When it comes to investing their hard earned money, investors are always skeptical. They fear taking the wrong decision for their investment, which might result in loss of value. To overcome this fear, they will either try do some research on their own, seek tips from friends or rather follow a friend like Eklavya, investing on the basis of ideas overheard. Even if the investor asks a friend about investment, very few people actually share with friends whether they have invested or not. Reasons are twofold, One, you don't want to be laughed at for making bad choices in your circle of friends and family, Two, financial matters are closely guarded, you don't want to divulge your investment details to anyone.

In comes the Financial Advisor. Every investor is looking out for someone dependable, knowledgeable to guide them through these financial troubles. But there is a problem. How do I trust the person with my money? Is he having sufficient expertise to manage my funds? Will he give me the right advice? Will he be available in my hour of need?

As an advisor, it is critical that we understand and address all these concerns of the investors. Some investors might come forward and state these concerns clearly, however many will hesitate. It is our responsibility as an advisor to comprehend the unsaid, and give comfort to the investors through our conduct, understanding their expectations and communicating what we are going to deliver in a clear and direct manner.

Trust is the most important ingredient of an investor advisor relationship. It is going to be built only over a period of time. You can't say “Trust Me” to an investor to induce trust in you. So how to develop a strong dependable relationship with a new client.

1. Right Introduction

Sample this, If you meet a new client and introduce yourself as, “Hello, I am XYZ, Currently managing assets worth Rs. 50 Cr from more than 400 families since last 10 years. Me/my team has helped our clients in settling insurance claims worth Rs. 50 Lac in the last 3 years. We operate completely online and try to provide best possible solutions related to investments and insurance based on specific needs of the client. Please feel free to ask me any questions you might have in your mind”

Even if you are new in the industry and do not have big figures to vouch for you, you can share your association with NJ, your certifications, your own investing experience, your differentiating points, the online platform, and most importantly your intentions of creating wealth for people.

You have given a fair idea of your experience in this short introduction. Also, you have given an opening to the client to freely ask whatever questions he may have. To have a more professional look, you can either share your printed profile containing the above information or have a video profile. Though, a small step, but gives a clear indication to the investor that he is dealing with a professional.

2. Do your homework

Know your Customer, and not just from the mandatory documentation point of view, find out which field the prospective client belongs to and try to give examples or references of clients handled by you having a similar profile. Example, with a doctor client, you can talk about some doctors known to you or may be your clients. For an IT industry person, talk about your IT clients, if any. For a retired person, you can add, total number of retired clients handled by you. This helps in breaking the ice. One word of caution, do not divulge investment/portfolio details of any of your existing clients. Not only does this constitute as breach of privacy for your existing clients, but also gives impression to prospective investor that his investment details might not be safe with you.

3. Ask Right questions

Once investor is comfortable with you, be ready with your questions. Remember first couple of meetings are about understanding the investor better. Don't be in a hurry to sell your products. Ask about his goals, investment pattern, Direct Equity/MF investment experience (if any), insurance coverage, pending loans, working members/dependants in the family, his expectations from his investment, Job/business, monthly expenses, etc etc. You should preferably have a ready questionnaire with you for collecting all these details. You need to be clear in communication that you will be in a position to give right advice only when you have right and complete details. The detailing in your work also gives right impression to the investor.

4. Keep Expectations in Check

Be clear what you are going to deliver and what you aren't. Always under promise and over deliver. Apply this to return and servicing expectation of clients. Talk about volatility in returns from market in short term and how it can affect performance. Share how frequently you will meet and review the portfolio. The client needs to update you in case of change of job, salary, inheritance, etc. Also, client needs to rebalance his portfolio periodically, if invested in MARS. Clients should not expect advice/meeting every few months.

5. Use Client Networking

Best way to gain the trust of clients is to utilise client networking. A doctor client will be happier if you sent some patients to him. A client looking to refurbish his house can be connected with a client having paints/hardware/interior design business. One connection gives you two happy clients. The more you are in touch with your clients, higher will be the chances of discovering such needs. Keep your eyes and ears open during client interactions to discover such opportunities.

