‘Subra I have this financial plan from a planner..will you read it and tell me whether it is fine?’ asked one person. He was my friend’s brother in law.

I said sure. He said it is 75 pages. I said send me the summary in 3 pages. Poor chap he had no clue how.

With the growth of this new ‘profession’ called financial planning, the exercise is becoming far more complex, big, expensive and perhaps difficult to understand. This is of course true of all professions, but this profession is surely headed that way. The persons doing financial planning (if really independent) are likely to suggest a calm solution. However if they abdicate their responsibility of execution, the client gets into the jaws of a big brokerage firm / bank / etc. and then it is a holy mess..

Do clients really need (forget want, they want no gyaan, just 23% roi year on year for 200 years) a complicated plan? do they feel good that they have a 73 page document with tables, assumptions, etc. I am not blaming the IFA for making his plan comprehensive, my question is does such a big plan serve any specific purpose?

What does a client really want? Well in most cases, they do not know what they want. This translates to ‘can I have a statement every month – my bank sends me one’. Now an IFA can solve this problem very easily by sending one every month. However that will lead to ‘I cannot understand what is this per unit value – why does it change’ or some shit like that. So the good IFA should ask ‘I will send you the statement, but what do you want to do with that’. That will normally be met with a stony silence or ‘it is my statement why are you asking’ kind of a look. Some of them will say ‘oh to monitor my funds’. The next question is ‘what action are you planning to take’.

That brings us to the most important lesson: “You need info only as often as you review your portfolio. So if that is every 6 months, you need a statement every 6 months.”

The impact on a client is directly proportional to the impact that you have on the client’s life style. If you can convince a client about the PURPOSE of an investment, he is less likely to ask for some vague input and vague analysis of A fund vs B fund.

You need to convince the client that you are good at your profession, you are passionate about it, you are updated (everybody claims that, remember), you love your profession, people turn to YOU when they are in doubt (leadership behavior), you concentrate on making their life better / simpler / more organised / more efficient. People will hate PAYING for advise on which product to buy. However, they will happily pay for a better quality of life. So if you can take away their anxieties about their retirement, children’s education, a bigger house – by being realistic about what can be done or not done – they will pay you fees.

If you can involve his spouse, children, etc. in their family goals and efforts…good chance that he will pay willingly.