I have been writing a lot recently on what an IFA can do, will do, must do….here is what he must do:

1. He MUST charge a fee for the work that he is doing: When an IFA does something free, the client has no respect for the work that he/she does. So for starters, do not do anything free. It is not worth doing it free.
2. He MUST ask the client to write down the goals and ask his wife also to write down her goals – making them sit separately. Once this is done, you should EXPLAIN why Goal setting is very difficult and why they should have a) personal goals b) joint goals and c) family goals. Make sure Goals are SMART.
3. He MUST explain why it is difficult to a)adhere to goals b) conflict of goals c)urgent goals and d)important goals
4. He MUST explain that if there is not enough a)money b)understanding c)energy and d)correct asset allocated to the goals, the goals mean NOTHING.
5. In a meeting lasting 90 minutes, 45 minutes should be spent on GOAL setting.
6. Asset Allocation: depending on risk taking capacity and need do a sensible ASSET ALLOCATION for achieving the Goals which was decided. Explain this to the client for about 15 minutes.
7. By now the client would have understood how the investments made till date can be tagged to goals, and those not tagged have to be sold off – while remembering the tax implications.
8. By now the client knows how much should be the size of the SIP (remember Nano Sip and Jaguar Sip I wrote about recently?).
9. Next 5 minutes on fund selection (a midcap index fund and a large cap index fund may suffice, if you are not sure how the alpha was created in the past, and how much of that alpha is sustainable, especially in the large cap funds)
10. Next 5 minutes on execution.

End of story. Collect your fees.