6. Trust takes years to build but can be lost in a second

It takes multiple meetings over the course of years to build a strong relationship with the client. You need to have your patience and take it step by step. Your conduct has to be in the best interest of the client at all times. One mistake and a relationship of years can be ruined. Keep your communication clear and client expectations in control. Your greed for an extra percent of income some times can cost you the client for lifetime.

7. Annual Meeting

Have an annual meeting with all your clients. Think of it as your AGM. You can discuss how your business has grown, how your team size has grown, new products and services on offer. Above all you can utilise the event to say Thank you to all your clients. Everyone likes to be associated with an advisor who is growing and prospering.

8. Hand-holding during difficult times

You are in a business which revolves around the thing which is most dear to your clients, Money. Their expectation from you is managing their money in a way that it's always moving up. However, there are times, beyond your control, where the wealth creation journey takes a U-turn and gets back on track, only after a while, with a lot of difficult trenches in between. This is a very critical time, because no one wants to see his/her wealth depleting. One of the most important roles of your advisory relationship is to face the client during the downturn, support him emotionally and guide him towards the right path.

Trust is something which can not be shown or communicated. It can only be demonstrated through conduct. A partner needs to be a friend of the investor for having deeper connections. Trust is also fickle in nature and doesn't remain constant. Market fluctuations, a non performing fund, non courteous support staff, many factors can affect your trust with the client. Sound knowledge, high service standard, regular portfolio review and above all advice in best interest of the client are some important ingredients to build trust. High trust will automatically yield better references. It also releases lot of stress of the client as he knows there is someone to guide him in the right manner.

Written by: Mr. Husaini Kanchwala, Head of Investments, NJ Group.

For any suggestion & feedback, write to him at This email address is being protected from spambots. You need JavaScript enabled to view it.

Women Empowerment is the talk of the day. Women are moving out of their veils and standing up for themselves. Every other post on Social Media is about women, people are fighting for women’s rights, for according them the stature they deserve. Feminism is in the Air.

And amidst the commotion, there is a clue for us Advisors, this is the future, get your act together, because financial independence is a crucial aspect of Women Empowerment. Diversify Your Client Portfolio, start getting women onboard. We can see the future, the rise of women, and therefore the rise of our business lies in the obvious.

Many advisors have only a negligible percentage of women in their client base. This is because despite all the propaganda, there are some old school myths attached with “Women and finances”.

Myths

• Women do not understand Savings and Investment
• Women are not interested in Financial Planning
• Women do not have money for Investing
• Women do not have a say in family financial matters

While in the present scenario, these myths do not hold true. For better understanding, let's categorize women investors into two: The Working Women and The Housewife

The Working Woman

This category of women is consistently on the increase. With greater education, exposure and acceptance, the participation of women in both businesses and as employees, is on the upturn. And it's not just about the number, women are securing meaningful roles in organizations, and corresponding are their salaries. So, this category of women has some peculiar traits which are relevant in this context.

• They have a regular inflow of money: That goes unsaid, the most important factor of why you should target working women is their regular income.
• The primary responsibility of bringing the bread into the house is generally not on their shoulders: In many cases, working women have a lot of disposable income because they are generally not the sole earning member of the family. They do play a supporting role, the acuteness varies from case to case. It is also increasingly seen that many women work for their financial independence and to keep themselves occupied.

With money coming in every month and lesser obligatory expenses, it's easier for women to start carving out for SIPs. They might have some existing savings and investments, which can be directed towards the right products.

