“The figures don’t lie”, however ‘liars figure’ a way of telling the story. This is a saying I have often uttered over my career – a career spanning investing, brokerage, advisory, and of course audit, law and equity research.  An occupational hazard of a career in the personal finance industry – in training and blogging  is having to  “think in numbers” . The numbers don’t always tell us what we hope they will, or want them to tell us!  The calendar tells me that 2016 marks a decade MORE than a quarter of a century since I graduated from college!

It’s a nice way to frame for you, and some of my younger, brighter colleagues, how our industry has evolved since I began my career in 1982.  At that time, the Sensex was at 217 – wait a minute, there was NO SENSEX. The Sensex was calculated only in 1984 with back numbers from 1979. The Stock Exchange, Bombay (that is the correct name of BSE and the original name too) was a place where no educated man would want to make a career! Imagine doing CA and becoming a ‘stock broker’ aka dalal !!  An investor with Rs. 100,000 in the Sensex in 1982 would have had more than Rs. 1.4 crores in 2016. As of now 2016 is a lost year – I daresay the returns are almost insignificant if you have been in the index.

When I started in the stock brokerage industry, we did not talk much, but ‘making money for the client’ was of course the main focus, but that involved creating HUF (Hindu Undivided Family), Association of Persons (AOP) – taxation entities was far more important. Long term meant 3 years even in Income tax and anything less than that was short term capital gains. People with high taxation were included in AOP and the clubbing provisions invoked so that the losses could be set off. All this happened without using the words ‘wealth management’. Normally it also meant increasing the wealth of the family – which meant that income had to be legitimately shifted from the high tax payer to the low tax payer or Huf or Aop! Portfolios had to meet goals – it was as simple as that.

Following a thirty plus year stretch that saw the best and worst of times, I have seen a welcome evolution in many parts of the investment industry to focus more on wealth management.  Many educated people have come into the profession – this was not true in the late ’80s. However, much of the financial services industry focuses on trying to “out pick” shares or funds – over other investors.  The quest to find the best share, best fund, or best….xyz, or build the perfect portfolio, is futile.  The perfect portfolio, or perfect wealth management plan is the one that you and your client understand, and allows you to meet your goals. Frankly, it should not matter at all whether you  “beat the market.” Obviously, “Independent Financial Advisory” is in your name, so it’s crucial to do well at managing money.  However, it’s very important to focus on an overall wealth management philosophy and plan that brings your clients joy and peace of mind, and benefits their family, friends, government and society at large through sensible usage of the wealth.

Wealth management is an integrative approach to proactively managing all aspects of your client’s financial life, with an emphasis on defining EVERY client’s unique goals. It is with thought that we wrote a book saying ‘You Can Be Rich Too – With Goal Based Investing’ (sorry for the plug!!).  While it’s simpler and perhaps (I doubt actually) more profitable for an adviser to just manage money, it may not be appropriate for most of the clients. Making money in his/her career or a profession is what the client is good at and his doing a good job. So just making more money, rather than a means to an end, does not help clients live life to its potential.   Actively listening to a client, and helping them develop a plan to get from “Point A to Point B” is something which I am sure you are practicing, and I am sure that is instilled not just in you but also in your employee’s mind.

It’s not enough to have a good process-you have to be able to hire competent employees with integrity and most importantly, a heart to serve. Your employees have to be passionate about helping your clients articulate, develop, implement and monitor plans to reach their goals, and perhaps far most importantly, achieve peace of mind.

Are you getting satisfaction from being a client’s trusted adviser?

Do you love seeing the wedding card of a client’s daughter /son funded by the gains in the markets? Or the FB fotos of the graduation ceremony – where the education was funded by the portfolio of a late grand parent – who was YOUR client a few years ago?

Each of these trials and tribulations are the happenings of the real world, and have to give you greater pleasure than just being lucky in having picked a ‘Motilal Oswal fund’ over a more well ‘established’ fund.

Judge by happiness. Numbers do not matter – they can be made to lie. Easily.

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