Most people tend to have a complicated relationship with money. They perennially want more of it but are seldom able to multiply it to the levels that they desire. The average individual has always found financial planning and investing to be a bit of a complicated task. Adding further to his woes is the shifting investment landscape where competition seems to be intensifying while the corresponding gains seem to be getting slimmer.
In such an environment, individuals need a trusted financial advisor. Someone who can handhold her through the investment quagmire and can be relied upon for honest and informed financial advice. However, the Indian investor has become savvy and more aware of his needs. Consequently, he has come to demand excellence is all aspects of his life, especially in planning his investments.
What does an investor value in a financial advisor?
The relationship between a client and an advisor is built on a bedrock of mutual trust and respect. Trust that the advisor will give advice that is in the best interest of the client and that the client will honestly share his financial status, goals and aspirations with the advisor. A client and his advisor will often spend hours together, discussing the clients’ financial needs, return requirements and risk profile. Basis these inputs, the advisor will suggest a financial plan that can meet the clients return requirements while adhering to his/her risk constraints. Now, this financial plan will only be executed if the client trusts the advisor’s recommendations. If he chooses not to implement those recommendations, then the whole relationship is moot.
One of the pillars of effective financial planning is objective and independent financial advice. When making investment recommendations, a financial planner should objectively assess a client’s idiosyncratic needs and then choose the most suitable investments. She should not be influenced by other factors like product commissions or let their own personal biases come in the way of their recommendations.
The investment process is complete only when it has been bought/sold and the monetary transfer is completed. Due to the implosion of digital solutions and the ease that technology brings to our everyday lives, clients want to have a seamless and efficient investment experience. A good advisor is expected to be able to optimally leverage technology in order to facilitate transacting and make investing simple and easy.
Along with the changing investment landscape, the needs of the client are also always changing. However, there are certain attributes that continue to command a premium over time. Advisors would do well to incorporate some of these.