Does working from home affect an IFA's business?
Advisors are the heart of the wealth management industry in India. Their ability to serve growing customer needs in this fast-paced, often volatile environment, is what makes them indispensable.
In the current scenario, IFAs are confronted by a lockdown and uncertain financial markets. What business continuity steps are they taking while working from home?
Withstanding a crisis
Compared to the IFAs operating in rural areas, IFAs in metro and semi-metro areas are finding it easier to work from home because they embraced Digital Wealth Management solutions earlier to address a wider range of needs.
Both investors and IFAs in urban spaces have become more tech-oriented over time. We noticed that 70-80% of districts in metro and semi-metro areas have moved away from paper-based transactions and have adopted online transaction solutions. Enhanced online platforms provided by the BSE, NSE, and MCX make digital transactions a breeze.
At the same time, links through traditional modes like phone, emails, video conferencing, etc., continue to keep communications flowing smoothly between the advisors and investors. This has helped reduce the burden that the urban IFAs would have faced if they still maintained a pure, paper-based work process like their rural counterparts. While times are difficult for the rural IFAs, all in all, it’s business as usual in metro areas.
What do IFAs lack?
Traditional wealth management firms and financial entrepreneurs now feel an urgent need to upgrade to a more tech-oriented process ecosystem to ensure resilience and to avoid the loss of clients and their trust. The need for a robust platform that integrates all of their products and services under one interface, while being easily accessible in a plug-and-play format is at an all-time high. This move will ensure excellence in service and business as usual under all circumstances, even under lockdown. Standalone financial entrepreneurs will also need such technological tools to help them adapt to these uncertain times and flourish.
The current market situation is great for new investors looking to invest in quality funds, but a large set of advisors at this specific point are facing difficulty in on-boarding new clients. Large volumes of paperwork: client signatures, requirements, and documentation that need to go back and forth between advisor and investor are the hitch here. The mandatory KYC procedure for new client acquisitions adds to the burden. Digital eKYC, digital signatures, and other online developments can assist advisors in overcoming these hurdles today.
Seamless communication is another barrier that the IFAs face. The key role an advisor plays is managing the behavioral biases of an investor. Their dependency on traditional communication and reporting methods may not be apt for these unstable times. Investors today want to be on top of their investments, getting updates and advice on precautionary measures ahead of time as the markets keep swinging. Firms that have an integrated Artificial Intelligence & Machine Learning based platform to ensure a constant flow of information to clients in the form of reports, updates and opportunities, will find themselves in a better position, making it easier for them to manage their investors and regulate their investments.
Digitizing to adapt
What IFAs and financial entrepreneurs need today is a reliable technological backbone for wealth management across India. This current generation, future heirs to HNIs and ultra HNIs, are knowledgeable and tech-savvy. They look for financial services that answer their needs and solve the problems powered by digitization. Therefore, with the help of the best mobile apps for mutual fund investments and the best financial planning tools in India, the worst can still be averted.
If digitization is not the top agenda across financial client-facing services, then traditional wealth management firms, as well as entrepreneurs, face the threat of extinction.
By Rajan Pathak, Co-Founder & MD, Fintso
Rajan is known for his in-depth insight into the financial entrepreneur’s venture with 25+ years of establishing various B2B businesses, which gives him the edge and adeptness to scale the advisory business.
As the CEO of IFAN Finserv (formerly ING), Rajan managed a team of 40+ people, created a wide network serving 1300+ Independent Financial Advisors managing assets over $500 million.