Ramayana and the Life of a Financial Advisor

There is a very popular story associated with the epic Ramayan. Ram, Seeta, and Lakshman were sent to the forest as part of the boon that Kaikeyi had asked from Dasharath. Ram was lured by Marich, a Rakshas, appearing as a golden deer. After getting Ram away from the ashram, Marich now cried for help in Ram’s voice. Seeta was very worried and forced Lakshman to go and help Ram. Lakshman was in two minds – whether to go and help his elder brother, who was a very powerful warrior, but apparently in need of help now; or stay with his sister-in-law as instructed by Ram. On Seeta’s insistence, he decided to go and help Ram, but drew a line outside the ashram and requested Seeta not to cross it. This line is famously known as the Lakshman-Rekha. If Seeta crossed, she was unprotected, if she stayed within it, she was safe.

What is this Lakshman-Rekha in a financial advisor’s business? Who is Seeta? Who is Lakshman?

Well, in a financial advisory business, Seeta is the investor and Lakshman the financial advisor. The Lakshman-Rekha is the “investment plan”. Lakshman is always subordinate to Seeta. He cannot direct her. He cannot enforce any decision. He can only request her. It is always up to Seeta to take the decisions and the actions.

He can protect Seeta when he is around. In order to protect her in his absence, he can only draw a Lakshman-Rekha and request Seeta not to cross it.

The financial advisor can draw out a plan that can work as a Lakshman-Rekha. It can protect Seeta, the investor so long as she remains inside the boundaries. She is safe within the plan but may get into trouble if she goes out. There is enough number of Ravans out there.

While anyone can draw a line around Seeta’s ashram, only a Lakshman, who is really capable can draw a Lakshman-Rekha that can protect Seeta from all possible threats.

This is the significance of an investment plan in an investor’s life. A proper investment plan has the potential to act as a Lakshman-Rekha for the investor.

Now, let us get back to Ramayan. What happened to Seeta when she crossed the Lakshman-Rekha? And more importantly, why did she cross it?

Let us address the second question first.

She decided to cross the line when her beliefs – that an atithi (a guest) cannot go away empty-handed, the pressure from the atithi (Ravan dressed as one), and the innocent appearance of a poor Brahmin atithi got the better of the instructions given by Lakshman. She decides to ignore why Lakshman had drawn the lines. Investors often get tempted by either their own beliefs, or the pressure from the Ravans of our world, or the apparently innocent investment options (promise of high to decent returns with no risk at all). After all, Ravan appeared to carry no risk at all, and Seeta saw serving a Brahmin guest as a risk-free opportunity. And she crosses the line.

Many of the mistakes are a result of preconceived notions (or beliefs), or external pressure or the inability to see the danger.

The second question is: What happened after Seeta crossed the line?

Well, we all know that. She got into a serious trouble and this event resulted in the fierce war between the armies of Ram and Ravan.

Let us give a twist to the story of Ramayan. Imagine that the mendicant that arrived at her door was not Ravan but a genuine Rishi. In such a case, crossing the line would still not have put Seeta into any danger. Yet, it is only fair to say that she took the risk. She put her life in danger. Very often, investors cross the line – they get into investments they do not understand, or they concentrate their investments, or take leveraged positions and still do not get into trouble. They assume that there was no danger and that Lakshman, the investment advisor was not right in putting so many restrictions.

But then, Lakshman has to do his job. So keep preparing the investment plans, keep cautioning your clients, since that is only within your control and nothing beyond that.

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