When I walk into an IFA class, most of the candidates there are over 50. Well make it 45 if you wan’t but what I am missing is the 22 year old advisory professional. That is sad – a poor commentary and a great opportunity.

In the USA also the advisory business is ageing. The average age of an adviser is 51, while the investor is in his 20s or 30s. Many of the older IFA (call him by any name, the Christian name is agent) will not be able to make the inter generational transfer from being an IFA of the parent to being the IFA of the children. The regulator is not helping by his ambivalent statements and that too at frequent intervals.

The path is clear – the IFA will have to take the advisory route aka RIA route. The regulator, his cronies and our media will root for the RIA, and that will help. So if you are a RIA good for you, and if you are not, you will be forced to become one, or ask somebody in the family to become one. Transition the business to them and rest assured that regulatory clarity is a myth.

The wealth waiting with the older IFA is huge and crying for a younger, fresher, well educated adviser. Too many advisers are there by chance and not doing much to enhance their business. It offers a good opportunity for the smaller, younger, tech savvy IFA to partner with the senior IFA. Life is far beyond technology – many of the younger people too likely to meet, talk, etc. and then invest online. Yes, we can see the end of the paper era – remember the brokerage industry went digital in 1993 – a full 25 years ago. What if Sebi bans the paper format – the biggest cause of headache?

Successful transitioning of the wealth advisory practice is not easy. Not all advisers are treated with respect in the house of the investor. The customer experience of the millennial could be very different from the parent. I see men and women in their 60s struggle unsuccessfully getting their children from getting involved in the wealth process. The IFA can do seminars on ‘handing over the baton’ for both the parents and the children.

Making the transition is not easy for the adviser too. Parents may have been in the ‘saving’ mode, and the children could be in the spending mode. I know one family with a monthly expense of Rs. 200,000 now suddenly spending Rs. 1 million a year on vacations – 2 sons with wives, and the patriach and his wife (no babies as of now). The parent suddenly discovered the joys of taking vacations – egged on by the daughter in law! Such transitions are stunning and the IFA had to suddenly deal with withdrawals in an account where he had ONLY invested!!

Each client is different – I met one retired CEO who has earmarked is wealth for his grandchildren’s education – Rs. 2 crores for each of his 5 grandchildren. It will be spent ONLY on their education or skill development, or the money goes to charity! I have met a promoter who is giving each kid Rs. 2 crore – and a substantial part for charity.

Communication helps – some people who want to be philanthropic do not have enough money for themselves!

The professional bodies, the regulator, etc themselves need to understand what the new IFA needs.