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Advisor Spotlight
The most powerful tool for advisors is to understand their business- It is the data generated by the business
Ms Shifali Satsangee

Ms. Shifali Satsangee of Funds Vedaa, a proactive advisor, who believes in being agile and that change is the only constant. Not only that, she has the clarity about the profession which is only insightful and a must read for every advisor. Mutual Fund Live welcomes the year with these simple yet powerful thoughts
MF Live: An Advisors profession necessarily revolves around four broad functions:

i) Product Research 
ii) Sales & Marketing 
iii) Client Relationships 
iv) Technologically enabled

The above are nothing but a break up of the entrepreneurial function of an advisor. How do you discipline yourself to manage this all and how have you placed yourself in terms of technology?

Shifali Satsangee: Decoding our business model- It is more of an entrepreneur than of an advisor. We follow a client centric approach by aligning ourselves to client requirements and needs.

While managing an advisory business we need to handle multiple tasks, as you mentioned ,all while serving existing clientele with ongoing updates and prospecting for new clients.

Product Research- We are in the process of evaluating our options for better Fund research tools and Advisor workstations for strong data analytics, planning and strategy simulation models, product research, report generation and for qualitative and quantitative data research. 

Sales & Marketing- We create brand equity by organizing financial wellness programs via IAPs, sponsoring events that support good causes, writing articles for websites and earn visibility. As part of our CSR and a step towards promoting financial literacy, we conduct financial awareness programs in Universities to teachers and students alike, which serve the dual purpose of financial inclusion and also enhances our chances of adding new clientele to our firm via sub conscious takeaways.

Client Relationships- To deepen our client engagement, during interactions we not only focus on Objective data but stress more on Subjective data of the clients(life history, attitude, values, thoughts , dreams, financial philosophy, fears, concerns, what is important to them, their definition of risk etc), which helps us gauge the clients priorities and helps us to integrate and weave their goals into financial plans.

Technology- We have built  a strong moat by investing in innovative technology solutions and setting the stage for the future by being well-equipped with strong back end infrastructure in the form of a comprehensive wealth management software for indepth reporting, CRM and business analytics (by which I mean that the most powerful tool we have to understand our business- is the data generated by the business. The data can tell you where the business is most efficient (its strengths) and where it needs improvements. All you have to do is unlock business analytics for generation of incremental business.

We also have provided our respected clientele with a Wealth-E Desk wherein they have online access to their portfolios. This lends an element of transparency and client empowerment. We kept our business model in sync with changing times by blending human interaction with online interface. 

We are in the process of developing our own mobile application for clients on the move.

MF Live: With online trend budding in the MF space, how can advisors enable themselves to convert this trend in their favour? How in future do you think is technology going to change things the way an IFA works now? What technology adaptation is imperative for any IFA?

Shifali Satsangee: The Wealth management space has been witnessing revolutionary changes in the form of technological advancements- whether in terms of the advent of digitized advisors/ robo-advisors, or the introduction of online transaction platforms or in the form of employing software’s for data processing, financial planning, investment management and reporting. Technology is permeating the advisory and distribution ecosystem on various fronts. As advisors, we need to adapt to what we see, as the “bionic” future and leverage technology to enable us to work smarter, faster and more efficiently in a seamless fashion. Technology is already a game changer and a synergy of technology, software and investment management will further enhance our capabilities. 

An advisor can integrate technology to the business in the following ways:

• Key up to handle an expanding client base by being well-provisioned with good back-end infrastructure in the form of software, CRM systems, business intelligence systems and adopting online transaction platforms. There are cloud based solutions which are cost effective, less time consuming, convenient and accurate.

• Empower your clientele by enabling them to access to their portfolios online 24/7 via a dedicated Online Wealth E-desk and your own mobile based application. This not only lends transparency but also enhances their faith in us.

MF Live: What is your view on the MF advisory space and the industry penetration? What will be the dampener and the booster for the advisors?

