The single most important success driver for an advisor

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 this article, we explore what we believe is the single most important success driver for an advisor. It's a quality that everybody is keen to possess, yet many struggle to implement consistently. What are the pressures that make you compromise on this vital ingredient of success and how do successful advisors overcome the challenges that many others succumb to?

You can make as long a list of success drivers as you want for a financial advisor - but the one aspect that will always come on top of any list is INTEGRITY.

Why is integrity the most important success driver? You will find reams of material on this, and for every practicing distributor and advisor, it is perhaps self evident. One quip from the world's most successful investor Warren Buffett vividly demonstrates why integrity will always be the most important success driver. Speaking about the qualities he looks for when hiring team members, he said, "In looking for people to hire, look for three qualities: integrity, intelligence, and energy. And if they don't have the first one, the other two will kill you."

What Mr. Buffett said about hiring an employee is equally true about an investor hiring an advisor. No investor would want to entrust his hard earned money to an advisor with loads of intelligence and energy but no integrity.

What is integrity?

There are many textbook definitions of integrity, but perhaps these phrases best capture the essence of what integrity is all about.


Nobody wants to do the wrong thing, yet.....

No financial advisor or distributor in this country or anywhere else in the world gets up in the morning, eagerly looking for how to damage his clients' interests. Yet, our market and all other markets the world over have horror stories of their own about how an RM or a distributor or an advisor mis-sold or mis-represented facts in order to close a sale - a sale that would fetch him a hefty commission on a product that may or may not be in his client's best interests.

While regulators around the world keep looking at introducing newer rules to force integrity in the sales process, we need to perhaps focus more on what causes behaviour that damages client interests. Get to the root of the problem and find ways of addressing the root cause. After all, every advisor will want to be identified by his clients as "Mr.Dependable", but sadly not everybody is seen in that light by investors.

We know that at the root of all that goes wrong in the sales process is a five letter word: MONEY. The issue here is what lies at the core of this desire for money? Is it only pure and simple greed? Perhaps not. For many in this field who are independent, it is more about cost pressures and the desire to maintain a decent standard of living. For those who work for larger organizations, it is target pressures.

The journey to become Mr.Dependable

So, what can one do in these circumstances? Here is what some of India's successful advisors who we have profiled as "Mr.Dependable" say about integrity and how they maintain integrity despite the same challenges that everyone faces.

Vinod Jain, Jain Investment Planner, Mumbai


I know that it does get challenging to always keep client interest above your own, especially when there are so many opportunities to earn quick bucks. One thing we try to do to stay away from this temptation is to focus on our own productivity. Its simple - if you are doing well, if you are productive, the urge to go for that quick buck is a lot less. If you are not very productive, if you are working below potential, the urge for a quick buck is a lot larger. By focusing on our own productivity, we are perhaps able to avoid temptations and are able to always do the right thing for our clients.

Arun Kumar, A K Associates, Bangalore


There can be no denying the fact that a true advisor must always put his client's interests above everything else. We do that, all the time. But, its not as if we don't look at our interests. After all, we are running a business and need to make a reasonable profit. I suppose what has helped us stay away from temptation of high commission products is that we have very little cost pressures. My brother and I are the only two people who manage our firm. We don't have to worry about large salary bills to pay at the end of each month. Not having that pressure makes it a lot easier for us to always do the right thing.

Hemant Rustagi, WiseInvest Advisors, Mumbai


We don't give any targets to any of our RMs. I firmly believe that I cannot say that we will always do the right thing for the client at all times and then turn to my RM and say, "I don't care how you do it, but I want so much of sales from you this month." At the same time, we do want our RMs to be accountable for performance, and we do have a business to run. What my RMs are accountable for is that every one of their clients must be happy with us. If an RM is handling 100 clients, the only thing we track is how well he is serving his 100 clients and how many of them are happy with us. If an RM ensures that he is serving his clients well, he will get referrals from them, and as we know, in this business, a referral from an existing client means 80% of your sales effort is done. I consider every WiseInvest client as my brand ambassador in the market - if we keep them happy, they will give us enough referrals to keep our business running and growing smoothly. So, the way I try to drive performance of my RMs is not how much business they get, but from how many clients they get referrals. If an RM is serving 100 clients and gets referrals from 70, he is doing his job well. That's the way I look at it.

Work on the root cause, and become Mr.Dependable

The message from all these advisors is clear : we are all businessmen, of course money matters. Yet, each has found a way to make the money they desire, without compromising client interests. Whether it is enhancing your own productivity or scrupulously keeping costs under control or driving your team with the right kind of targets - they have found their equilibrium between personal gain and client benefit. Therein lies the solution for all of us : accept that personal gain matters, and then find ways to achieve your own goals without compromising your clients' goals. That's what will make you 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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