Financial Advisory - Inside-out of The Profession

Date:   Tuesday , January 31, 2017

Headquartered in Bengaluru, Sinhasi Consultants is a personalized investment advisory firm offering end-to-end financial advisory, planning and distribution services to both businesses and end users.

Financial Planning and Investment Advisory is actually a life-long profession. It is not an easy profession to choose though. One needs to embrace integrity, truthfulness, best industry practices, and continuous improvement in the field of learning and execution to be successful in this field. If one builds a level of competence in truly understanding the customer and gives objective advice, then can one make this a respected profession for a lifetime.

There is a view that technology and robo-advisory will replace the traditional financial advisors/ and planners. No doubt that technology is going to play a very important role in the Personal Finance Industry. It is surely going to expand the market, removing many of the barriers this industry faces today. The Traditional model does have its limitations and not all can get advice from financial planners as it might cost them more than what they want to spend for advice. The Robo-advisory model is best suited for beginners who have just started their savings and have a good hand on Online Do-it-Yourself products. Again, for smaller portfolios, robo-advisory is a boon, and one can easily manage his own portfolio paying minimal management costs. But once your portfolio expands and grows in size, an expert guide or financial advisor is needed to manage your portfolio and help you achieve your life goals.

One of the most important things for a good financial planner and advisor is to understand the emotional intelligence and connection that a client has with his money as well as his life goals. If you land up asking a working professional, what will he prefer - spending quality time with his children, family, loved ones or going of amazing vacations or an expensive gift or money? Barring a few, most of us will choose spending happy times with the family or going on a fun vacation. And so it is important for an advisor to understand the human element in Financial Planning. Because,without that human element, financial advisory is incomplete. And money is related to all the phases of human life, be it birth, education, job, or retirement, having vacations, spending time with family, - nothing is complete without money. And, financial advisors manage how this money is put to work and used by the client. So it directly means that your client trusts you with one of the most important elements which constitutes his life. Therefore, a financial planner is indirectly playing a much bigger role in client\'s life - that of a mentor, a listener, a supporter, a guide a trusted friend and in all the aspects of Client\'s life.

Today, Security Exchange Board of India (SEBI) has made many rules and regulations in the financial advisory segment for advice to be given without any vested interests of the advisor and to protect the interests of the investor. So, you should always choose an advisor who is a SEBI Registered Investment Advisor (RIA).

Experience has taught me that a person will prefer to not only get his financial planning made by an Investment Advisor or company but would also like to get his financial plan executed and monitored from the very same person or company. He wants planning, execution and monitoring from the same entity because he wants to see his planned goals delivered at the required stages of his life. And all this is possible only if your advisor has that advisory and service competence to handle your wealth in an appropriate manner. If your financial planner doesn\'t keep a tab on your changing lifestyle or changing goals, then you might face trouble in achieving those goals as and when that stage comes. This again emphasises the importance of hiring a SEBI RIA.

Another important aspect of financial planning is to deliver objective advice which is in best interests of the client and is void of any bias. The Financial advisory business is all about building long term relationships. Once you have proven your trustworthiness to your clients, your business will flourish with the referrals you get. Hence, constantly proving your worth and trust with your clients with a personal touch will play a very important role in your growth.

On a lighter note, many do equate the financial advisory profession to that of Doctor. Once a Client who is a Doctor brought it to my notice that ours is a similar profession. But I said, yes I partially do agree but I must differ on a few points.

  • When a financial advisor advices his clients, the client is also engaged and has his/her own views and intelligence on the subject which must also be considered. But if a Doctor prescribes a medicine to the same client, he will take it without any questions asked!

  • When a Doctor is operating on a patient who requires surgical intervention for cure, the patient has been given anaesthesia and is in no position to be alert. But during critical times if a portfolio requires some drastic measures of action, there is no way a financial advisor can administer anaesthesia to his client and take the appropriate action in the best interest of the client!

  • And lastly, before any surgery, Doctors gets signatures from patients or his family members stating that if something happens during the procedure, even death, the Doctor cannot be held responsible. This is surely not the case with a financial planner!