Shifali Satsangee: We are witnessing a disruption and huge transformation in the Indian asset management ecosystem, in terms of Technology (Omni-channel advisory) as well as ongoing regulatory changes (transition from MFD to RIA, Introduction of Direct plans, Commission capping, Commission disclosure in CAS) to name a few.  To navigate and adapt to these advancements , we need to get future ready. The only constant in the world is change. And the only mode of survival is adapting oneself to these changes. 

We are an emerging economy and our industry is at a nascent stage while in the developed economies, it is already accepted as a serious profession. Ours is a very fragmented industry at present, and we are in the process of evolving into a more mature industry. Post the 2008 financial crisis, the industry has shifted from being opaque in terms of the pricing and products offered to a new paradigm in terms of more transparency and more of an open-architecture approach. Talking about the levels of awareness on financial planning, I think that awareness levels are certainly limited and markets are underpenetrated, especially in territories where I operate. Acceptability of financial planning with fees is limited. AMCs and regulators can play a much larger role in increasing the awareness around financial planning.

We at Funds Ve’daa, are optimistic even while the regulatory changes are ongoing, by firmly believing that India being an emerging economy, wherein the investible surplus still are routed to traditional instruments (like bank FDs),huge potential lies before us to channelize investor funds to mutual fund investments since the household savings have exposure to the tune of less than 6% approximately in mutual funds, despite great strength of mutual fund products.  We also believe that dual incomes, rising disposable incomes, favorable demographics, increasing urbanization would further open up new vistas to us.

Creation of wealth is happening rapidly, especially in second-tier cities and the proportion of the wealth believed to be in organized wealth management is less than 10% approximately. Also there is hardly any formal wealth management landscape and expertise, the advisory component of wealth management only really being minimal. Therefore huge potential lies in filling this need and the lacunae in this domain.

MF Live: What are your current focus areas, out of all the functions mentioned above? What strategy have you placed in the current focus area?

Shifali Satsangee: I think each function is interrelated and interwoven and works in tandem with each other. It complements and co-exists. It is this synergy of the functions that translates into a viable business.  So to narrow down on one area is difficult.

A strategy is a roadmap to a pre determined destination. And to reach our destination-which is helping people acheive Financial Freedom we have decided to weave in a few learnings to strengthen our processes:

* As the “Founding father of Life Planning” George Kinder puts it: 
  “Listening to the client rather than imposing our agenda, using the simplest of open ended non-financial questions.”

* To employ Kinder’s “Three Questions” which make the client reflect and get a true insight into their specific values and goals as opposed to the generic traditional way of asking questions which elude deep reflection.

We have learnt that the role of Behavioural Finance cannot be undermined. We are more than just advisors who configure the products to the client needs, we are also psychologists wherein we need to handle human behaviour. So we have incorporated in our processes, a concept called Personality profiling, wherein we get insights into the clients personality traits, based on which we take cues and deal with them in a way in which we could best connect with them. We need to be on the same page and connect with the pulse to understand the psyche of our clients. An interesting read would be: “Insights colour energy wheel” at 

On the Business Development side, we plan to focus our energies on building up our SIP book since we strongly believe that SIP is a disciplined way towards wealth creation.

MF Live: What according to you is the future of the profession? Let us assume the RIA consultation paper will be implemented. How in that case do you plan to align your business? 

Shifali Satsangee: It is heartening to witness that in spite on an environment of stricter regulatory norms, the ARN registrations has steadily accelerating by around 35% p.a. year on year. According to the United Forum estimates, there are presently around 46,000 active ARN holders in the mutual fund distribution business.