• High Discretionary Expenses: Working women generally have high discretionary and lifestyle expenses, which is a bi-product of the above two characteristics.
  There is scope for a lot of these expenses to be chalked off and be directed towards savings and investing.
• Huge balances in Saving Accounts: Because of regular and high disposable incomes and also because the inherent quality of saving is present in most women, they have huge saving account balances, irrespective of the discretionary expenses.
  These huge balances deserve a better return than Savings Account, so some portion of these savings shall go into into Liquid Funds for immediate needs, while the rest should be allocated to products with a high return potential, to fulfill her various short and long term goals.
• Exposure: Since they stepped out of the house, they have seen the world around, they understand the risks. And they do realize the importance of securing a safe financial future for themselves and their family. Such women need the right guidance, they do realize the importance, they just need the right direction, the right financial planning.

The Housewife

The other category of women, the Housewife. Although the housewife, does not have a monthly running income, yet her investing capability should not be underestimated.

• She's a housewife, doesn't mean she's broke: She might not get a salary every month, but she has her savings. Saving of a housewife can range from tens of thousands to tens of lakhs. We all have seen the show during the demonetization phase, many tales of domestic treasures unveiled were revealed. Though the tales were taken lightly, in fact served as comic content for Facebook pages and WhatsApp groups. But these stories have brought an important business lesson for us, Don't estimate the power of a housewife. She might have immense riches buried in the secret corners of her house.
• With greater digitization, women who earlier were not able to get out of their houses for work for their family commitments, are also venturing out into online businesses. They get the liberty to work from their homes and there is inflow of money which is largely being stacked up in their saving accounts.

So, you need to drag the housewife's money from their cupboards and their saving accounts and direct them into more productive avenues.

• She's not earning, but she has the power to influence her family's financial decisions: She understand the financial needs of her family, she has shared goals with her husband of buying their dream home, providing for their kids education, their marriage, a happy retirement, etc. And therefore, she has a major role to play in deciding how to go about planning for achieving those goals. So, it is not necessary that you approach the working spouse for investing, it can work well the other way round also.

So, the bottomline is, Women pose a big business opportunity for us Advisors. We need to understand and explore the potential and grow our business. We need to look ahead, the future of the India will not just be steered by its men, the entire country has joined its hands together, we too should join hands in the movement by empowering our ladies financially.

The coming of a child in any familly is an occasion of great happiness and rejoice. After the initial euphoria, invariably the thoughts of securing the child's future and providing for the future needs arise. In the hearts & minds of the parents, a lot many dreams and aspirations also start taking shape. These dreams and aspirations perhaps carry the highest priority for any parent.

The above is a common phenomenon for any new parent. Even for existing parents, the growing need for child's future planning is increasingly felt as the child matures. Gone are the days when a parent could relax and think that good upbringing and focus on studies would ensure a good future for the child. The fact is that child planning has become very critical for every parent and it can no longer be ignored or delayed.

Goals for child's future:

Need for strong educational background:
The need for a very strong and quality education is increasingly felt in today's competitive world. With India's burgeoning young population, the excellence in education is a determining factor in the race for better careers today and it will be even more so in future.

However education, especially quality education doesn't come cheap and it is also something that parents hate compromising on. A child's school costs alone have reached sizeable amount. For higher education in reputed institutions can easily cost upwards of Rs.10 lacs in today's value. Similarly education in foreign institutions can easily cost upwards of Rs.20 lacs. Arranging such amounts for education is a big financial goal that needs planning before hand if one wishes to give a good start to the child's future.

Planning for marriage of Child:
In India, marriage is a gala event where money is spent more lavishly. Every parent dreams of organising the ceremony as best as one could provide given the status and social standing of the family. Marriage, especially for girl child is still considered as a big responsibility in many parts of the country where the family often feels obligated to provide for the entire wedding expenses in addition to gifts to the groom's family. With rising prices of gold & jewels and wedding costs, which are increasingly becoming more stylish, the future marriage costs are most likely to be beyond what you plan today. It is thus only logical that parents feel marriage planning for child to be a big financial goal and thus should plan for it today.

