The caption might sound strange
to some . What is the need to Management Consultancy Services for reshaping
Investment Advisory / Financial Planning Services . One might feel I am already
doing my business , have good nos of clients , able to generate good revenue so
who can advise me or what new some one can advise me regarding my business
. This is similar to the client feeling
or saying why i can not not manage my own investment ? Why I require an
Investment Advisor . So when your client says this what is your response ? Now
put all those in the above question – Do I require Management Consultancy for
my Investment Advisory Business ?
There are always two ways to
evaluate any thing – one from heart and other from mind . Both evaluation will
never give you the same inference. One is more logical, practical and the other
is embedded with sentiment . If we know
how to pick the best of the two or fine balance between the two then fine but
in reality its not . We are governed more by sentiment than logic .
We have seen the reaction of many
distributors , Independent Financial Advisors after SEBI brought so many
regulatory changes . Most became disheartened , many confused , many left the
business but few looked it positively ,accepted and started working to change
their business model. Theses nos is in fact fraction of the whole lot .
Lets look what will happen if I
do not reshape my business model . Direct plan , online purchase , online
advise all these will slowly make the advisor redundant if he continues his old
way of managing business . Times flies fast and client of 25 years a decade
back is 35 years now and now every year we will have more new age clients (
tech savvy ) will enter and oldies will grow more older . Investor of yesteryears may be moving from
equity or balanced to balanced and debt whereas new , young age investor should
ideally go for equity as time is in his side . Again the risk profile of today
new entrant in investment may be different from those who are much senior to
his age .
For an advisor now apart from
adjusting to new regulatory situation he also has to adjust to new mindset of new
investors as well as the changed expectation of the existing ones . In the same family a new age investor might
have some influencing factor as far as decision making of his father or elders
in family . Gone are the days when young were told and they followed , now we
live in a family where views of all age is equally respected .
Advisors now need to understand
the changing decision making process in family and in society . If consumption
pattern changes , life style , living habits getting changes so one can expect change
in attitude toward money management .
With newer and newer technology
coming , social media marketing catching attention communication pattern is
also changing . With time being a constraint now more interaction between
friends , professional happening in informal atmosphere also be it gym, jogging
park or in get together . People might be short of time of read and learn from
distributors communication but quick, short and focussed pitch will also catch
attention .
The clients today need Wealth
Creation and preservation of growth of that wealth . There is no product
loyalty so assuming some one will stay lifelong will only work when either the
client sees value in terms of return or long term benefit is rightly
communicated .
Further the investment world
itself has become very dynamic now , new businesses are emerging , capitals
finding their ways for more profitable opportunities , stock market becoming
more vibrant and influenced by international factors , multiple source of
information are available so very difficult to predict thought process of an
investor will remain static as was earlier . Changes needs to be understood
quickly , analysed and timely corrective actions if need felt .
So if one looks there are so many
drivers of investment advisory business which are changing and expected more to
change e.g – technology , midset , economy , influencing medium and environment
, life style , thinking pattern etc you can not have a static business model .
Though the basic fabric may remain same, value driven , principle based but
there has to be tactical moves , strategic shift in sales approach, marketing
style, communication pattern so that one does not falter or remains behind in
competition . All this is possible if either the Investment Advisor spends time
and resources to stay in game or be dependent of a management consultants who
not only foresee changes but interprets it correctly and advise the investment
what strategic moves to make .
One reason an external consultant
is better because as said in the beginning we are governed more by emotions in
our decision making and in this dynamic industry , decisions can be taken or
change is accepted more by logic and less by emotion and if thats the case
better to take guidance and advise from some one who is not attached emotionally
but professionally with your business.
