What is the most difficult part of the Consultancy business?


I am convinced that ‘strategic’ consulting is easy, the tactical consultancy – the nuts and bolts is difficult. Let me tell you what a dentist told me.

“I can see a patients teeth and see neglect – improper brushing, no flossing (oops what’s that?), no pulling…eating hard stuff, sticky stuff, etc. – and client says..I brush regularly” – rant of a dentist.

Go to a running coach – and the story remains the same. People will not cut down food eaten, increase exercises, or run regularly. However, they want results from the coach.

Similar stories can be heard from Chartered Accountants, Lawyers, financial advisers,  – all of them have such stories of woe.

Another doc says..”You have an appointment with a patient and have said the following ‘I need you to get this lab tests done, see this specialist, take this medicine, …..change this diet.’ And they come back a few months later – and the client would have done NONE OF THIS.. Too expensive, did not get time, your doc was too busy.

Now let’s come to my specialisation – personal finance. I need to know about the various investment options AND know how to handle the customer. Investor management is far more important in real life – but hey what we study was more about investment management. We did not study investor behavior, or about how to hold the client’s hands while he is going through a turmoil. Or how to convince him not to read amazing shit from self styled gurus (like this blogger!). Worse of course are people who know even less and have not done work in the field.

An expert in wealth management  understands that the solutions from the client’s view is intimidating, irritating, confusing, long-winded, expensive, and time-consuming. Worse, nothing that he understands today helps him when after 4 years ANOTHER adviser tells him “it was pure shit”. Nothing you prescribe matters until you’ve addressed that reality with clients, because even a perfect solution makes no difference to the client who doesn’t follow it.

How do you force the client to go for a medical test? The best of intentions do not matter – implementation does. A great trader does not make a great investor. A great investor does not become a great investment manager. A big firm doing wealth management, corporate work, IPO managing, selling life insurance, etc – are businesses so damn conflicted that the client comes last. The big client with Rs. 1000 crores of corporate fund will NEVER make a loss, but the client with Rs. 30 crores could come last even in a 2 man race.

What can the investor do? He is reading too much, and getting confused. He is reading too many blogs – baked, half baked and not baked at all. The investor is trying to pick a good adviser (or investment manager?) from thousands of options. His bank is telling him “Just sign here and you will be richer than Buffett”. He is watching TV where he gets a tip every minute. He has an adviser about whom he knows nothing. It is fashionable to believe that a fee only adviser is not on the payroll of the mutual fund. They don’t have that much information to judge you on. Your past performance is not on a public platform. You choose to give him a list of your clients – and he is worried about selection bias. And your past performance could have been driven by luck or simply selecting a big fund which was in vogue when you selected. When a client has her life savings on the line and NO audited information to judge you on, is it not obvious that he should bail out on a fall in the market?

Investment management, consultancy, health, are all about amazing communication. By the client to the adviser and by the adviser to the client.

Do you have the guts to tell the client

“Sorry, but you cannot afford that luxury shit that you are looking at”.

“Your banker has walked you up the garden path, and you should have asked me BEFORE you signed that shit piece of paper”

“Value investing does well ONLY if you have the guts to do a 5 year sip in Icici Pru discovery..and sir since you said it is a 12 year investment I chose that fund”

“If you have a 90 day dance with each mutual fund scheme..go and dance..you do not need me”

“When your banker treats you to a lunch at Khyber restaurant, pay the bill and walk away. It is cheaper than the Rs. 25,00,000 PMS which invests in venture funds”

All this calls for balls. All this calls for good communication with the client. Being able to tell the client “over 20 years of investing life there is a good chance that Hdfc Prudence/ Icici Pru discovery / Franklin India Prima Plus / Mirae/ Kotak 30/ Sundaram / Dsp….will deliver REAL return – and today it is tax free. If you want to do a 90 day dance, there are about 39k Ifa – you will find it on the amfi / cams website please go to them. I have better things to do.



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