When Indians think about investing, Mutual funds will never come into the investor's mind. The evident choices will be FD, PPF, even LIC, or if the budget is high, Real Estate. It is because we are brought up in a traditional investment vicinity, this is what we have been seeing our parents doing ever since, and we are following suit. Fixed Income Investments are so deeply rooted in an Indian Investor's blood that it can be indeed difficult for the advisor to be able to even talk to a fixed income investor about Mutual Funds. Although, an increasing number of investors are game for exploring the modern methods of investing, yet the category of traditional investors occupy the lion's share of total Indian investors. And concentrating on the modern ones only, means leaving a big business opportunity behind. So, what do we do? How do we target the skeptical ones?

The most crucial step is to convince such investors for a meeting. You must remember that you don't have to get too aggressive or too conservative. You don't have to talk about the investment products with the client right away, since the viewers under question are the suspicious ones. So, you may try to strike the chord with a line like “you know there are so many investment options, which can generate good returns, plus your investment will be safe”. So if he asks you about the options, you can ask him “Let's meet, and we'll discuss”. If in case the first line doesn't work, then you may say something like “Let's meet once, even if you don't want to invest, it'll be nice to have you over a cup of coffee”. Even if the client looks totally disinterested, then too a cup of coffee is worth the try. And once you get the meeting, it's your sales skills that will do the job.

When you get the opportunity to see that client, make sure you have done your homework and researched about the client's background. Do not rush into things, it is very important that you go slowly and enter into the comfort zone of the investor, before breaking the ice. So, to begin with let him do the talking, this will give you a better idea about his priorities and how strong is his conviction for traditional investments. So, you know how deep you need to dig to get business from the client.

If the investor is a naysayer, changing the mindset is a tough job, but isn't impossible. Straight away if you start with reciting the advantages of a mutual fund, it won't help. For the simple reason that the client is not willing to hear about it, he has built a fictional wall which will not let any modern investment product enter. He believes everything that is modern is risky, and he is too happy with the safe and low return yielding fd or ppf of his. So, you need to devise a strategy to break this imaginary wall.

Doctrine of Substitution: This, for the matter of fact, holds true for all kinds of investors. You need to virtually step into the client's shoes and think from his mind. So, if the investor is a typical Savings, FD and PPF investor for short, medium and long term investments respectively, he is definitely not looking forward to hearing about equities. So, you need to give him what he wants.

> For the investor, who is parking his money in savings account, he has two things in head; one, high level of liquidity so he can withdraw the money any time in the future whenever need arises, and two, safety of principal. So, you need to tell the investor about liquid funds. Ask him to invest a small amount like Rs 10,000 for a month. After 30 days, redeem his investment, and show him a comparison of the liquid fund returns with savings account. Explain to him that the liquid fund is a combination of the liquidity of a saving account and returns of a fixed deposit, and there is no threat to the principal amount.

> An investor whose all time favourite is Fixed income investments is not seeking any criticism on his ways of investing. So, now you need to counter the FD or PPF with a debt mutual fund or a bond by carefully choosing your words. You may say, “it's great you have been investing in FD, it is a wonderful product which offers good returns. I also have a product which offers the same safety of principal with slightly better returns. If you have invested a lac in FD, try investing 10,000 in this product too. I am sure you won't be disappointed.” Remember safety of principal is paramount for the investor, so you should restrict yourself to short term debt fund or a fixed maturity plan or a bond, depending upon the investment period he is comfortable with.

Impart knowledge. Share articles, insights from experts, Mutual Funds investment stats in developed countries, news, updates, etc., with the investor on a regular basis. Simple facts printed on a piece of paper will help you weaken the wall gradually. These will develop curiosity in the investor's mind leading to questions. These questions will give you a platform where you can exhibit the various investment products you offer, their advantages and how they are better than their traditional investment counterparts. You need to explain to them the concept of aligning investments with their life goals, that equity is the best product for long term goals and any volatility is neutralized over a long horizons.

These are your hard earned investors, and you need to be careful with them and not introduce them to super high risk products in the initial stages. Once the investor is comfortable with you, and has developed conviction in his new investment, you shall begin with something like SIP in a Balanced Fund. Tell him about it's unique structure, tax benefits, the debt component protecting the principal and the equity component working for growth. Show him the performance charts of a balanced fund over the years.

