There are many financial advisers in the world and many are wondering whether they will be replaced by an algorithm! Sure people can create software that can replace financial advisers, but certain things will keep the client with you, if you do it well:

1. Establish a great relationship: If you are the ‘Go To’ person for your client – whether it is a change of job, or career guidance for their kids, or changing home…if you establish a good relationship, chances are the client will stay with you and not go dating a computer!!

2. Have the guts to be blunt: If you have enough confidence to predict the future, do you have the guts to tell the client what can happen and what cannot? The ability to make the client understand the risk-return relationship, the fact that the next 5 years may see a sub par equity and debt funds run. Do you have the guts to say that the client has to increase his contribution?

3. These days I am seeing IFAs trying to fit too many things because they are afraid that the client will leave. This is funny. If you are an IFA clear the air and tell the client what he can get and WHAT HE CANNOT. Just because he is paying you a fee it does not mean he owns you. BE CLEAR IN YOUR communication.

4. Communicating to each client as per his emotional, psychological understanding is a very important professional requirement. Some clients do not mind discussing their personal life in public, most professionals can handle….

5. When a client visits too many websites, he might get a lot of impossible ideas. Be close to the client, to reality, and tell him what to read, what to believe and tell him like porn, do not build wrong expectations. It does not help in the long run.

and many more!!

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  1. Very useful insights. An advisor needs to add value by shaping the behaviour of his clients. This is an ongoing job like daily exercise or meditation. If an advisor’s value addition is only choosing products, he can be easily replaced. Clients will have emotional attachment with an advisor only if their attitude and behaviour towards investments is influenced by the advisor.

    Robo advisors, reduction and elimination of commissions, fee only model (where fee may not match commissions) would be a reality over the next decade. Instead of worrying about these, advisors need to prove their relevance in the emotional and behavioural aspects.

    Also advisors should work towards their financial independence as they do so for their clients.

  2. good point, the biggest work that i see for advisors is to stop their clients from making mistakes that can destroy their wealth (chit funds, trading, etc), to teach asset allocation and investments beyond fixed income, finally to nudge them into saving more.

  3. I guess biggest task for advisors is to find investment ways for their clients to make good returns without impacting the principal amount..Thanks for the info and valuable points

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