Zee Business Money Guru 6.1.14,Prakash Ranjan Sinha, Director, Nurture I...

Zee Business Money Guru 23.12.13 , Prakash Ranjan Sinha Director, Nurt...

Management Consultancy for Reshaping Investment Advisory business

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. 

Nurture India Consultants : Learn to grow in career

Nurture India Consultants : Learn to grow in career: Most of the professionals want to grow themselves as CEO and Chairman of any company . Few succeed and many don’t. Is a chance or some mec...

Learn to grow in career

Most of the professionals want to grow themselves as CEO and Chairman of any company . Few succeed and many don’t. Is a chance or some mechanism to be followed? All of us have strengths and weaknesses. Weaknesses are meant to be reduced to the minimum and strengths need to be grown in proportion. Identifying one’s strengths and weaknesses is part of introspection and comes naturally.  Countering your weakness is relatively easier as once identified, a weakness can be consciously mitigated. What needs special attentions is your strength. Working on and nurturing your strength is a difficult task. Many can argue, well I am already good at this aspect what more I need to do ? Here lies the challenge of higher growth and those who learn this trick, move up the ladder quickly compared to those who don’t stop and learn. You never be complacent about your strengths as there is no end to perfection. Working consistently on your strengths and mastering it to your advantage is the key for success. There is always scope for growth or refinement in your existing strengths.

The best approach for growth could be combining strengths and creating a mega strength which could be better than the sum of the individual strengths. It also implies that you need to synergize strength for better results. Let’s take example of Rahul Dravid , a perfect batsman with sound playing techniques and with a very cool head and strong concentration . Result – Bowlers found hard to get through his gate for most part of his career. The three strength he had when combined together made him almost invincible.

 Each should be his/her own CEO.  You drive your inner passion for growth through a self check mirror in yourself. Two benefits of being a CEO of yourself:  One you observe , understand and learn what CEO is and does. So you slowly start not only imagining yourself as one but also instilling that in yourself. You start correcting yourself, disciplining yourself and that is where you start working on your strength effectively.

Coming back again on pairing and combining of strength for mega strength, it is also important to note which strengths are positively correlated and which are negatively correlated. Positively correlated ones are those whose effect may give result in same direction i.e. complementary ones whereas negative correlation ones are those whose effect might act against each other and in fact can nullify or reduce overall impact.

Now how to do that. List down competencies you have. Also what are the competencies one need to have in order to build effectiveness in organisation. See which ones are complementary and which are the ones we find in great leaders . For example , think of a combo of knowledge + assertiveness + communication . How effective an individual becomes as a leader.

Well certain competencies or strength needs to be build upon if missing. It requires some hard work, some discipline and some determination but definitely possible . Time is your side but the earliest you have that in your armoury the better positioned you are . Always build on that strength which is valued by all.

Please always remember positions in organisations are virtue due to experience , expertise , contribution , qualification , and sometimes luck but competencies is something which is your own and it does not need approval of any senior to have in your arsenal. The earliest you acquire, refine, strengthen and combine the better you become both on professional and even personal front.

Also who knows in years ahead most organisation may move on 360 degree performance evaluation where at every stage your growth path may be subject to good evaluation by many of peers , subordinate as well i.e. you evaluated on different perspective so the more competencies and strength you build and exercise it will appeal to most. Some of the qualities most will value is you seen as positive influence, you nurturing to individual growth and effectively resulting organisational growth, Your collaborative approach for a higher result adds more value for all.

So now don’t lose time start working toward your goal. 

Zee Business Money Guru 29.7.13 Prakash Ranjan Sinha, Director, Nurture India Consultants Pvt Ltd

What an Investor should be doing in Present Market Situation

What an Investor should be doing in Present Market Situation

We are seeing a situation where rupee just becoming weaker and weaker vis a vis dollar, stock market which was moving northward some day back now going south ward , GDP growth has been also showing downward trend last some quarters , interest rate movement depending on lots of economic factors dominant one being inflation etc . If anyone asks me what do I foresee from here in terms of investment and return I am at sea to reply to this . It is not because of real economic and financial factors but things that are influencing these factors are not clear and more of confusion . If some expert giving a sure shot reply it is either coming from his optimism or pessimism or but is it from fair analysis of facts ? .