All advisors have their unique ways of handling traditional only clients, these tips may help you in the process. Because “Sometimes a slow gradual approach does more good than a large gesture” ~ Craig Newmark.

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"The most basic of all human needs is the need to understand and be understood. The best way to understand people is to listen to them."

Listening is a very important skill, for the survival and growth of any business, especially in industries where there is a lot of client interaction, since it is a vital part of communication. Ours is a line of business, where client communication dominates the scene. So, among the assortment of soft skills that we need to excel in, financial advisors must also be ace listeners. That's also one of the most prominent aspects of human touch and an unparalleled edge that you have over robo advisors. Yet we don't come across much material on the subject. It doesn't get enough weight in our degree courses or vocational trainings. Even in B-schools, students are taught presentation skills, reading skills, Group Discussion skills, Interview skills, but not listening skills.

So, how do we go about finessing our listening skills is the centerpoint of this passage. We have listed down few techniques that you can apply in the normal course of your practice to effectuate the same:

1. Negative Feedback: It's human nature that we only listen to what we want to hear. Until the time the conversation is neutral or is pro the listener, the listener will lend his ears to the speaker, but the moment the dialogue goes against his/her views, there will be a mental blockade, he/she will hear only to retaliate, rather listen to the speaker's viewpoint. Often our reaction to a negative feedback is also similar. When a client is unhappy, there will be two possible reactions: 1. He/She will communicate the discontent to you or 2. Sulk for the time being and will eventually disassociate from you. If the client chooses the former, i.e. gives a negative feedback to you, it is an opportunity that's thrown in your lap to be aware of your flaws, so that you can work upon them and progress to be a better advisor. If you hear the negative comments, only to give a counter response, you are not only ruining the opportunity but also hurting the client's sentiments who has taken the initiative to convey his displeasure. So, the first step to being a good listener is be receptive to negative feedback. It will display your commitment to client servicing and thus will develop the client's confidence in you.

2. Maintain eye contact: The second rule of effective listening is also a pivotal element of your body language, to look into the eye. It sounds simple, but this is a tricky one. If you are looking down, or here and there, while the other person is speaking, it conveys your lack of interest. Staring too hard is also not a good sign either, it's itchy and may make the speaker conscious. You need to maintain a balance between being too aggressive and too timid. So, how do look into the eyes yet not stare?

• Hang Around on the face: Look into one eye for five seconds then the second eye, then forehead, repeat.
• Take Breaks: Take occasional breaks from seeing eye to eye, you can look around at a plant or a glass or run your hands into your hair at the end of a particular topic, or after may be a 20 second gaze, etc.
• Acknowledgment: To break the ice and keep the mood of the conversation light, an intermittent nod, a hmmmm, a yes; can be a great way to display your interest in the talk, while leaving space for small intermissions from the constant look.

3. Seek Clarifications: It is very important, that all the parties in a dialogue, are on the same page, at all times. So if you happen to lose track of the conversation, you must prompt the speaker to seek clarification, or ask questions for clarity of understanding. So, if you are talking to a client, and you are not able to comprehend the context, ask what does he/she mean exactly, ask additional questions to assure understanding the full implication of the argument. Your efforts to seek clarity depicts your genuineness. However, you must note that you must interrupt the client only when he's done speaking, don't interrupt the flow of the speech, it may irritate the speaker.

4. Distance yourself from gadgets: In our field, more than half the business is carried through mobile phones, so constant sounds of the phone is an incessant process and is almost inevitable. However, when you are with a client, keep your mobile phone aside, either switched off or on silent mode, so that you don't bug him/her by frequent ringing or constant tinging of WhatsApp. Because despite your best efforts to pay utmost attention to the client, you may not be able to concentrate and may even end up irritating the client.

5. Don't jump on to conclusions: The last element of effective listening is, do not assume what's coming ahead. Listen to the speaker's argument in full, and not judge without knowing all the facts. There may be some very important facts coming up, which may change the shape of the discussion altogether. Respond only after listening carefully, completely and after giving a thorough thought.

