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10 Pieces of Advice for New Financial Planners

By Lovaii Navlakhi, CFP

I started out as a financial planner in 2001 without really meaning to. In between jobs, I began devoting time looking after portfolios of my friends and ex-colleagues. By the time my new job materialised, it was too late – I was hooked. I was thoroughly enjoying myself in this new role as a financial advisor.

Twelve years ago, little was known about financial planning as a concept and true financial planners did not exist. It was mostly distributors and their agents. So starting out as a financial advisor was both exciting and challenging. Opportunities were immense as equity markets in India were just picking up momentum; there was a whole plethora of new products and an investor base with increased savings that were looking beyond traditional fixed deposits and bonds to grow their wealth. There were also many challenges as well – there was no formal training; skills were learnt on the job; and financial planning software hadn’t been invented yet.

Those were heady days, indeed.

Today, new financial planners are fresh out of a financial planning education, with certification, knowledge and skills, and the world is his or her oyster. An increased amount of the public understands the importance of financial planning and all-in-all the environment is more conducive to the growth of financial planners.

Be Passionate

But one thing remains the same. You can only succeed and enjoy what you are doing if you truly and passionately believe in financial planning as a way of life for yourself and your clients. I did a financial plan for myself when I was 38. I wished then that someone had guided me when I was 28. You need to sincerely believe in the good that financial planning can do to a client’s life.

In my opinion, passion is a prerequisite to being a good financial planner.

Get Educated

Certification and qualification play an important role in shaping a financial planner. Financial planning encompasses an individual’s entire life and the knowledge required to help him navigate through his life in financial terms is vast. All the necessary knowledge required can obviously not be taught in a classroom but the initial education received creates a strong foundation for planners to build upon.

Get Certified

While knowledge and skills are definitely key takeaways, a certification such as CFP certification also helps to build confidence in the planner and of course, strengthen his credentials. It makes it easier for him to gain entry – that foot in the door, so to speak; especially in today’s world where people have become distrustful of advisors. A certification inspires trust and confidence in the planner, knowing that he is qualified to advise on the subject matter.

Find a Mentor

Experience is also a great teacher. Ideally, if a new financial planner can shadow a well-established one, that would add to his repertoire of knowhow and expertise. It would help him understand the finer nuances of being a good financial planner which are not taught in school. How to conduct oneself; how to be understanding and patient with a client, and firm when necessary; how to say “No”, etc. are all things that are best learnt through experience.

Maintain Detailed Records

Being organised and paying attention to detail cannot be stressed enough as important qualities that a financial planner needs to have. You are dealing with numbers on one hand and human emotions, aspirations and constraints on the other – the only way to keep them straight is to have systems in place. Maintain detailed records of client history. Capture observations, inputs and conclusions from each interaction with the client, whether in person, on the phone or by email – only then will you be able to truly satisfy the client.

Make Customer Service Your Top Priority

Customer service, first, last, and everywhere in between: that should be your mantra. You may get a client but whether you keep him or not completely depends on the service you provide on an ongoing basis. There are no shortcuts here. You need to realise that your relationship with the client is for life and not transactional. Your purpose is to help him achieve his goals, not just today, next month or next year but all his goals for the rest of his life. This may be a tall order but it is possible if you continue to provide the service you promised when you met him first.

Personalize Your Communication

It is important to understand what the client expects from you – some may prefer to be informed before and after every small action on their portfolio, while others may prefer to be informed after the fact. Some may want to meet you periodically and discuss what’s happening in their portfolio while others think the reason they have employed your services is so that they can leave their money worries to you and concentrate on other things. You need to doctor your approach and service according to each clients’ preferences and needs. Some steps should remain the same for everyone, such as portfolio updates, reviewing reports, market updates and subsequent actions required, financial plan reviews, insurance reviews, new product updates, etc.

Handle Mistakes Properly

Everyone makes mistakes. If you admit them, take corrective action and compensate the client financially when possible; it goes a long way in pursuing long term client relationships. So learn from your mistakes and move on.

Underlying all of the above is the core of integrity and ethics that you need to possess and there is no substitute for that. Putting the clients’ interests first has to be your mantra to be a successful financial planner. While money is our currency, human relationships are at the heart of financial planning. A client has to be confident that he can depend on you to make decisions on his behalf that are in his best interest.

Charge Your Clients for the Value You Offer

Once a client appreciates and values the benefits that you provide – competence, honesty, good service, and peace of mind, he will be able to justify your fees. It was in October of 2003 that I started charging fees from my clients in addition to the commissions I received from the sales of various products. It took a lot of introspection, market research and confidence-building before I made this transition. But, my take is if you feel you deliver value to your client, charge for it – don’t be shy or defensive about it; it is your right as a service provider.

Keep Learning

Last but not least; I strongly believe that as a financial planner what strengthens you is learning – about products, new regulations, economics and politics but also about the companies that your clients work for, the schools and colleges their children go to, situations that they find themselves in and so on. While I do a fair amount of reading, my biggest source of learning comes from my clients and my peers. You should also attend conferences and seminars and exchange ideas and opinions with experts and colleagues. Learn from their experiences and share your observations. Learning is continuous and never stops.

I wish you success in this field and believe in the power of financial planning — for it is the power to change lives!

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