The Easiest Way to Communicate the Importance of Hiring ‘YOU’

One of the challenges which most financial planners face is effectively communicating the importance of hiring a planner. The common conception about the financial planners is that they prepare the plan and create the road-map for the client to reach their financial goals using the complex mathematical formulas or with the help of sophisticated tools like excel or software. According to me the actual job of financial planner begins once the plan is prepared and implemented.  To keep the client on the right track by managing client’s emotional mood swings caused by the volatility into the financial market and making sure that emotions like greed, fear and envy don’t over power the logic when it comes to managing the finance is the crucial job of financial planner.

The role of financial planner into the life of the client is more of friend, philosopher and guide rather than just creating the plan.  Most of the planners fail in explaining the client their role and mostly leave the client with the impression that their job is limited to the creation of plan using the sophisticated calculators and software. Explaining the client about the planner’s role post creation and implementation of plan is a crucial aspect of planner’s job. This can be done through the effective communication which can help client connect and visualize the role of financial planner clearly over and above just the one creating the plan.

When it comes to effective communication nothing can be better than “story telling” and using some well known stories based on widely known historical events to correlate them with central message you want to deliver. I would like to quote the incident from the war of Kurukshetra which financial planner can use to explain the importance of the financial planners role to clients and which I like call as the “Krishna Impact”

War of Kurukshetra

The great war of Kurukshetra is believed to be happened between the Kauravas and Pandavas in 3139 BC i.e. almost more than 5000 years ago. In the conflict between the Kauravas and the Pandavas, the Kauravas were utterly destroyed, while the Pandavas were victorious. Though the Krishna decided not to fight himself and was there as a charioteer of Arjuna during the war, but it is a very well known fact that the Victory of Pandavas was impossible without Krishna being on their side as a friend, philosopher and guide.

Krishna guided Pandavas and help Arjuna to come out of the emotional dilemma which overpowered his mind as he was suppose to fight with the friends and relatives. It is evident from many incidents from the Kurukshetra war that no matter how great warrior you are, you still need the friend who can guide you about the right course of action during the various stages of winning the war.

Similarly I believe for winning a money game also, any investor needs Independent financial advisor or planner who can act as a friend, philosopher and guide and who can show the investor right path towards financial freedom.  In investor’s life also come many such incidents where rather than knowledge and tools he needs the right kind of guidance and strategy to take the right decisions in different situations.

While financial markets start behaving on either extreme, it is very difficult for any investor to take the rational decision on their investment portfolio.  No matter how many financial calculators he carries in his laptop or desktop, they may not help investors to manage his/her own emotions and take the logical decision.

Strategy vs. weapons: fighting the most dangerous enemy

Though the Pandavas had a good army and they themselves were a great warrior but having the army and powerful skills to fight alone, would have not been sufficient enough to win the war. There were many instances in Kurukshetra where in absence of Krishna at Pandava’s side would have resulted in their defeat.

There were many powerful warriors at other side including Bhishma, Dronacharya – the guru of Pandavas and Karna who could have changed the result of the war, had Krishna not planned the strategies to kill them. He used deceit to kill most of the great warriors, such as Bhishma and Dronacharya and even the Karna who was considered to be greater and more powerful warrior than Arjuna.

Similarly in the world of investing, emotions are the greatest and most dangerous enemy of investors. Greed becoming the main guiding factor at the peak of every bull market and Fear becoming the main guiding factor at the bottom of every bear market is the primary reason of failure of any investment plan among investors across the globe. These two emotions are so powerful that even if Investor has all the tools and templates to create the financial plan, they will persuade investor not to follow through on the plan. Good financial advisor can help investor in not only creating the plan but will also help him/her in defeating these strong enemies called “Greed” and “Fear” with constant guidance and wisdom.

Emotion overpowering actions

There was a time when Arjuna was totally under a dilemma. He became bewildered upon seeing people he loved and respected are ready to battle against him. At a time he mentally gave up the war seeing his friends, cousins, relatives and teachers as he was not ready to fight with them or kill any of them.

Sri Krishna removed the Maaya that engulfed Arjuna and made him sad, and nervous.  Krishna preached Karma Yoga, Gnaana Yoga and Bhakti yoga and finally had shown his ViswaRoopam, to make Arjuna understand who Krishna is. That way he removed the illusion or Maaya that was covering Arjuna. Arjuna realised what is what and, after that, he fought the war with full vigor and with complete devotion to Krishna and finally won the war.

Similarly emotions like grief, sadness, envy, fear may sometimes make investor indecisive due to lots of ups and down in his/her personal as well as financial life resulting into inaction into the portfolio when it is required the most.  A good financial Advisor can help investor in taking the action at the time when it is needed the most even if investor is emotionally not ready to take the action.  He can do so by sharing his wisdom and experience and making the client visualize the bigger picture rather than getting affected by short term hiccups.

I feel financial calculator or tool alone can’t motivate any individual to act. They surely can help in creating and designing the plan. But, Creating the action plan and to take the action are two different things.

Biggest Mistake of Duryodhana

There is a very interesting incident before the war of Kurukshetra started. In the war of Kurukshetra, the Narayani Sena was a big threat to Duryodhana; hence Shakuni asked Duryodhana to go to Lord Krishna and asked him not to field his Narayani Sena against him into the war. With the war imminent both Duryodhana and Arjuna went to seek the support from the Krishna. Krishna found it as an obligation to support both during the course of war as he was related to both, although his heart always went for the Pandavas.

Krishna gave them options and said that each one of them can chose either him or his Narayani Sena which was a group of  a million war ready Yadav soldiers to side them into the war. Duryodhana choose the Narayani Sena thinking that the million seasoned solders is all it takes to war while on other hand Arjuna chose Krishna who decided not to fight himself but only to act as a charioteer of Arjuna and lead him into the battle.I think choosing the Narayani Sena over Krishana was one of the biggest mistake of Duryodhaa.

What do you think would have been the result, had the Arjuna chosen the Narayani Sena thinking that Krishna is anyways not going to fight himself? Krishna acted more as a coach to Pandavas rather than just charioteer.

Importance of having coach

Most of us know what to do when it comes to any area of our life. We know the regular exercise and balanced diet can keep you healthy. There are lots of books and material available on the internet on how to stay fit and being healthy, then why most of us don’t have those six pack abs and good physics just like good sport person and Bollywood actors?  We all know what to do to create those kinds of physics and if we don’t know we can get this information through thousands of FREE videos available on YouTube.

In spite of having tons of information available about what to do, only those who hire the professional coach or those who join some fitness club, creates the good physics. In both the cases they will have a coach who would motivate them on regular basis to take the actions which are required and will also see to it that we follow through on our plan.

Having tons of data and information on financial planning and investment products may be of little use if investor don’t have the enough emotional intelligence to manage own emotion and stick to the logical roadmap without getting affected by the short term market movements. Most of the investors when it comes to managing their own money fail due to lack of emotional intelligence. A Good financial planner can help by constantly guiding him and being on his side to help him understand the logic and ignore the emotion.

 A Message to Financial Planners

The planner who can successfully communicate the importance of having a coach to win the money game by using anologies like the “Krishna Impact” or a Gym Coach and also focuses on delivering the value beyond just creating a plan will surely win the client’s loyalty without any doubt. Failing in explaining the importance of coach or acting as one will surely motivate clients to DIY mode of planning by using the lots of free financial calculators, templates and tools available online.

Authored by,

Jigar Parekh

Head – Training – Prudent CAS Ltd

Ahmedabad

---