My advice to the “Investment advisors”

In all my earlier blogs, I might have sounded like an anti-insurance or anti-agent person. But trust me friends, I fully respect the fact that the “investment agents” or “investment advisors” are as much the citizens of this country and have the right to earn to their potential.

What I am against is the “mis-selling” which is detrimental to the financial industry as a whole. If I say that the investment advisors have a right to earn their bread, I would also say that they have no right to do it by cheating the investor or selling him a product not suiting to his demand.

So what should the advisors be doing then ? My article below might prove to be of some use to you for how you can continue doing a sustainable business without compromising on ethics.

Talking about first things first, the biggest problem is the mindset of both viz., the Indian Investors and the agents. The investors are not happy paying “Fees” and the reason for the same is the “hidden commission” model being followed in this country since decades. The mindset of the investors has become such that they don’t like the agent charging them fees. On the contrary, they feel it to be their right to claim a rebate from the agent (even if he sells him a wrong product). The financial industry could grow only with the change in this mindset of the investors.

This does not mean that the advisors fraternity is totally innocent. They themselves are largely responsible for this repulsive mindset of the investors. Attracting investors through rebates, selling them wrong products for own interests are some serious mistakes done by the “Agents” or “Advisors”.

Lets all act sensible and only then the financial markets can grow as a whole. Below are a few points you may follow to grow your business:

1. Be your client’s man

If you expect the clients to pay you a “Fees” for the services provided by you, first and foremost, become a client’s man. Understand his needs, and then provide him advice and services accordingly. Do not advise a client for a product just because it fetches you fat commissions. Also, do not stop or misguide him for a product which is in his interest but does gives you no commissions / low commissions. In simple words, change your mindset to “Client’s interest first”.

2. Stop being a Product Salesperson

I have observed that many advisors, when they are on their way to the client’s place, have already decided on which product they want to “Sell” to the client. Eventually, what happens is, if the client needs are different or the client asks about some other product, they do not have an answer. And thus, they start convincing the client that the product they are suggesting is the best for him. This is not any different than being a salesperson instead of being an advisor.

Rather, have a detailed study of all the products and suggest him what suits him the best.

3. Stop Being too Pushy

The key word here is “too”. My advisor friends would argue saying that if we are not pushy then how will we get business.

My dear friends, fair deals would happen only if there is a need at both the ends. Taking an example, a shepherd feeds the cow so that he can milk it later, but the cow eats because it is hungry and not because it should be able to give milk to the shepherd. Similarly, you reach out to the clients for your business, but the client would invest only when he would have a investible surplus and he thinks you are giving him the right advise. In some cases, he would also like to take a second opinion. So by being too pushy, many a times, you might annoy the client so much that you lose the business from him altogether. (I know these techniques might have work all these years in the month of March, but if you go back and ask those clients, they are still cursing their agents for selling them a wrong product).

4. Provide Periodic updates

It is always a good idea to provide periodic updates to the clients about the current status of his investments. But for doing this, you will have to follow the above three points very very religiously. Coz if you have sold him a product like ULIP, wherein even if you provide him periodic updates, all that he can see is a erosion of his capital (in spite of the markets doing well). In such case, you are more likely to get a closed door on your nose, rather than more business.

Whereas, if you have advised him a right plan with right products, you can confidently approach him with the updates saying, “Sir, we had invested X amount, and in an year’s time it has grown by Y% (whatever the return be)”. The client will not only be happy hearing this, he might also ask about the next opportunities for investment

5. Educate the Clients

Many advisors feel that educating clients about the investments could prove detrimental to their business. But this would happen if you are not working towards enhancing your own knowledge. The idea is to keep enhancing your own knowledge and also educate the investor about recent happenings in the economy and the changes that needs to be taken in his investments. The biggest benefit of this is

a] He will not have unrealistic return expectations from his investments

b] He will be patient in case of markets moving otherwise.

If you do not educate him, the client might get an impression that you have cheated him and you will lose his trust.

6. Respect the knowledge of the clients

There are investors who believe in doing their own research, in addition to the one done by the advisors. There are some who are tech-savvy and believe that they have sufficient time and expertise to pick up the right investment for themselves. Advisors need to have due respect for the same and not expect every investor to give them some business. The good news for the advisors is, there is still a huge population which does not have the time or expertise or both for doing investments on their own. The advisors can cater to this huge market instead of blaming the small chunk who want to do it themselves.

Trust me friends, if you start following these steps and start acting in client’s interest, your clients will automatically develop trust in you and will not mind paying you a fees. Expecting them to pay you a fees merely for filling up, pick-up and submission of forms is definitely not rational (my personal opinion).

I welcome your feedback and comments on the above article. Please feel free to contact on if you have any questions.

(The views mentioned in the article are personal opinion of the author. The readers are advised to use their own judgement and consult their investment advisor before making any investment decisions.)







