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This email helped my client and me immensely

Ashish Modani, SLA Financial Solutions, Jaipur

Markets hit a new high after the UP election results. Amidst all the euphoria in the market, I got a mail from my client who was worried about market levels and wanted an URGENT portfolio review to be done. I have a lot of respect for him - he is 65 years old, retired as the CEO of a LARGE firm, has a good understanding of finance, markets, economics etc. His son, who holds a managerial position in an MNC is now also my client. I pondered for a while about how to respond, and then replied to his mail by sharing my thoughts as honestly and candidly as I could. It took me a couple of hours to put my response together as I wanted to ensure I collect my thoughts well and put my point across in an appropriate manner. I received a one line mail from him in response to my rather lengthy mail - thanking me for the sincerity of my advice and my frank and honest approach. To be honest, its not only my client who benefited from this interaction - I did too, since it helped me structure my thoughts and put them down on paper - putting things on paper does wonders to the clarity of one's communication.


I am sure many of my fellow distributors are going through similar exchanges with their clients right now, as markets hit new highs, and as the pros and cons over high valuations vs bright future prospects keep getting debated in media. I am reproducing my email interactions with this client - which I hope will help you in dealing with similar situation that you must be facing.

Client's mail to me

Sub: Urgent portfolio review:

Pl do review my portfolio as well as my son's portfolio and see if I need to change anything? Maybe a good time to sell something which may have underperformed in the past. Stock market being at all-time HIGH, it is the right time I feel, we must do it, if need be. Thanx

My Reply to him

Dear Sir

I would request (heartfelt request) that we should avoid use of the word URGENT when it comes to investments unless the same is necessitated by way of some major changes in PERSONAL LIFE or FINANCIAL GOALS...

Review of portfolio should not be done on account of market movements, honestly I am not doing any review of my own portfolio (this is just to give you more affirmation of my statement and I mean it ).. We do periodic review of portfolio at regular, pre-defined intervals.

As such I don't think, as an advisor, I would be keen on taking any decision based on market movements unless I want you to underperform over longer run.

  1. As far as <son's name> is concerned, he is young and has a long way to go as far as his investment are concerned. . For him to create wealth over a period of time, he will have to stay long and immune to market dynamics. During his investment lifetime, he WILL and he HAS TO (for huge investment success) see loads of ups and down. The more we try to overcome them and make so called SMART moves from market movements, the more we will hurt ourselves in long run. Wealth creation over long run takes place due to inactivity and not activity. I would request you to ask him to directly contact me so that we create a good rapport and understanding.

  2. For your portfolio, you have a balanced portfolio in equity and debt and I don't really think we need to alter the Asset Allocation. Yes, the portfolio in Financial Assets have shrunk and they need to be recouped as you have earlier withdrawn for purchase of your flat after your retirement.

  3. I have reviewed both the portfolios and would urge you to stay put and avoid giving any reaction to market dynamics. I have attached one presentation for your reference (You should never invest in mutual funds). Please see it and then we can speak further if need be.

  4. As regards underperformance, first we need to understand that most investors underperform the overall market by a huge margin.. History suggests that investors don't even make 1/3rd of the overall return which markets offer I am talking of average market and not the best scheme.

  5. Sir, SLA has always tried to do the best for our clients and we by no means are trying to neglect/over-ride your opinion. It is just that we are adding our recommendation based on our experience and studies we have done. At the end, money is yours and you have the veto power.

Please let us know in case we need to discuss further.


CA. Ashish Modani

Advising is like parenting - but with a big difference

I felt happy and vindicated when I received the one line response from him, thanking me for my candid and sincere advice. But beyond happiness, this interaction reinforced for me my core belief that advising is like parenting - but with a big difference. It is like parenting in that our job is to listen carefully, but not always agree, as very often we actually know (from our experience) what is really in our clients' best interests - just as parents do for their children. But it is very different in one aspect - your client has a veto power - its his money after all. Knowing what is right for the client is one thing - putting it across in a manner that they accept your advice and never get offended is the skill we need to hone continuously.


Content is prepared by Wealth Forum and should not be construed as an opinion of HDFC Mutual Fund.

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