Planning for home and/or business capital:
In addition to education and marriage, many parents would also like to provide for a separate homes for their child. There are some distinct reasons behind this like the growing trend of nuclear families, rising prices of real estate and homes becoming smaller to accommodate large families. Parents, especially for the male child, feel the need to have distinct homes that would provide for a great sense of security & a big asset for the child in future. Similarly, there are also parents, especially from the business communities, that may think of planning business capital or seed money for their child own business venture when the right time comes.

Planning for home or business capital for child is one lesser importance than to arrange for education or marriage. Nonetheless, it is something that many parents feel important to provide for and thus requires proper planning by the parents.

One area of that we feel left is that of accomodating for expenses on child's education and upbringing on general terms. One can easily see that after the arrival of child in family, the monthly household expenses easily rise by upto 15-30%. Rise in such regular expenses are in nature of school/college/tuition/hostel fees, pocket money, shopping, gifts & small assets, etc. Though one can plan this as financial goal, often these expenses are adjusted in the normal cash flows of the family.

Nature of the goals for child's future:
The goals related to your child's future are slightly different from the other goals. Let us look at some of the unique features that go along with such goals.

Inflation or rate of rise in costs: In goals like education, marriage, etc., one cannot estimate the percentage rise in costs. Neither pure inflation figures can be assumed for such goals. The reason being such expenses are a lot subjective. For eg., while planning for education, one cannot strictly decide upon the nature of course, the institution or the level/years of education today. Further, the rise in prices for such education courses are not driven by inflation but more by the rise in quality of programme, facilities & instructors. Similarly while planning for marriage, one can easily see the sea change in how marriages are being conducted in past and current generation. There is also the angle of rise in social stature which we may not account today. Again inflation is only an indicative figure here and one needs to consider other factors too.

Thus, one needs to play very safe while planning for education and marriage. The best thing to do would be to consider the costs of the best education and marraige that can be provided and assume a rate appropriately higher than inflation while planning for such goals.

Maturity time: In case of education, the maturity of the gyouoal is generally fixed and one knows that higher education will be pursued after graduation. However, in case of marriage, it again cannot be fixed in advance though a likely marriage age can be fixed. The better idea would be to fix the marriage age on the lower side for planning purpose so that you have the corpus ready should you need it sooner.

Security: Another unique perspective while planning for child' future goals is that of security. By security we mean that the goals of education and marriage need to be secured in the unfortunate event of death or disability of the parent. These goals are such that they are destined to mature, irrespective of anything happens to the parent.

Planning tips:
There are no special tips for child future planning. The tips applicable here are the same one that is universily applicable to all goals and most likely that you would have heard of.

Start as early as possible: One may start planning for such goals even if you are not a parent. For existing parents, one strongly advisese to start as early as possible for such goals.

Invest in right asset class: We already have talked a lot on the importance of choosing the right asset class according the risk appetite and investment horizon. Equities are the best option for long term goal planning since they are expected to deliver better returns, especially in a growing economy like India.

Save Regularly: Making regular savings a habit is probably the best thing of financial prudence. Small regular investments can greatly help for goal planning and is a better option than waiting for big sums of money to be accumulated for investments.

Insuring future: A special case for insuring future of the child through products like insurance and other similar products is an important need for child planning.

Investment options: There are plenty of investment options available in the markets. The investment options can be pure investment options in different asset classes and can also be in nature of customised products for child goals, as available in insurance products. What is really important for parents is to inquire about the options available in the markets while making the decisions. While selecting any scheme or plan, do not just look at the name which may contain the word 'child' but look at the actual features offered by them.

The main purpose of this article is to highlight the importance of planning for child goals. In an increasingly competitive and uncertain world, as a parent securing the future of child assumes great significance. It is something that should not be delayed and never avoided. The best way to begin is to start assessing the needs and goals for your child's better future today.

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Over the last few years, the term "financial planning" has been very often used and heard by many of us. In this article we explore as to what this term really means and why it is important for us all.