Published by professorbajaj

Prof. Saurabh Bajaj is an Author, Mentor, Motivational Speaker and Wealth Planner. He has done his MBA from Narsee Monjee Institute of Management Studies (NMIMS) Mumbai, one of the top 10 management institutes in India. He holds the prestigious FRM (Financial Risk Manager) degree awarded by Global Association of Risk Professionals (GARP), USA. Till date, there are less than 15,000 professionals in the world, who have been honored with this degree. He has also been awarded CFGP (Chartered Financial Goal Planner) Certification by AAFM (American Academy of Financial Management). After his MBA, he joined J P Morgan, the second largest Investment Bank in the world. He has worked with J P Morgan as Risk Analyst for more than two years. Prof. Bajaj also holds an Advisory certification awarded by AMFI (Association of Mutual Funds of India). During his stint at Bombay Stock Exchange, he has handled Investment Management and Treasury operations of the BSE Corpus. He has set up an entrepreneurship venture in the field of Wealth Planning and Investment Consulting under the name “Nidhi Investments” and holds the profile of CEO. Prof. Bajaj sits on the Expert Panel of and as Investment Expert. He is actively involved in investor education through his blog which has a readership from 78 Countries all over the world. His articles are also regularly published in , , ,, and . He has been awarded the title of “Best Article Writer” from in Jan 2012 and has been selected amongst “Top 5 Technical Writers” from all over India in Feb 2013. He has been invited by various TV Channels like SPIN TV, CNBC TV18, UTV Bloomberg Etc for programs like "Expert Advice" , "What Markets Want ", "Budget Analysis" etc. He has been invited by Several organisations like Lions Club, Rotary Club, Agrawal Welfare Foundation, Rajasthan Mandal, Agroha Vikas Trust, Union MF, UTI MF, Arthamitra Gurukulam, Vidyalankar Institute of Technology etc for expert lecture on "Smart Investing", "Life is A Celebration", "Financial Freedom", "The Digital IFA" etc. He was ranked 8th Merit at All India level NMAT which got him selected for MBA programme at NMIMS, Mumbai. He did his MBA with Capital Markets as his specialisation. Soft Skills has become an inevitable part of every selection process and teaching learning process these days. The students from small towns and tier II cities, in spite of being talented and well equipped with technical skills, are seen struggling in the selection process. This is because of their lack of exposure to these soft skills. Mr. Bajaj has a zeal for training candidates to develop these skills and has been imparting the same on since last two years. This zeal and passion inspired him to set up his own firm called “Knowledge Circle” which aims to train candidates for soft skills. Till date, he has trained more than 5000 participants from over 220 organizations across various fields of soft skills. He has been associated with MSBTE (Maharashtra State Board of Technical Education) to conduct Soft skills training workshop for the faculties of Polytechnic Colleges in Entire Maharashtra (Mumbai Region, Pune Region, Aurangabad Region and Nagpur Region) since last 8 years. He has also been associated with ICAI (Institute of Chartered Accountants of India) for training CA Students on various topics related to Communications skills, Group Discussions etc. He was invited by Fr. Agnel Polytechnic College, Vashi for a motivational workshop for faculties. He was also invited by Vivekanad Polytechnic College for "Communication Skills and Email Etiquette" training for non-teaching staff. Apart from these, he has conducted “Capacity Building Soft Skills workshop for Faculties” at ITI Gunj, ITI Pusad, ITI Digras and ITI Umarkhed. This was the first ever soft skills workshop for faculties in the history of ITI’s in Vidarbha. He was also invited by Shivaji Education Society to conduct similar Soft skills workshops for the faculties and office staff of Shivaji Junior College Pusad, Shivaji High School Pusad, Shivaji Vidyalaya Belora and Shivaji Vidyalaya Bhojla. He has conducted training workshop on “Effective Presentation Skills” for the relationship managers of HDFC Mutual Fund, Andheri Branch, Mumbai. He has also been invited at College of Management and Computer Science, Yavatmal, College of Dairy Technology, Warud, B N College of Engineering, Pusad, B D College of Engineering, Wardha, College of Engineering and Technology, Akola, Dr.N.P.Hirani Institute of Polytechnic, Pusad etc. for the Guest lecture on “Developing Interview Skills”.

5 thoughts on “My advice to the “Investment advisors”

  1. Aha at last some one pointing out to agents where they are going wrong. I cursed my Agent for 4 years of my ULIP. Even good advior sometime try to sell high comission product to you as he don’t have much hope to get FEEs from investor.
    True that inverstors also need to understand that you need to pay for the services of Agents appropriately. In days of entry load, one of my friend used adivce from a good advisor and then went ahead with direct investment. Thats not fair to agent. If you think your agent is fair, giving you good adivce and you are getting benefited pay them appropriately.

    Thanks Prof Bajaj for another nice article.

  2. can u guide me where and how i can invest in share market/mf/ulip/small investments/long investments as i m making my mind to go for share market for very first time, i m a beginner but from whr to start would u plz guid me prof bajaj, get ur blog from mag

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