Mr.Dependable 1st June 2014
4 pillars of dependability

imgbd What makes an investor choose an advisor or a money manager and stick with him through the rollercoaster ride that markets take him on? What begets trust in the eyes of an investor? A simple one word answer : dependability. Mr.Dependable - a joint initiative between Religare Invesco and Wealth Forum - aims to help you explore all the dimensions of what it takes to be seen by investors as Mr.Dependable, and thus build your financial advisory practice on a robust foundation of trust. After all, dependability is finally what money management is all about.

In the inaugural article of this series, we will introduce the 4 pillars of dependability, each of which will be discussed in greater detail in subsequent articles.

Every fiduciary business yearns to be implicitly trusted by its clients. Every fund manager wishes to be trusted by investors. Every financial advisor wishes to be trusted by his or her clients. Trust is the foundation on which successful money management businesses are built.

How do you earn your clients trust?

Trust does not happen overnight. Trust does not happen based on a glitzy sales pitch. Trust is earned over time, through actions more than words. There are many facets to becoming trust-worthy - some are about your character and others are about the way you conduct yourself. In the context of the money management business (which includes fund management as well as advisory), trust is about being seen as dependable, being seen as reliable. It is only when you are seen as dependable and reliable, that an investor will invest his hard earned money where you advise him to. It therefore follows that in order to win the trust of investors, the quality that all money managers need to work on most is being seen as dependable.

Trust does not mean highest returns

When an investor trusts you, it does not necessarily mean that he believes you will give him the best returns possible on his money. It means that he believes you will do all within your command to invest his money in the most prudent manner, just as you would have done with your own hard earned money. It means that you will do your homework well each time you recommend any investment to him. It means you will track his portfolio consistently through all the market ups and downs. It means you will promptly suggest course corrections that you think are necessary. It means that you will always be accessible to him anytime he needs any inputs on his financial situation and plans. It means you will offer him advice only in his best interests and not be guided by any other considerations. If you are doing all of this, you have become a dependable ally for your client in helping him navigate the financial journey of his life.

4 pillars of dependability

So, what specifically must one work on to become this dependable and indispensible advisor to your clients? There are, in our view, four important pillars of dependability :

Consistency - demonstrating consistency in your deeds and actions, through various market phases. Consistency begets credibility and credibility begets trust. Challenging times are when consistency of actions get sorely tested. Your ability to stay on course - whether it be the broad financial plan you agreed on, or down to execution consistency of reviewing portfolios at the frequency agreed and sending portfolio information on schedule every time - all of these actions, big and small, add to the confidence of your clients in the consistency of your advice and service delivery.

Integrity - being absolutely and uncompromisingly honest and transparent in all your dealings with your clients. Always putting their interests above your own. Always doing what is right for them, even when you know there are situations where you can get away without doing so. Upholding business ethics as an uncompromising way of life. Putting yourself in a position where your clients will take your word at face value, every time.

Responsiveness - always being there for your clients, whenever they need you. Always responding to their requests promptly, even if you are not always able to resolve all issues immediately. Always making it a point to reach out to them more during periods of market volatility, and giving them the much needed reassurance during trying times. Communicating turn around times for all your deliverables and sticking to them at all times.

Diligence - doing your homework carefully, before making any investment recommendation to your clients. Never getting swayed by sales pitches, but insisting on applying your independent mind before coming to any conclusions on investment opportunities. Asking product providers all the questions to satisfying yourself about the products, as if it was your own money that is being invested. Monitoring portfolios regularly and acting proactively and promptly to ensure that they are in tune with changing times. Being watchful and diligent about your client's money, as if it were your own.

In this series of articles, we will explore each of these 4 pillars in greater detail and showcase ways in which you can develop and strengthen each of these pillars, thus putting yourself on the road to becoming Mr.Dependable.

All content in Mr.Dependable is created by Wealth Forum and should not be construed as views of Religare Invesco MF.

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