Dear Financial Advisor

keep-calm-and-call-a-financial-adviserDear Financial Advisor,

Because of MProfit, I’ve had a chance to interact with 100’s of financial advisors like you over the past 5 years. And frankly, there is a lot of room for improvement. To the outside world you talk about financial planning, long term goals and asset allocation. Yet when you talk to me, everything is short term in nature – commissions reports, daily portfolio updates via SMS, real-time price updates, etc… There is a real disconnect between what you portray and what you actually do.

Over the past 5 years the Indian financial advisory industry has been going through a very painful but needed cleansing. A combination of government policy errors, general economic slowdown and investors fleeing the markets has led to many financial advisors getting flushed out of the system. The policy change in August 2009 to restrict entry loads was to combat bad behavior by many “financial advisors” who were just churning a clients portfolio. But, what ended up happening is that many respectable advisors like yourself got caught in the cross fire and lost a respectable amount of commissions. It’s been tough but I do believe the good advisors have survived and will continue to thrive because you provide value.

One of my biggest pet peeves is when I hear advisors ask for a way to send an SMS on a clients birthday. I just laugh to myself and think this “advisor” will be out of business in no time. Calling people or sending an SMS on their birthday is probably how it used to work when selling insurance. Nowadays people are being bombarded with calls and SMS’s. Here is some advice, clients hire you not to remind them of their birthday, that’s what Facebook is all about. They hire you to provide them with sound financial advice and hopefully outperform the markets by selecting the right mix of investment products. Hell if you outperform the markets, I’ll call you on YOUR birthday.

Many advisors call and ask “how can we increase our business?” then they ask “will starting a blog like JagoInvestor get me business”.  My advice has always been the same, give clients valuable and timely information. Don’t blast them with a daily/weekly/monthly newsletter if it only contains junk. If it’s tax time, provide some specific tax advice to your clients. Having known Manish Chauhan and Nandish Desai of JagoInvestor for quite some time, I know they spend countless hours answering relevant questions and helping investors on a daily basis…that is what you should be doing. They just happen to have a blog to reach out to people, you could have seminars or start a newsletter…the delivery method is irrelevant however the quality of the content matters.

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