Last Updated on December 28, 2021 at 6:31 pm
SEBI registered investment advisor Sukhvinder Sidhu shares his journey: from bank branch manager to following his passion and his struggle in establishing himself as a fee-only financial planner. Sukhvinder is a man of unwavering principles who strongly believe in unbiased, affordable and commission-free financial planning advice to families. In spite of his early difficulties and in spite of seeing commision-based planning thrive, he has stuck to his guns. I am delighted that it is finally paying dividends. This is the second fee-only advisor journey featured. The first was Melvin Joseph’s determined struggle to the top.
During the launch of Fee-only India: the launch of a movement to serve investors and advisors. Sukvinder talked about how he approaches clients and gets them comfortable and aware of their finances and only them initiates talk of goal-based investing. Many would like his friendly “no-airs” approach.
Sukhvinder has been part of my fee-only financial list right from the start (2013) and I am proud to be associated with an honourable and ethical person like him.
When I was short of a speaker for the 1st Delhi DIY meet, in March 2015, he readily agreed to speak on short notice.
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Sukhvinder Sidhu’s guest post:
Illustration: Financial Plan Creation for Rajeev Goswami
Update: Mint featured how his clients got benefited: With a planner, we got a realistic view of our finances and goals Warning: Media does not differentiate between fee-only and commission based planners. So excercise caution while reading such stories. Of course Sukhvinder is pure fee-only.
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My Journey as Financial Planner Goes On
My career started in 1991 when out of a need to earn my living, I got a banking job as clerk-cum-cashier, posted in a village in Gurgaon district. My last posting was in Nagpur, where based on my work as Foreign Exchange In-charge, higher authorities appointed me as Manager of an independent branch. I left bank service in April 2012 by requesting an early retirement.
My Choice of Being a Financial Planner
Life has been a great teacher. Amongst many other things, I learnt that I should do what I wish to do. Though I enjoyed my banking career and worked hard there, I had always wanted to be an independent professional so that I could excel in the work I do and get the best job satisfaction. I always felt a need to provide service to customer better than what he was actually receiving in front of me.
The choice of financial planning as my career was based on my liking to deal with people and affect their lives positively. I applied for the CFP course with FPSB India in Jan 2007 when I was posted as a bank officer in Surat. Before that, in Dec 2006, I still remember, I had phoned few of the then famous CFP practitioners to know about this working line. They had all motivated me then by telling the positive things. Or, did I catch only the positive things? Cannot say now. One colleague in the bank had once pointed to me that I see only positive things first, whereas he was of the view that one should see the negatives first.
I completed all CFP modules except the last one in 2007. The Advanced Financial Planning module required better understanding and practice, for which there was no material with me. So, I started travelling from Surat, my place of posting, to Mumbai on weekends for coaching. I could then complete my CFP course in March 2009. This course totally changed my outlook towards personal finance – from the position of a common man to that of a professional.
After I had applied for an early retirement from the bank job, my Chief used to ask me daily in the morning about what would happen of my children; he used to feel so much concerned about my future life. But I did not have an iota of doubt in my mind; my destiny had been calling me for quite long to leave the job. I had waited for the completion of 20 years service to become eligible for the pension. The new pay settlement was just 7 months ahead, that would have further increased my pension amount. But I could not wait any longer; time seemed to me that precious.
My First Year of Practice
When I left my bank job, I did not have any future plan. Nor had I done anything before retirement towards setting my financial planning practice. I just knew I have to make people’s financial plans; I just had fallen in love with financial planning. But it was not going to be easy, I realised later.
I first thought I would join some financial planning firm. In fact, I applied for a job in one such firm. But it was refused with the reason that they need only a young person whom they could groom as per their requirement. For the first time in my life someone had indirectly told me I was not young. In bank job, I had always been young. Even after 20 years of service I was the youngest in the branch of my last posting.
That refusal immediately resulted in me knowing that there was then no other way than to start on my own. Running my own business was the last thing I would have liked to do at that time or ever before. But today I am thankful to God I was refused the job in that firm, otherwise today I may not have been one of the pioneers of fee-only planning in India.
Good or bad, I had always been sure of what I did in life. Now also I was sure. So I had decided to name my practice first. Named it IntelliPlan, only to find 6 months later that it was owned by someone else in Delhi. I felt very sad as I had built a lot of matter in my website by then after purchasing this domain name. But having learnt a real lesson, I thought to start again and burnt midnight oil to re-built my website after selecting a new distinct name – FinlifeCare Solutions. The website vendor, whom I had fully paid, had not done the work to my satisfaction, which led me to do the WordPress work on my own, learning its nitty-gritty online.
