Source/Contribution by : NJ Publications
Every business has it's own set of core elements necessary to be successful. It is no different for a financial advisory practice. A study of all successful practices highlights few very common things that we believe are imperative for success in the business. In this piece, we highlight the six imperatives for success from the perspective of an IFA.
1.Skills & Education
The financial advisory profession is very closely linked to the IFA's skills and expertise on subjects associated with wealth management. It is a profession where the we need to keep learning and enhancing your knowledge & information. Beyond learning, we also would need to sharpen and improve our skills at preparing plans and presenting our ideas to the customers.
To stay relevant and meaningful to the customers, we will need to invest into technology, products and services again for which our knowledge and expertise will be at test. Running a successful practice as a financial advisor is challenging and it involves having the requisite skills, knowledge related to the below mentioned areas.
- Preparing financial plans and projections
- Asset classes, products & services
- Markets and its' developments
- Operational Processes
- Client desks /reports & Business MIS
- Established rules and regulations
- Managing compliances and books of accounts
- Skills in planning and managing practice
Being weak on any of these areas can hamper prospects for growth for us.
2.Beliefs
We are what we believe. Our beliefs are not to be considered as ordinary as they drive our actions and shape our philosophy and our approach to our business. It will be a win-win situation if we can identify our core beliefs and work at transferring those beliefs into values and actions in our professional lives. For example, if you believe in equities for long term wealth creation, you can do very well to share this with your clients. Understanding our core beliefs can help us greatly in shaping our business and planning for future...
Unfortunately, we do not often know our beliefs on things which are intangible to business. These beliefs can be unveiled when we ask ourselves questions like...
- What is that I good at and feel happy at doing?
- What is the true measure of my success?
- How best can I serve my clients?
- How important are knowledge & skills for me?
- How can I best grow my business?
- How committed am I to my business?
To be successful advisors, we need to have a strong set of beliefs that are positive for our business. As an advisor, we must give highest value to improving and safeguarding our client's interests. Our focus should only be on our business and as wealth management professionals, we must believe that the highest and best use of your professional knowledge and services is to improve and better the client's life. Without having these basic beliefs, it will be hard to succeed.
3.Relationships
Relationships are our most prized assets. And in order to grow as wealth managers, we must all nurture these assets. Over time, relationships which are nurtured rightly, will give birth to trust. And with trust, the relationship has the potential to grow much beyond the initial engagements.
Nurturing a relationship is an art; you can create a picture with many different strokes and colours by...
- Knowing: Knowing the customer's financial & non-financial aspect important for your advisory role.
- Respecting: Respecting the client for his beliefs, objectives in life and the mandate he has for you.
- Caring: Being truly caring for the client's concerns and managing his priorities in his best interests.
- Communicating: Keeping the communication channels healthy, substantive, informal, regular and open.
- Connecting: Connecting at a personal level and exploring client's real objectives, concerns and motivations.
- Collaborating: Adopting a two-way approach to preparing solutions and executing plans with client's active involvement.
- Facilitating: Working effectively towards facilitating achievement of client's needs/objectives/goals as expected.
- Delighting: Making clients feel satisfied and delighted with the association with you.
4.Products & Services
No business can sustain itself unless it has the right set of products and services for the segment of clients that it intends to serve. Being in the evolving financial services industry, it is also imperative for the advisor to have the right mix of product and service basket to meet the wealth management needs of the evolving clients becoming more aware and demanding. In a fast paced era where loyalties can be easily switched, the advisor needs to offer one stop solution to his client's needs.
The following are the reasons why having the right products & services is essential for any advisor
Client oriented
- Single window for meeting all /most of the client's needs
- Holistic review and planning for client's financial needs
- Consolidation of transactions and portfolio for clients
- Ease and efficiency in administration /operations
IFA oriented
- Attracting new clients for products/services not offered by other advisors
- Demotivating clients from moving /shifting to other service providers
- Increased share of wallet and client profitability by cross-selling & up-selling opportunities
5.Technology
Technology, systems and processes have today taken center-stage in almost every business. Traditional businesses and market places are also being shaken up by disruptive technologies. In financial advisory business as well, the there is growing trend for automation of client related processes, technology enabled transactions and communications.
For any IFA to grow the business, it is imperative today that he seeks maximum usage of technology and systems in activities that do not require his/her core knowledge or expertise. The IFA should ideally only focus on the role of client acquisition, advising, managing relationships and leadership. Further, it is also only logical that the technology be outsourced as the time, expertise, efforts and costs for developing these solutions by the IFA cannot be justified for the business he manages.
Applications of technology /systems in advisory business
- Business monitoring and MIS
- Transaction processing
- Consolidating client reports
- Communications & alerts
- Customer relationship management
- Financial planning & advisory tools
- Client Servicing
- Query and complaint management
- Marketing & sales promotions
6.Leadership
Perhaps no element is more critical and imperative for growth of your firm than skilled and effective leadership. The journey from a local area practice to a great business cannot be undertaken unless we have the leadership skills to do so. Leadership is much beyond just writing a designation against your name in a visiting card. Leadership is a role, a responsibility that encompasses all the following...
- Having the clear, collective and shared vision for future
- Recognizing talents and sharing responsibilities with others
- Setting realistic but bigger goals and guiding progress
- Setting processes and establishing service standards
- Taking ownership and leading change
- Creating the 'right' culture and ethics in the firm
- Establishing relationships and nurturing networks
Conclusion:
Establishing and growing a business is not easy in a competitive environment for IFAs. However, the market and the opportunities for growth are immense. There is clearly a gap in the market and it is upto the IFAs to equip themselves and grab the opportunity present. The six imperatives for success are like a check-list for those advisors who have a vision to expand their scale and capabilities and for whom the success is placed at a much higher pedestal. At NJ, we have tangible answer to few of these imperatives like product & services, technology and skills /education to some extent. However, for the imperatives of Beliefs, Relationships and Leadership, the NJ Partner has to outgrow himself. The stage is set for you, and now it is upto you to set up the play and deliver your blockbuster show. All the best.
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