. However, you must note that you must interrupt the client only when he's done speaking, don't interrupt the flow of the speech, it may irritate the speaker.

4. Distance yourself from gadgets: In our field, more than half the business is carried through mobile phones, so constant sounds of the phone is an incessant process and is almost inevitable. However, when you are with a client, keep your mobile phone aside, either switched off or on silent mode, so that you don't bug him/her by frequent ringing or constant tinging of WhatsApp. Because despite your best efforts to pay utmost attention to the client, you may not be able to concentrate and may even end up irritating the client.

5. Don't jump on to conclusions: The last element of effective listening is, do not assume what's coming ahead. Listen to the speaker's argument in full, and not judge without knowing all the facts. There may be some very important facts coming up, which may change the shape of the discussion altogether. Respond only after listening carefully, completely and after giving a thorough thought.

To conclude, When we speak, we repeat what we already know, listening to people gives us an opportunity to learn something new. So, listen with an open mind, be all ears to the speaker, maintain eye contact, let no stone unturned in creating an environment for the client to speak his heart out. Our success in the venture lies in our ability to control our sensations.

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Happy New Year !!

As we enter 2019, a new year of promises, opportunities and hopes slowly dawns upon us. It is the season of making resolutions and before we continue with the article, there are a few resolutions or wishes that we have for you. We wish that this year, may we see you as more updated and knowledgeable, may your clients be very satisfied with your great services (make them great!) and lastly, may you achieve your business targets!

It is important to remember that investors are with you because of the services and the guidance that you provide. Thus, the edge the advisor has is his knowledge and his ability to keep the client happy.

While we have closed the calendar year 2018, it is important to remember that we are just 3 months away from closing the financial year 2018-19. One area where you as an advisor should bring into extra focus is tax savings. One can never be too soon with tax saving. Time is short and it is best that we do not let our clients be at the mercy of their CAs to take good care of it? Should you allow this to happen? Absolutely not and you have to intervene.

As an advisor, your role is not just limited to suggesting and helping your clients with investments. It is your responsibility to also make sure that these investments are being made according to the investors' requirements and also to make sure that all the benefits provided by these investments are being availed by the investor. A very important piece of investment planning is also related to tax planning. Making full use of the tax savings options available to the investors should be an aim to achieve but one should also keep in mind the investor's needs. Suggesting the right kind of instruments for tax savings to the extent feasible is what you should aim at.

Obviously, ELSS is on top of the list here. As advisors, we already know why ELSS is the idea tax saving instruments for investors and the great advantages they provide. Since ELSS invests in equities, the returns are likely to be much better than the other tax savings instruments like PPF, NSCC etc which provide tax relief under Section 80C. While most instruments provide a return of 7-8%, one can easily expect a return in excess of 10-12% in the long term from ELSS.

Another hidden advantage of investing in ELSS is that it gives the investor a taste of investing in equity. Thus ELSS can be an entry point for equities for those who are shy of it. It can also be part of the bare minimum equity asset allocation for investors who are risk averse and investing primarily into debt products. This way, limited equity exposure is provided with the primary objective of tax savings. We know that investors readily agree to invest in them because of the tax savings and low lock-in period, so if they are not happy with the returns they can exit easily. However, since our primary goal has to be tax saving along with long-term investments, as the investors notice better returns from ELSS, they are motivated to invest in other funds which are equity-linked.

But don't NPS and ULIPs provide similar returns and also help in tax savings? Sure they do, but they also have a high lock-in period. A high lock-in period disables you from getting out of the investment in case of need and also from shifting to another investment in case you are not happy with the returns. As an advisor, you must be aware that what is easier, convincing a client to invest in a new product with a higher lock-in period or a lower lock-in period.

Thus, not only will ELSS make a good tax saving instrument, but it will also help you in convincing clients to invest in schemes with high exposure in equity as they will see the return benefits. Again, this benefit is limited for those investors who have the risk appetite but are dubious of investing in equity schemes. Thus, the beginning of a new year gives you just the right opportunity to speak to your clients to invest in ELSS and not just save tax but also earn better returns.

How to plan for ELSS?

We would suggest that you get the figures for investments made into ELSS by your investors for this financial year. This can be easily fetched from Partner Desk using the Account Insight Report and/or the Transaction reports.

We would like you to calculate the following figures: ELSS investments already made this year and the like gap in the ELSS investment limits (i.e., short-fall against 1.5 lakhs limit)

Once this information is at your disposal, please identify the following investors...

1. Investors who had invested last year but have yet not invested in ELSS this year – Zero investments

2. Investors who have not invested as much or are likely to save less compared to last year – Less investments than last year

3. Investors who are likely investing in ELSS below potential – the gap in the potential of maximum 1.5 lakhs

4. New investors who have not invested or have not adequately invested in ELSS

On having the above information, you should have them sorted on the potential ELSS investments target – starting with the highest amount. This is now a piece of very important information for you. You should ideally start working on this list immediately. You may also consult your relationship manager on the entire strategy of getting more ELSS investments in the next two months. Don't leave things till the last month.

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As the year-end approaches, we have all begun to look at the past year and think of the new things we want to do in 2019. We begin to make resolutions and try to stick to them. But this year, don't just make new resolutions but also learn from the past years. Resolve to sit and look at the year gone and what you did and what you didn't do. Look at all the things you wanted to achieve at the beginning of the year and where do these goals stand today. Have they been achieved? Are they still pending? Did you change your mind about some of them? And which one of these goals do you want to carry to the next year?

To review your financial goals as an advisor, ask yourself these questions

Have I achieved my targets?

