{"id":969,"date":"2019-08-28T05:02:49","date_gmt":"2019-08-28T05:02:49","guid":{"rendered":"http:\/\/blog.certifiedfinancialguardian.com\/?p=969"},"modified":"2019-08-28T05:54:16","modified_gmt":"2019-08-28T05:54:16","slug":"earning-trust-the-only-thing-that-can-get-ifas-going-in-challenging-times","status":"publish","type":"post","link":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/2019\/08\/28\/earning-trust-the-only-thing-that-can-get-ifas-going-in-challenging-times\/","title":{"rendered":"Earning Trust \u2013 The Only Thing That Can Get IFAs Going In Challenging Times"},"content":{"rendered":"\n<p>As indicated by the recent <a href=\"https:\/\/www.amfiindia.com\/Themes\/Theme1\/downloads\/home\/Individual-Investor-July-2019.pdf\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">AMFI data<\/a>, retail investors have understood the importance of sound financial advice and don\u2019t mind paying for it. About 62% of the assets of individual investors are from T30 cities were brought in by distributors, as on July 31, 2019. <\/p>\n\n\n\n<p>Despite the many direct investment digital\nplatforms that are available and mushrooming in this digital era, banks too are\noffering Robo-advisory platforms for direct investments. However, investors continue\nto seek advisers on account of these reasons: <\/p>\n\n\n\n<ul><li>Higher costs by banks and certain\nRobo-advisory platforms<\/li><li>Uncomfortable to share data\ndigitally<\/li><li>Want clarity about investment\nproducts and avenues<\/li><\/ul>\n\n\n\n<p><strong><em>What can adviser do to retain and increase their\nclient base?<\/em><\/strong><\/p>\n\n\n\n<p>First, advisers have to prove they are\ntrustworthy to retain a client and grow business through referrals. The Mutual\nFund industry faces ethical issues because of several other situations:<\/p>\n\n\n\n<ol><li>Insurance agents pitching\ninsurance products as investment products,<\/li><li>Lack of financial literacy\nsessions by advisers, <\/li><li>Rampant mis-selling by few\nadvisers, and<\/li><li>Advisers Catering only to HNIs\nin order to garner higher commissions. <\/li><\/ol>\n\n\n\n<p>It is seen that the penetration of independent advisers for Mutual Fund business is low as compared to the insurance agents. This is primarily because of the <a href=\"http:\/\/blog.certifiedfinancialguardian.com\/index.php\/2019\/04\/09\/sebis-new-mutual-fund-commission-disclosure-norms-the-impact-on-ifas\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">stricter norms<\/a> the mutual fund industry adheres to, which is of course for the welfare of the investors. But similar norms aren\u2019t imposed to the insurance industry and at the helm is a government body to rescue insurance agents. This has further discouraged the financial advisory business. <\/p>\n\n\n\n<p>[<strong>Read<\/strong>: <a href=\"http:\/\/blog.certifiedfinancialguardian.com\/index.php\/2019\/08\/21\/another-step-from-sebi-to-safeguard-the-interest-of-mutual-fund-investors\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">Another Step From SEBI To Safeguard The Interest Of Mutual Fund Investors<\/a>]<\/p>\n\n\n\n<p>Due to this, the retail investors lack\ntrust as they are unable to distinguish between unscrupulous and ethically\nsound advisers. But, if investors receive high-quality valuable financial\nadvice aligned to their level of satisfaction and risk tolerance, they will begin\nto trust financial advisers. <\/p>\n\n\n\n<p>That\u2019s why it is very important for advisers\nto show effective relationship management skills in order to cultivate trust to\nretain clients and attract new ones through referrals, based on credibility in\na shifting advisory space. <\/p>\n\n\n\n<p>The first step for an adviser, towards\nbuilding the trust of a prospective client is by being a \u201c<strong>good listener<\/strong>\u201d, the more an adviser listens, the more they can\nfocus on understanding the client\u2019s requirements, doubts, risks, and goals.\nBecause investors will be happy to entrust someone who not only understands\ntheir goals, but believes that their functional, emotional, and ethical needs\nwere being met.<\/p>\n\n\n\n<p>Based on what the client shares, the\nadviser must provide meaningful advice, handholding them through the decision\nmaking and investment process. Acting in the client\u2019s best interests and on behalf\nof them whenever permitted to and keeping up with their word; proves that the\nadviser is a trustworthy person. <\/p>\n\n\n\n<p>Most clients develop opinions early on\nabout their advisers, through simple acts\u2026 <\/p>\n\n\n\n<ol><li>Failing to respond to their queries,\n<\/li><li>Not resolving doubts, and <\/li><li>Not attending phone calls\u2026 <\/li><\/ol>\n\n\n\n<p>All these are looked upon as red flags by\nthe clients in terms of an adviser\u2019s image and in turn unworthy of trust. <\/p>\n\n\n\n<p>A client takes notice of the ethical aspect\nof how the adviser advocates on moral and fiduciary standards and practices\nwhen he acts in the clients\u2019 best interest in a tangible way when necessary.