There is a huge advantage of being a blogger – I have been talking to a lot of people. Relationship Managers, CIO, CEO, FM, Pharma analysts, Equity analysts, Investors and of course IFA, and Trainers in the MF industry.

There is of course no great consensus about what will happen, but some are very bullish and some are not so bullish, and some are surely pessimisstic. At various stages of life it is necessary to take stock of what is happening. I can tell you only one thing with confidence. I have no clue what will happen.

However, one thing is certain. The Investor also does not know what is happening. He is guessing as much as you are. It is a good time to pick up the phone and talk to them.

What should the IFA talk to the client?

1. Tell him to stay inside – rather ask him how is the LockDown being implemented in his part of the town/ city
2. Ask him/her about their jobs, and guage from their voice how they are feeling about the situation.
3. If you are close to the client push and ask for cash flow visibility.
4. If you think he has a cash flow issue offer him liquidity – the classic endowment plan is the best place to take money from (least damaging), low cost, and there is no need to repay – it will be adjusted against the maturity amount.
5. Tell him how his liquid fund, ultra short bond fund, and other debt funds are the next best source of liquidity.
6. Almost all my friends, readers, cousins would have these funds and so it should not come to you as a surprise.
7. Tell him about the importance of paying the Term insurance and Medical insurance premium. If you (or your clients are) about 58 years of age it is a good time to be ramping up the medical insurance – check for adequacy before you pay the premium.
8. Remember the Relationship Manager of the fund house gets a salary from the fund house. He will not tell you what is best for your client. He will be mum about the liquidity crisis in his short term income fund and ultra short bond fund. If in doubt shift to liquid fund. AT least partially.
9. Fund managers also lie – they will keep telling you about long term, time in the market vs timing the market etc. Be careful.
10. If you do not understand risk, subscribe to some good research service which will give you some advance notice about the crisis in a debt fund – I mean forthcoming crisis.
11. Be careful about labels. There is one ultra short bond fund which looks good ONLY if you have a 5 year view, not a 5 month view even though the RM will tell you that. Learn to learn. Sorry, no short cuts are available.
12. Work really hard. Lets say you have 250 sip of Rs. 5000 each (average). This means you are doing Rs. 12,50,000 per month. Rest assured about 50 of them will find an excuse to pause, or stop the SIP.
13. You need to get off your butt and go and get another 250 sip of Rs. 10,000 each. This will ensure that you maintain your SIP book size, increase the average output, and increase your AUM.
14. For clients who want to STOP the sip offer them better options – reducing the amount – or taking a holiday for 3 months. Both are better than stoppage.
15. Remind people why did they do a sip – it was meant to average during bad times. Like Swarup Mohanty of Mirae says “other than cash flow issues there is no logic for stopping the SIP”. So true.
16. There is no substitute for talking to clients and potential clients. One day the Lockdown will be removed – go and double your SIP book. In fact increase it 5x – this will take care of the people who are leaving and you can’t stop.

All the best. We shall overcome. We will all live to see the vaccine at work and defeat of the virus. God bless.