At the beginning or even during the year, you must have thought of reaching a particular amount for the corpus or hitting a number for total clients you wanted to achieve during the year. Look at these goals. Are you close to the total corpus amount? Were you able to achieve the desired number of clients?

If your answer is yes, it may be just the right moment to pat yourself on the back, but also the right time to review what worked for you. What I mean here is, what is the strategy and building blocks that helped you achieved these goals and are these strategies feasible for the future?

If your answer is no, look at the reasons why you were not able to achieve them and analyse solutions which will help you overcome these blocks. Was there something that you should have tried or something which you tried but shouldn't have? Make a plan as to how you will achieve this goal in the coming year and the new or old and revised techniques you will be using.

Have my clients achieved their targets?

One of the important aspects of being a good advisor is being in communication with your client and being approachable. Your clients have certain expectations from their investments and also needs. As an advisor, your job is not only to advise them with their money once, but also look whether the advice is working or there are changes that need to be made.

Another reason why you should take time out and speak to your client, if you already haven't, is the volatility that the market has portrayed this year. Lingering effects of demonetization and GST, elections, global market cues, rising and falling crude prices, changes in growth expectations etc, have all been bundled in 2018 and thus has affected the markets. The returns have been volatile and in fact, the returns for 2018 may be below expectations for a lot of portfolios. Thus, as an advisor, you should speak to your clients, especially the new ones, about the performance of their investments this year and help them understand that this is all short-term and they need to cut out the noise. It is the right time to teach them patience with their investments and make them understand that it is important to stick to their investment philosophies unless a fundamental change in the philosophy is required.

Reviewing that the investments are in line with the client's long-term goals

As the new year begins, also begins the last three months of the financial year and gives you just the right time not only to see your performance but also make amends to it. It gives you the time to make or re-balance investments for your clients which helps them with maximum tax savings and also enough time to undertake portfolio review and re-balancing, if required, in order to make sure that the investments are working towards the big picture i.e. their long-term goals.

On 1 January 2019, one has three months to the end of the financial year which is enough time for one to project his or her earnings and expenses for the year, make tax calculations and see what deductions and exemptions one can avail. It also gives one enough time to compare various investments and their risks and returns to make sure they choose the right product for saving tax. Tax planning should be a major objective at the calendar year start. The review also gives one enough time to re-evaluate the long terms goals and needs and formulate a plan on how to go about for the next year.

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This article could well have been titled slightly differently as “how to make clients think long term”. While that is an important topic in itself, many of you would agree that even long term clients often do get affected by short term events. In such case, the challenge really is in how to slowly train the clients to ignore short term events.

Take for example today's (11^th December, 2018) keenly watched event – election results for five states. Along with the results, some market volatility is expected to happen. I am sure that clients would also love to wear an astrologer's hat and attempt to predict the next year election results based on their personal but expert reading of the situation and also have some investment outlook / actions or strategy based on same. These ideas will be thrown at the advisor and some advisors may then be in a fix – how to handle such clients?

Well here are a few thoughts on how such clients can be trained over long term. But before we fund through the ideas, it would be better if you have a confident, well defined and logical approach to your advisory practice. So here are the few ideas that we wish to share...

1. Do not entertain or engage in short term forecasting:

The role of a good financial advisor is not to forecast equity market conditions or levels in short to medium term. However, an advisor may look at expected market volatility and current market levels to suggest appropriate investment strategies which are based on sound logic. While you may entertain clients in friendly market or political banter or conversations as part of relationship management, predicting outcomes or deciding short term investment strategies on such predictions, is strictly not advised. We would also not like you to engage in too much gossip, this only shows that you do not value your time to clients.

2. Create your brand and build around your investment / advisory approach:

A consistent and non-compromising approach to advisory is what you should adopt. Your approach may be a more detailed or refined version long term investment planning / financial planning / objective based approach. We would like you to stick to your guns and do not wander away with any innovative or tactical or any opportunistic, short term investment ideas. Once the clients are clear that you do not talk about short term, they are less likely to expect any changes in their investment plans on any short term / current events. Over time they will be better trained and suited to your style of functioning. That would mean less phone calls, less explanations, less stress and more business.

3. Learn to say 'No':

One difficult task for advisors is to say no to their clients, especially the big ones. We may often find ourselves in a situation where we have to make a choice. Choice can be between business or relationship on one hand and your advisory approach / style / ethics, etc on the other. Well we are like you to say no to such clients; unless it happens so that the client is who is driving your business or is one who cannot be ignored. In such rare instances, you have to take the final call. Except the above excuse, we recommend that you continue to stick to your guns and say no to any adventure. While some clients may leave you, over time would will find yourself attracting more clients suited to your approach than otherwise. It is better to part ways with a client who does not value or understand your approach and instead wants you to follow his own opinions. Such a client is risky who may some day leave or blame you and it would rather be better to invest in other client than him.

4. Make right conversations and communications:

Many a times the events are such that they naturally fade out from the minds and markets. One does not need to alert the investors of or give commentary on such events. That is not a frequent communication that should likely happen. If done, this is bound to attract attention and reactions from investors. However, there would be some events and market conditions that may require your attention. A period of extreme volatility or one sided movement of market in short term would be an opportune time to communicate, especially when the movement is a sharp one down south. Other occasions for communication would be when you would be initiating any asset allocation change or change in equity market overview and/or may be the periodic review of the client when some commentary is required to justify your investment approach. The point here is that, communicate the right things at the right time and not to communicate too much stuff when not required to be communicated.

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