I know many IFAs and bank RMs follow my blog (aha!) so here are some unsolicited tips:
1. Keep it simple: not every client wants to learn all the jargon. So before you start find out how much the client reads, knows, understands before you start talking. Some clients will get intimidated and run away! Some others may participate actively.
2. Promise at the beginning that you will keep it jargon free and ask the client to put his hand up if he does not understand some words.
3. Be open about how you are going to charge: Fee? Fee only? Fee+ commission? Fee only will not be suitable for a person with a small portfolio if you are in the 50k per annum charging types. So if a client wants to invest Rs. 4000 a month, you will have to go for the commission model. If a client wants to invest Rs. 5 crores you may be better off with the fee model. Nothing wrong with either but letting the client know is better.
4. Do not assume that what is easy for you is easy for them! I have almost 40 years of market experience – for me volatility is like second nature. No problems at all. When I watch TV (if at all) I can laugh it off, nobody pressurizes me to do anything financially foolish (I think!!). If I assume that a newbie is at the same comfort level it would be foolish. A newbies can be coerced into buying a bad product, his boss / his wife can sell him an endowment plan, he may not know the difference between a term plan and a “term plan with a return of premium” ..so understanding that the level of understanding is different is very important.
5. Patience is a big virtue: your client is a client period. Now he may be quick, lazy, patient, impatient, ..do not be judgemental. See how the whole thing works out. Adjust to client needs do not expect the client to adjust to your needs. It does not happen that way.
6. You cannot help everyone: some client, friend, brother in law, sister, father – somebody will continue to hurt himself financially. Smile about it. After all there is the karma theory at work. If a guy is in a very well paid company, God may want him to lose some money in the markets. Maybe there is a God who wants it that way. Maybe he is fated to lose that mony. Do not get caught in somebody else’s problem. Be careful about whom you help and try to help. Remember you cannot help all the ‘investors’ so be selective and preferably say only correct things – politically and morally.
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