To conclude, When we speak, we repeat what we already know, listening to people gives us an opportunity to learn something new. So, listen with an open mind, be all ears to the speaker, maintain eye contact, let no stone unturned in creating an environment for the client to speak his heart out. Our success in the venture lies in our ability to control our sensations.

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Happy New Year !!

As we enter 2019, a new year of promises, opportunities and hopes slowly dawns upon us. It is the season of making resolutions and before we continue with the article, there are a few resolutions or wishes that we have for you. We wish that this year, may we see you as more updated and knowledgeable, may your clients be very satisfied with your great services (make them great!) and lastly, may you achieve your business targets!

It is important to remember that investors are with you because of the services and the guidance that you provide. Thus, the edge the advisor has is his knowledge and his ability to keep the client happy.

While we have closed the calendar year 2018, it is important to remember that we are just 3 months away from closing the financial year 2018-19. One area where you as an advisor should bring into extra focus is tax savings. One can never be too soon with tax saving. Time is short and it is best that we do not let our clients be at the mercy of their CAs to take good care of it? Should you allow this to happen? Absolutely not and you have to intervene.

As an advisor, your role is not just limited to suggesting and helping your clients with investments. It is your responsibility to also make sure that these investments are being made according to the investors' requirements and also to make sure that all the benefits provided by these investments are being availed by the investor. A very important piece of investment planning is also related to tax planning. Making full use of the tax savings options available to the investors should be an aim to achieve but one should also keep in mind the investor's needs. Suggesting the right kind of instruments for tax savings to the extent feasible is what you should aim at.

Obviously, ELSS is on top of the list here. As advisors, we already know why ELSS is the idea tax saving instruments for investors and the great advantages they provide. Since ELSS invests in equities, the returns are likely to be much better than the other tax savings instruments like PPF, NSCC etc which provide tax relief under Section 80C. While most instruments provide a return of 7-8%, one can easily expect a return in excess of 10-12% in the long term from ELSS.

Another hidden advantage of investing in ELSS is that it gives the investor a taste of investing in equity. Thus ELSS can be an entry point for equities for those who are shy of it. It can also be part of the bare minimum equity asset allocation for investors who are risk averse and investing primarily into debt products. This way, limited equity exposure is provided with the primary objective of tax savings. We know that investors readily agree to invest in them because of the tax savings and low lock-in period, so if they are not happy with the returns they can exit easily. However, since our primary goal has to be tax saving along with long-term investments, as the investors notice better returns from ELSS, they are motivated to invest in other funds which are equity-linked.

But don't NPS and ULIPs provide similar returns and also help in tax savings? Sure they do, but they also have a high lock-in period. A high lock-in period disables you from getting out of the investment in case of need and also from shifting to another investment in case you are not happy with the returns. As an advisor, you must be aware that what is easier, convincing a client to invest in a new product with a higher lock-in period or a lower lock-in period.

Thus, not only will ELSS make a good tax saving instrument, but it will also help you in convincing clients to invest in schemes with high exposure in equity as they will see the return benefits. Again, this benefit is limited for those investors who have the risk appetite but are dubious of investing in equity schemes. Thus, the beginning of a new year gives you just the right opportunity to speak to your clients to invest in ELSS and not just save tax but also earn better returns.

How to plan for ELSS?

We would suggest that you get the figures for investments made into ELSS by your investors for this financial year. This can be easily fetched from Partner Desk using the Account Insight Report and/or the Transaction reports.

We would like you to calculate the following figures: ELSS investments already made this year and the like gap in the ELSS investment limits (i.e., short-fall against 1.5 lakhs limit)

Once this information is at your disposal, please identify the following investors...

1. Investors who had invested last year but have yet not invested in ELSS this year – Zero investments

2. Investors who have not invested as much or are likely to save less compared to last year – Less investments than last year

3. Investors who are likely investing in ELSS below potential – the gap in the potential of maximum 1.5 lakhs

4. New investors who have not invested or have not adequately invested in ELSS

On having the above information, you should have them sorted on the potential ELSS investments target – starting with the highest amount. This is now a piece of very important information for you. You should ideally start working on this list immediately. You may also consult your relationship manager on the entire strategy of getting more ELSS investments in the next two months. Don't leave things till the last month.

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