March 27, 2020

Rays of Hope in current times

Network FP Taskforce

Taskforce

Rays of Hope in current times

Humans are resilient creatures. And a lot of time they realise the extent of their resilience in the most testing times. Well, actually a little after – during such difficult phases it is often felt that this is the end of the road, from where there is no further way visible. When we stand at such an impasse, there are a few options that we have- we stay the course and fight, we get shaken up and flee, we sit down till the storm passes, etc. To pick any one as an ideal response is a futile exercise, as it is often a combination of these that works as the best response. The current situation- both in terms of what the Covid-19 pandemic is doing to our society as a whole and to our businesses has led to a lot of worry. There is uncertainty and fear, we have never seen something like this happen. Should we be as worried as we are? The times are testing, no doubt and the path ahead is very foggy. But, what if we could channelise the fear, surplus time and our energy on something that can help us rebuild ourselves, our skill sets, the clients’ confidence and our business? 3 advisors- members of our NFP Taskforce tell us how they have taken this period in their stride. They shared with us how they feel, how their clients feel and how they are adapting to the changed circumstances. We hope stories like these will keep us all connected and bind us stronger as a community!

Bhuvanaa Shreeram, Founder CEO Plan2Prosper OPC Pvt Ltd:

Firstly, I don’t think these are bad times at all. There are people going through some terrible things and my heart goes out to them but that does not make the situation universally bad. It is a way for us to regather ourselves and relaunch ourselves towards the coming days.
Taking about the markets, we see clients finally accepting what is happening to their investments after going through the first 4 stages of mourning( denial, anger, bargaining and depression). Investors are more resilient that we think and they think they are. They have now digested the fact and are looking beyond what is happening today. We have had risk measures in place like put options for a few clients and of course the investments are based on the tenure of the goal. We have been talking to our clients constantly and while that is a drain on us after a point, simply due to exchange of energy, we have had just a handful of clients that have been really worried that we had to pay additional attention to.

At this time, predicting when the markets will rebound is foolish. They will rebound, yes, but no one can say for sure when this will happen. We’d rather be ready with our tactical strategy in case we don’t see a quick recovery. We have to be flexible with our strategy and take changes in our stride and work towards coming back on track. When it comes to working from home, it has not been a big challenge as owing to the diverse geographical spread of our client base, we have cultivated a remote way of working anyway, substituting face to face meetings with calls/video conferences, etc.

We connect with our team, which is obviously also working from home, twice a day, catching up on the work progress and keeping them motivated. We try to be there for them as this changed work set-up is a challenge for them too. We have been planning and conducting a lot of training and webinars for our clients and plan to do that for investors at large as well. This is the time where certain conversations that never find time on our schedule will take place. We have been evaluating insurance coverages, checking other risk management measures, talking about charity, etc. We intend to use these 21 days in the best possible way and figure out the best way to move past this change and are excited to see what the upcoming times bring for us!

Rahul Agarwal, Founder & Principal Advisor, Advent Financial

I’m largely unaffected by the lock-down barring some minor issues that are miniscule compared to what is happening around us mainly since I was an early adopter of digital transaction platforms and using Zoom for virtual client meetings. It did however make me think about the sheer unpredictability of the future and the kind of unfathomable risks that exist. While a crisis of this kind  could not have been anticipated in advance, it does underscore the importance of contingency planning including basics such as emergency fund, insurance, etc. Going forward, I intend to place an even greater emphasis on this aspect that we tend to overlook in good times.

I am in regular touch with my clients and while they are not completely unfazed by recent events, I have managed to allay their fear, anxiety and concerns regarding their investments. In all fairness, I should admit that, while the sheer velocity and precipitous nature of the market fall has taken me by surprise, I haven’t been caught off-guard. My investment management style is based on the relatively less uttered quote by Warren Buffett, “Only when the tide goes out do you discover who’s been swimming naked.” I firmly believe that as advisors, our primary role is risk management alongside behavioural coaching and not return maximisation. Having a well-defined system of evaluating risks not just at the time of selecting investments but also on an ongoing basis w.r.t. evolving market and economic conditions coupled with a clear asset allocation policy has helped in limiting portfolio drawdown.

I have mandatory investment orientation meetings with clients at the time of onboarding where I explain the risks prevalent in different instruments, asset classes and the typical behavioural pitfalls. This helps in setting the right expectations for the future and makes the job of behaviour management during periods of market turmoil, much easier.

I think clarity of communication is key and most critical during periods of extreme panic. We have to be proactive and instead of the client calling us, we should call them first. I sent updated reports to all clients after the 13% single day fall and explained how I was planning to utilise the market fall by switching from cash to equity. Clients welcome this kind of proactive action and one of them happily texted back stating how she was pleasantly surprised to see her portfolio fall by <50% of the market fall.

I had instructed my team to work from home prior to the mandatory lockdown. They carried their laptops home and used their mobile hotspots for internet. Besides being at different physical locations, nothing much has changed for us, and we are co-ordinating everything over zoom/ phone calls, and Whatsapp. As mentioned previously, my clients are used to virtual meetings which makes my location redundant.

Harshavardhan Bhusari, Founder at FIN PALS & Certified Financial Planner:

Well, my most important problem right now is to avoid undue weight gain till the lock-down lasts! Jokes apart, there is a lull in new prospects and productivity levels are not the highest. Our challenge as advisors right now is not only to keep motivating our clients but also keep ourselves motivated. It however has given me time to revisit all my clients’ portfolios in great detail, and speak to them and soothe their fears. Online platforms have proven to be a boon in these times and are truly the lifeline of our profession. This can be regarded as the most significant contributor allowing the shift from office space to work-from-home!

Clients are not in the best spirits seeing their gains erode away, but I have circulated an article to pacify the clients. It has a bit of history, a bit of behavioral aspects and an appeal to be calm.  It has worked well. Most of them have understood the situation and I have no requests for withdrawal or SIP ceasure. Despite the lock down, we are able to speak to them over the phone and that has helped. It is difficult to say if the clients are in fear or are confident.  I think that this event is part of their process of learnings in equity related investments. We have a role to play here in guiding them through their journey and I’d like to believe I am doing my best.  From my personal experience of 2008, I am sure many investors will come out of the present doom as more confident and willing investors.

Working from home has changed the background score while working from Kishore Kumar’s songs to the music of my kids’ choice-which I don’t understand. I have managed to successfully share desk space with them. I try to work in two shifts of morning and evening with a few hours of leisure in the middle. Needless to say, being at home, these hours tend to get flexible. I think most of us have this challenge.

I thank God that I am in a profession where too much of infrastructure is not needed. One laptop is good enough to run the show.

We sincerely hope that reading this has made some difference in your life. Please do share your stories of inspiration and hope with us!