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Hemant Rustagi discusses how Wiseinvest Advisors work towards convincing clients to stay invested in SIPs especially in a climate growing in hostility towards them. He explains that while it is a normal reaction to be afraid or anxious when seeing negatives in your valuations, he likes to prepare his clients for unfavourable situations. They don’t start SIPs for new clients until they assign a specific goal. This helps for two reasons – it solidifies the commitment, not just verbally but also in writing where he has clients sign off on the risks of pulling out their money or changing their plans halfway. It also makes it hard for them to exit having committed to a goal even when there might be anxiety during bad periods. He stresses the importance of learning to ignore external factors out of your control, especially the constantly changing political climate.
He shares historical data with his clients to assure them that while they might be experiencing an unfavourable outcome for the first time, it doesn’t necessarily mean history has seen it for the first time and that others haven’t come out of it. “SIP helps you tackle volatility, but don’t think you will never see negatives” he says as he explains the importance of managing client expectations and preparing them right from the start.
It helps to also show a client that over their 2 year SIP, the last 6-8 months have actually worked in their favour which means it’s definitely not the time to pull their money out now. He ends by stressing the importance of teaching your clients to focus on their negatives being lower as compared to the market during bad periods.
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