My first year was totally dedicated to planning my practice, building a website and deciding the new location. I searched online for different practice models being followed globally. I collected few inputs from different web-sources and devised my new practice model, though I did not know at that time that I was actually starting for myself what is popularly called fee-only practice. I started with this model as I found it to support pure financial planning profession, in other words, to provide unbiased plans.
Where to settle was a big question in my first year. I prolonged my stay in Nagpur for it, considered various cities in India with an open mind, but in the end favoured the decision based on my family welfare. I decided to locate my business in a smaller city – Karnal. The family should be comfortable; clients to serve to exist everywhere, I believed.
Getting Clients for Financial Planning
Having never been in a sales job, I did not know how to approach someone for their financial planning. In the bank, I had only seen customers visiting branches to get service. I tried few times but did not get any success. Then one neighbour agreed to get his financial plan prepared for free, after listening to me about my new work. I felt happy, as he also promised to get few of his colleagues from the place where he worked. But the next morning, I got up to know he has stepped back as his wife was against it!
I started getting clients from 2nd year onwards. I was quite happy to get my first client; the initial success made my eyes wet. I learnt a few things from my first client. Client’s faith in financial planning and proper communication on his/her part is essential for my work. These things lacked in him and that’s why he has not been with me after his first plan was prepared.
My 2nd client gave me a real experience. He asked a lot of questions via email, and that was what I had wanted. The result of the intense communication was that our mutual experience with his planning exercise was highly satisfactory, and he became my permanent client.
Being Part of Fee-only India
I had always wanted to be with a body of professionals in my line, but the same did not materialise as I always felt lonely amongst the vast majority of advisors whose business model was primarily based on commissions. One good day in early 2013, I received an email from Mr. Pattabiramam Murari asking me if I knew anyone else in my area who worked only on fees. Neither could I give him a positive reply, nor had I realised at that time the significance of what he was up to. Today I feel very lucky to be in the elite Freefincal list of fee-only planners and a part of FOI. I feel very good to have started with what I wished to, choosing the right professional model. We as members of FOI feel like friends when we interact with each other online or when we physically meet each other. I look forward to FOI becoming a dynamic body contributing to good knowledge sharing and professional development, in the interest of both advisor members and investors.
Getting Registered as Investment Adviser with SEBI
The Investment Advisers Regulations of 2013 gave planners like me a real recognition, as we were already following these regulations in spirit. I immediately applied for the registration. My CFP certification, Certified Associate of Indian Institute of Banking and Finance (CAIIB) qualification and my experience in advising third-party products in bank supported my application. Though the curriculum of CAIIB is quite diverse and the official in Delhi accepted the knowledge part of it, somehow it was not technically fitting well into the criteria of registration. I came to know that if I had been an agent with an insurance company, I would have been better eligible for the registration. But I did not step back and continued with correspondence with all the right logic that I could provide. My application was then sent to Mumbai head office where it was finally accepted and I got the registration in March 2014.
Building Financial Planning Process and Getting Right Tools
Thanks to NetworkFP which gave me a good start in preparing plans in a comprehensive way through the use of an Excel program in a 3-day training program in Mumbai in April 2012. But that was not sufficient. As most of the knowledge stuff and discussions in India were built around sales dominated business, I knew, to build my financial planning process, I will have to innovate myself based on my own experience and understanding from some good articles by few writers from US and other countries.
As preparation of the financial plan and reviewing the same is my specialization, I wanted the planning process to be the best possible. I believed, to provide maximum benefit to the investor, the process should be built around her, with due interactions and discussions at required steps during the process. The data collection should be accurate; the alternate goals’ scenarios should be developed and discussed, the most favourable one included in the plan… All this resulted in a process lengthier than what is normally followed. After this my focus shifted to streamlining it to make it more efficient in time, keeping with the same quality. And this was possible only with right tools and software.
A lot of my time has been used in searching for right tools and software to support my practice. I also checked few of the global software. I was the first Indian planner to subscribe to a good data collection/ financial profile setting software used in western countries and got the INR included with the previously used 5 global currencies. The tool did not work well for me and I had to leave it after using it for just 2 months. After 3-4 years of struggle in this direction and few failures, I am now satisfied to have the right tools to help me in all aspects of my financial planning process – CRM, Financial Planning, Portfolio Management and Investment Research.
Planning fee has been another hot issue to which I have devoted a good time. Many fee models were developed, tested and replaced; the objective always remained to keep the planning fee affordable and equitable for the clients and also have it right to support the long-term growth of my practice. Keeping the door open for low-income families, with a lower fee charged to them, has also been a challenge. A suitable, objective fee-structure has finally been set.
Today I have about 50 families as satisfied clients of my comprehensive financial planning service. The journey till now has been as expected – slow start and laying down a solid foundation for the long race. Now I feel the need to have a small team to take my financial planning practice ahead.
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Also read: Fee-only Advisor Journey: Melvin Joseph’s determined struggle to the top
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