SEBI seems to have set its final position on the RIA consultation paper but theres still ambiguity around many areas. Ideas and suggestions around recovery of fees, migration time frame and a new MF-RIA intermediation model are still being reviewed. Personally, this step towards towards an RIA regime is pro-investor, very futuristic, towards greater compliance and improving advisory processes, yet there are certain ground realities that we would face as advisors. Migrating to a fee-based model would not be easy in the B-15 space. To keep in tune with changing times, one has to be agile and adaptable to survive in any industry, accepting that the initial stages of transition would be painful, we would embrace then RIA intermediation model. In fact, we have already started thinking on such lines and are attending a workshop on RIA intermediation model soon.

MF Live: You message to new IFAs & Fellow Channel partners?

Shifali Satsangee: 

Food for thought:

• Have a focused business strategy in place (e.g: what we would like to engage in and what not to engage in).

• Identify your SWOT (Strengths, Weaknesses, Opportunities ,Threats)

• Create a USP (Unique Selling Proposition) and decide what value addition you would like to offer along with your services.

• Be cost effective by creating an online presence and by implementing technology to service our clients.

• Have robust in house processes/documentation in place. Be process-oriented like big brands. Every business needs structured processes and an understanding of its dynamics before being operational. Being process-driven is the key to format ourselves for success, gain positive traction and beef up our expansion muscle. As the Late Stephen Covey aptly put it: “You need to begin with the end in mind”. While setting up processes for your firm, you need to think about how you would handle situations, which might crop up later.

• Have a gradual step-by-step, structured advisory approach while advising. Financial Planning is more prescriptive in nature than an off the shelf or over the counter (OTC) guidance. 

• Have a Documentation of Investment Policy Statement (An IPS is a short document like a client engagement contract which encompasses the investment goals, investment philosophy, asset mix allocation, agreement on terms and conditions on certain aspects wherein the scope of our services is defined, limitations of the firm is clearly spelt out etc.) in place. This will help us if and when we migrate to an RIA model in the future.

• Scenario Planning-During initial engagement with a client it is essential to set proper expectations regarding market movements and possibilities of negative returns. This also helps us retain them at a time when the markets are tizzy because having made them understand the basics of finance and investing

• Proactive communication and prioritizing client communication especially when the markets are seeing a downturn is a must since most of us are always on the defence mode and reduce communication at such times. Proper contact management is essential since the propensity of clients seeking a second opinion goes up in choppy markets since the value of the portfolio falls substantially.

• Maintain a diary of detailed list of cognitive errors or errors in judgment (complete notes, dates and events) which you have experienced, since it helps to ward off the spectre of irrationality and helps in avoiding thinking errors. It would also help us not to succumb to social proof biases known better as “Herd instinct” which is the evil behind bubbles and stock market panic, refine our thought processes and aid in rational/logical decision making.

• It helps to periodically review the combined metric of Uniqueness, Quality, Scalability of services you are offering. We would know exactly where the loopholes are and plug them for providing a better package of services to our clients.

• Try to institutionalize your practice and corporatize your processes to give a corporate feel and connect to your clients. A simple example would be having the right logo which is the identity of your company on a good business card.

• Compete in a healthy way, respect competition, learn from them to maintain a conducive environment in the ecosystem. We all have our distinctive styles of working, different strategies and business models which can co-exist. Respecting and learning from our competition, peer groups, clients. (They are where they are for a reason).

• Network within your professional circle. Divergent opinions and views add a fresh perspective, broadens our outlook to business, makes your thought process more progressive and gives a corporate connect. 

• Follow the path of -Addhyan (continuous learning), Seva (Unparalleled levels of service), Vyaayaam (Yoga which helps maintain equipoise and evenness of mind in face of success and failure- since sober reflection is indispensable while taking investment decisions).

• Last but most importantly, learn to say NO. Your ability to say no will only enhance your clients and potential clients faith in you. We have had clients who are not matured enough to handle a particular product category, clients who have loans to repay, clients who are not or under insured, insisting on investing in mutual funds. We firmly refuse to accept such investments and advice them to first repay the debts, get sufficiently covered, even if it means losing business. This approach has held us in good stead with clients realizing our integrity and coming back to us after the needful is done.

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