<\/p>\n\n\n\n<p>[<strong>Read<\/strong>: <a href=\"http:\/\/blog.certifiedfinancialguardian.com\/index.php\/2019\/05\/23\/how-ifas-can-overcome-hurdles-in-their-practice\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">How IFAs Can Overcome Hurdles In Their Practice<\/a>]&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <\/p>\n\n\n\n<p>The emotional trust is the most difficult\none, but it solely depends on how the adviser tackles their client\u2019s fears during\nmarket volatility and keeps their expectations realistic based on financial\ngoal and investment portfolio. The adviser must know how to make their clients\ncomfortable by being a counsellor. <\/p>\n\n\n\n<p>Besides, being available for open communication with clarity and transparency adds more value and better rapport with the client. The adviser\u2019s relentless focus should be on making the clients aware about the accurate details of any fund through <a href=\"https:\/\/www.personalfn.com\/services\/mutualfund-research\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">research<\/a>, managing their own time efficiently,&nbsp;framing their advice with the client\u2019s goals in mind, while communicating effectively, helps in developing client\u2019s trust. <\/p>\n\n\n\n<p>Also, an adviser who can develop through customise\nplanning unique investment solutions after identifying each client\u2019s unique\nsituation, their goals and concerns, earns more brownie points by getting\nreferrals. <\/p>\n\n\n\n<p>And if a financial adviser provides a\nservice calendar that provides a timely review schedule to discuss the client\u2019s\ninvestments and provide other value-added services, like research reports or\ntools, can also be helpful. <\/p>\n\n\n\n<p>For advisors to nurture and deepen their\nclient relationships, it&#8217;s essential that they understand the foundation on\nwhich trust is built. In the advisory industry, \u201c<strong>TRUST<\/strong>\u201d is the integral core- built on the foundation of integrity. <\/p>\n\n\n\n<p>[<strong>Read<\/strong>: <a href=\"http:\/\/blog.certifiedfinancialguardian.com\/index.php\/2019\/04\/12\/how-ifas-can-gain-the-trust-and-respect-of-their-clients\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">How IFAs Can Gain the Trust and Respect of Their Clients<\/a>]<\/p>\n\n\n\n<p>As a credible adviser, fostering trust\nrequires devoting time for clients initially will reap substantial&nbsp;rewards\nfor you in the form of higher client retention and referral rates in the long\nterm.<\/p>\n\n\n\n<p><strong>End notes:\n<\/strong><\/p>\n\n\n\n<ul><li>As an adviser ensure to\ncontinually earn the honour and privilege to work with the client by never\nfaltering in delivering what you\u2019ve promised and have been providing. <\/li><li>The key to managing\nexpectations, especially those that may be unattainable, is by consistently demonstrating\nto them the value you provide as their adviser and rectifying any unrealistic\nexpectations. <\/li><li>Investors expect you to be\ntransparent, follow the best disclosure norms, and hope for confidentiality. <\/li><li>Furthermore, they expect you to\nunderstand their needs so they can receive \u2018personalised\u2019 prudent advice. <\/li><li>Cultivating client\u2019s trust is a\ntime-taking process based on ethical advice, fiduciary standards to place the\ninvestor&#8217;s\/ client&#8217;s interests above your own will help you gain the client\u2019s\ntrust.<\/li><\/ul>\n\n\n\n<p>As an investment adviser, it is imperative\nto distinguish yourself from the crowd as a trustworthy person by providing honest\nand ethical advice and by adopting the best\nbusiness practices of high fiduciary standards. <\/p>\n\n\n\n<p>Douglas Adams, an English writer, humourist, and dramatist once said, \u201c<em>To give real service you must add something which cannot be bought or measured with money, and that is sincerity and integrity.<\/em>\u201d <\/p>\n\n\n\n<p><strong><em>Editor\u2019s note<\/em><\/strong>: <\/p>\n\n\n\n<p><em>We have launched <a href=\"https:\/\/www.certifiedfinancialguardian.com\/cfgregistration.aspx?campaignid=&amp;IsInvestor=Advisor\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">CFG<\/a> with the objective to solve the biggest and most common challenge faced by both the industry and the investment population at large\u2014the complete lack of the \u2018Trust\u2019 factor. This has been the biggest leap we have possibly taken. <\/em><\/p>\n\n\n\n<p><em>CFG aims to provide you with expert research &amp; training material, insights on best performing funds, <a href=\"https:\/\/www.certifiedfinancialguardian.com\/cfgregistration.aspx?campaignid=&amp;IsInvestor=Advisor\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">special financial planning<\/a> tools and a lot more! <\/em><\/p>\n\n\n\n<p><em>If you want to be a credible adviser <a href=\"https:\/\/www.certifiedfinancialguardian.com\/cfgregistration.aspx?campaignid=&amp;IsInvestor=Advisor\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">register here now<\/a>!<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>As indicated by the recent AMFI data, retail investors have understood the importance of sound financial advice and don\u2019t mind paying for it. About 62% of the assets of individual investors are from T30 cities were brought in by distributors, as on July 31, 2019. Despite the many direct investment digital platforms that are available&hellip;<\/p>\n","protected":false},"author":4,"featured_media":971,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"cybocfi_hide_featured_image":""},"categories":[3],"tags":[],"_links":{"self":[{"href":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/wp-json\/wp\/v2\/posts\/969"}],"collection":[{"href":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/wp-json\/wp\/v2\/comments?post=969"}],"version-history":[{"count":3,"href":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/wp-json\/wp\/v2\/posts\/969\/revisions"}],"predecessor-version":[{"id":973,"href":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/wp-json\/wp\/v2\/posts\/969\/revisions\/973"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/wp-json\/wp\/v2\/media\/971"}],"wp:attachment":[{"href":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/wp-json\/wp\/v2\/media?parent=969"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/wp-json\/wp\/v2\/categories?post=969"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.certifiedfinancialguardian.com\/index.php\/wp-json\/wp\/v2\/tags?post=969"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}