A few days ago I did a post saying what IFA cannot be taught…and they must learn…here are a few more…
Remember that your clients are your own portfolio, AND YOU HAVE CHOSEN THEM. You should select them carefully and keep them till both of you have a mutual need to fulfill. If a client is in a location that you will not travel to, drop him /her. Do not accept in a weak moment and then keep wondering whether you should have accepted or not. You have to monitor each relationship just like a good portfolio manager monitors each of the positions in his portfolio. Each client has a role to play in your life at a point in time. Each client is unique in and each of them chose you to fill a very serious, RESPONSIBLE role in their lives. It is completely your call and a privilege to serve them in such a serious capacity, and your responsibilities should not be taken lightly.
-You may be happy and surprised to know how much you can learn from your clients. Some of them are very spontaneous, some are very methodical and facts driven. Many of them are in very senior managerial posts. Some of the best investment ideas I’ve had over the years were the products of sensible, long and in-depth conversations with very creative people. Some who are brave, some who have traveled and some who insist on seeing the world as one of opportunity. Clients are the real gems, and their creativity mixed with tempered optimism make them the most healthy and fruitful client relationships.
-While I was never opposed to social media, I’ve come to appreciate the resources available to financial professionals on such. Facebook, LinkedIn and Twitter – all have a role to play. Maintaining and running a blog is not easy – requires tremendous content, but it helps in creating good content which clients (and others) can access when they want and not just through a sporadic newsletter. These resources are free (as of June 2016 as I write), and demand only your time and attention. It is a great opportunity and it would be foolish not to take advantage of this opportunity to learn and connect.
I’ve learned that you shouldn’t be afraid of volatility or adversity in the markets. You can analyze an investment till the cows come home, subjecting it to back-tests and you can attempt to discern its promise with more ratios. However, there is a big difference between doing the math in the classroom and watching its value fluctuate in a portfolio. Volatility is easy to explain when the market keeps going up, and difficult when the market is going down. It is when a client’s portfolio is deep crimson that your mettle, patience and communication skills will be tested. No, there are no training sessions that I do for this. It has to be learnt. You have to remind yourself and the client that in the short-term, the market is emotional and doesn’t care about your analysis, your financial goals and the ‘r’ that you require to meet the goals. It is also a good time to remind the client that the market may not give the return that he needs. He may have to downsize his goals. It can be stressful. It can swamp you and your client’s portfolio if you let it. However, it is important not to overreact. Just because the UK decided to pull out of Brexit, 2 days after you invested. Or 2 months after you invested. Just wait it out. Just because ONE investment result was adverse doesn’t mean your entire process was awful and needs to be scrapped.
There are many and almost countless other examples of situations and scenarios for which professional training on its own would have been inadequate. Apprenticeships and internships help, but ultimately there’s no substitute for real-world client meetings, rejections, acceptances, targets, achievements, and other experiences, assuming you survive them.
And of course, the regulator wants you to live.
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