Here are a few unsolicited money saving tips for financial advisers. Most of my posts are unsolicited, but considering how many in the financial services community feel about me, it seems particularly befitting to refer to this post as one.
Much of what follows stems from experience (not from providing financial advisory though).
1. Do not buy a website, or related web services for online presence or branding.
Yes, an online presence is crucial these days. You don't need a 'professional looking website'. You just need a blog.
You can get it from a free WordPress or Blogspot blog
Update it frequently and showcase your competence. Go beyond the usual power of compounding crap. Provide detailed analysis and perspective. You will soon get clients.
Ready made websites look good but are not optimized in terms of speed and design. They will not offer you any kind of visibility. You need to blog for that.
2. Do not buy financial planning software!
Learn Excel if you already have it, or use something like open office. That is all you need for creating a financial plan. You can freely create a custom plan without the constraints of FP software.
3 Do not waste paper and print toner!
No client is going to read through a 25-page financial plan. They just want to know what to do next. All you need is few pages: one for the agreement+ disclaimer and one (okay a couple) for a set of specific action items for implementation.
In fact, I think giving them one task per week to complete and ensuring that it it completed will be even more effective.
If you give them a 25-page plan, they will send it to Ashal Jauhari for a second opinion!
4 Buy cost-effective portfolio tracking solutions.
Something like Mprofit advisor is extremely cheap (must be better ones available). A single client could pay for the 500 or even the 1000 portfolio package for a year! Whats more, you can effectively track direct mutual fund plans with them
5 Should you waste your money registering for 'build your business' seminars?
You will only help build their business! Success in financial advisory comes with competence.
(A) Competent understanding of the requirements of a financial goal and associated investment risk.
(B) Competent understanding of client behaviour.
(A) requires clarity and only math (the language of nature) offers it best. I have my own doubts reg. the mathematical rigour behind advisory certifications (based on inputs received)
(B) can be developed with experience
The secret to building your business is simple: showcase your competence rigorously and frequently with a strong online presence. Only you can help yourself in this regard.
6 Why take up expensive certifications?
The regulator (SEBI) does not care about the chest thumping by CFPs (certified financial planners). In fact when they announced the registered investment adviser regulations, CFP was not even recognised!
The Investment Adviser Certification Examination-1 (IACE-1) and Investment Adviser Certification Examination -2 (IACE-2) are more cost-effective but less rigorous solutions (thanks to inputs at AIFW).
If I wanted to become an investment adviser today, why should I spend more money and time getting a CFP when it is so much easier to get the IACE certifications?
Don't believe the hype about CFP. Clients are impressed by honesty and competence more than fancy degrees.
Success is governed by innovation and competence. Both of them do not depend on marks or degrees! You need to seek them out independently.
7 Use freefincal.com
Now I sound like Subra! Hey, the stuff here is free. Use it, adapt it at will, offer feedback so that it can be improved further. Don't forget to share them with your colleagues.
Ps. If you want to indulge in some pattu-bashing, please be sure to mention freefincal.com. No such thing as bad publicity 😉