One hears that there are upwards of 3 million IFAs selling some financial product or the other. My take on this is – not more than 10,000 are in it by choice. Most of them would happily take up a job in the financial services sector. Some of them will not get a job because of age and some will not get a job because they are not qualified to get a job.
I frankly do not think this is a great profession to be in. The retail customer will not pay anywhere near what will be a living wage for an independent planner. So most of the planners will come under some roof or brand – and again the customer will lose because of sales pressures. Of course the customer who wants services free, will have to pay the price for it, let him pay.
The contrary view to the above is – It will make a great business after 8-10 years by which time all the people who rebate, people who do not understand and their likes would be all wiped out / have retired. This will mean there will be a huge demand for decent IFAs – and the demand can only go up.
Of course the greatest challenge for the IFA is not getting a client, but it is to fight against the fund management industry – when they play dirty.
Take an example – if an I F A has introduced a client to a mutual fund. The client applies for a PIN number to use the net for doing transactions. If the client invests IN THE SAME FOLIO but forgets to insert the I F A’s code, the I F A does not get any commission on that. However if the client removes money, the trail on the removed money is not paid to the IFA. The dirty tricks department of all the mutual funds works full time – even the best funds play it.
Is it an uneven battle? So far maybe. However once there are some more ETFs and the higher end customer goes away, and the banks start concentrating on broking (far, far, far more profitable than selling mutual fund schemes) the battle will become more even.
Watch this space…interesting times are upon us..:)
Want to know what is IFA galaxy’s take on this! IFA galaxy now has upwards of 2500 members – Congrats, good show.
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