Being an investment advisor I feel my responsibility is more toward guiding investors on investment front with sincere intent. Firstly I  believe before advising any client the advisor should ask or judge himself – does he know everything to guide his clients about investment properly . Do we know what will be next move of Govt or corporate decision makers ?  Do we know what will be the thinking of FIIs today in terms of their investment in India or else where ? Do we really know what policies of Govt will see its light or get implemented and by when ? . To most answer is not clear .

Well the realty is most of us just read or gather information from secondary sources i.e TV, Newspaper , websites , research report and form an opinion . Is the information moving in cyclical way amongst these sources and so one influencing the other or there is really primary sources of information. Very difficult to comment on this . My take on this is today most of these secondary information are short lived and following day to day news and views . The news and views to a large extent are not fundamental to the assets where investment goes but more with perception of different stakeholders in the financial world on various non economic , non financial factors more than  economic , financial factors and that is what leading to more confusion than clarity about road ahead .

Globally also when most economies are facing some or the other problems in their own backyard the various permutation and combination of decision making also is more non clear than clear . So that’s why my first query to any expert is how much they know or how much they are sure about how different financial and investment assets will perform so as to give correct investment advice to the clients .

I feel when so much of uncertainty , non clarity then the best thing is to play safe first . When I am saying safe I mean protect from downside return in short to mid time span  . Lets look all assets today . Gold seems riskiest in short term so should be avoided . The only way I feel Gold should be apart of someone portfolio is one from future family need aspect i.e for marriage in family . Else can be just 5% of overall investment portfolio more to act as hedge against uncertainties , inflation. But at this point of time fresh investment decision in Gold can be withheld for some time at least .

Real Estate is still appreciating but again in what form , land or constructed one . Land is limited so will always grow in value but location is very important and risk from getting grabbed by antisocial elements do carry headache . Flat or house is good option but one has to look at volume of money required and again go for location where there is cent percent more scope of growth in value.

Coming to debt and equity there is no doubt that debt was and is safer bet in short term . Equity seems very risky in short term. One can dabble in stock market and can still make money if luck is on his side but definitely not seems the case as far as equity mutual fund is concerned in short term . One has seen by experience that when short term return is very shaky and risky , confidence does not come for long term return even when fundamentals of the corporate are good . Looking at the scenario today can we say that fundamentals of corporate are looking good today . An optimist will say yes and in fact that is what should be but in reality is it really so ? What decides about fundamentals – management , consumer , competition , economy , performance etc . Is the confidence level of all very high ? . Ideally Equity is the best bet in long term and I firmly belief that it is even looking at present dampening situation today . But if I have to advise anyone on equity mf I will tell to be cautious in selecting here also . Most important is conviction about this asset and firm determination to stay invested in this asset for long . Interest in equity comes from the assessment of future earning from the business and if there is element of unpredictability in earning of corporate in short term there creates interest or lack of interest in equity . One major problem the equity mutual fund is facing is that since huge money came in short span of time when the market shot from 15000 level to 21000 level ( sensex ) , every rise in market level is now taken more to recover the losses existing in the portfolio last 4-5 years and so with more units exiting at higher level and net sales being negative , when market goes down due to FIIs action / inaction or due to some other issues the NAV goes down and starts looking unattractive and not the case of bouncing back . It is a situation where an investor the moment he starts observing upward movement in market levels and just under some serious introspection there comes the fall and the confidence which was just starting to build up breaks even more fiercely than the fragile built up .

So the moot point for investment in risky asset ( equity mf ) is conviction of investor about the asset performance , conviction that corporate are seriously involved in growing their business and  government is serious about creating positive investment climate . If devoid of any such conviction inflow in equity asset will be short lived and opportunistic only .

If conviction exists the investor should focus on those stocks or companies who have done well in all market condition and have long term investment horizon ( at least 3 to 5 years ) . Funds dominated by large cap in FMCG, Pharma looks attractive and so do new sectors like educations . But most important is the fund manager track record and his ability to withstand well in downward market trend .  One last advice to investor , don’t believe blindly on secondary source of information , do some study and fair analysis yourself also and then take investment judgment , after all its your hard earned money .