I have come to hate the word “Nascent”. That is one of the ridiculous terms associated with Financial Advisory/Planning industry. How long are we going to call ourselves nascent? When are we going to grow up and be “Established”?

The answer to that lies inside our minds. Many of us have decided that it is too difficult to charge a fee, client will not see value and hence advisories will not work! I hear this lot from those in the profession. I hear this from the podiums – recent one being when I went to Kolkata to Network FP Knowledge Conclave.

If that is our conviction, is it any surprise that most end up selling products, managing them and calling it wealth management! This is very convenient as the revenues comes by way of product sales. The client does not have any problem in this indirect remuneration mechanism.

Why should the client pay? 

The client will pay if s/he sees the possibility of getting value equivalent or in excess of what s/he is paying.  The problem in most cases hence is that, the clients don’t see value in the advice rendered. Or they think that it should come free.

Who is going to change that? We will have to do that. We need to ask ourselves – What is our proposition and why should the client care?  Most models of financial advice start and end with a plan. If everyone is offering that, what is different in your offering?

Besides, most people are not looking for your confounded plan! They want solutions to simple, niggling problems… like, do I bring down my EMI by prepaying my home loan or which insurance policy should I consider for the medical insurance for my parents etc.

While financial planners/ advisors do claim to offer goal based advice which should probably address this, they may ask for too much information & insist on planning for a goal rather than advising on specific problem areas. Instinctively we militate against piecemeal advice.

But that has a place too and can be a profitable business.

Enter, Atomic Advice Model

We are all too aware of the medical profession. When you go to the doctor with fever, he asks a few basic questions, does some examination and prescribes certain medicines, with probably a follow-up visit after a few days. The doctor charges a small fee and the engagement is concluded in anything between 5-15 minutes.

There is a huge groundswell of demand for basic engagement & financial advice if it is made available at an accessible fee. People have many problems and questions for which they want answers, but there is no one to turn to. The people they consult currently are bank personnel, insurance agents, CAs, distributors etc., who are neither fully qualified to advice and/or have a vested interest.

If this works well for doctors, why cannot it work for financial advisors, who pride on calling themselves financial doctors? In fact the parallels are many, apart from the name. Both professions have serious implications for the patient – health & wealth. In fact, we have even more impact on our clients, as lack of wealth can impact health too!

How will this model work?

A financial advisor ( you ) sets up ‘The Money Doctor’ Clinic, just as a doctor sets it up in the neighborhood. Just like the doctor’s clinic, the client comes to you with an appointment. You would understand the client’s problem and gather appropriate information. If possible, you will crunch the numbers then and there and give a solution; else, the client would have to come for one more session, later. In some cases, number crunching may not be required and advice can be offered based on our experience & accumulated knowledge itself. This will require just one session. In some cases, it may just be cases of checking if their decisions are right – a second opinion from an expert.

Being RIA Compliant

This model has the potential to be fully RIA compliant. It should be made known that first time clients would first have to come in with their case history/ investments. They also need to bring copy of KYC documents – PAN, address proof.  If deemed necessary, risk profiling can be done. The logic of the recommendation to the clients can be conveyed and the entire session can be recorded. That’s it!

Getting the client in

All that I have mentioned sounds great – but how does the client know about you and come to you?  Whatever model you operate on, you will need to find clients. So, in that sense, there is nothing different here. Plus, once you establish yourself in an area, word of mouth will take over and the practice will start doing really well. This is how it would work for a Doctor.

In the initial period, the doctor would find a trickle of patients. But slowly it would build into a flood. Once, the practice is built, it goes on forever. Would you not want a practice where you build now and after that it sustains itself?  It’s an attractive proposition, you’ll agree.

Promoting your business

Why not stretch yourself now by conducting awareness sessions in societies, parent-teachers meeting in schools, clubs, social gatherings etc. Why not advertise in local publications/magazines? Put in inserts in newspapers, in your neighborhood. Pro-bono work for worthy members of the society (like teachers, postmen, employees of small businesses in the area etc. ), to create a buzz about your practice.

Use the location based services from Google and other service providers, to be visible when people are looking for your service. Using social media to create awareness and build traffic.

Locate your office near / next to a good doctor (or other professional) to ensure that there is a steady stream of people who are constantly exposed to your new service. These are some of the top-of-the-mind ways by which you could popularize your service.

Advantage Atomic Advice Model

This is a model crying for adoption. The advantage today is that there is just no one in this model. You could be the pioneer who would start it all – The Atomic Guru, if you will! Going one step further, once the proof of concept is established, you can make this into a complete proposition for adoption, which can be franchised!

The potential is enormous.  You can keep talking about the market being nascent… or go ahead and create your niche and be counted. You decide whether you want to be an Atomic He-man / Atomic Cat-woman or want to sit on the sidelines and fret about the Nascent stage, 10 years down the line. The choice is yours!

 

Authored by,

 

Suresh Sadagopan

Founder

Ladder7 Financial Advisories

Mumbai

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