With experience, you can access, predict and judge a lot of financial situations, crises and conditions. But some situations are beyond our predictions, come unannounced and are unprecedented. Good health is paramount in this critical time, that we cannot deny. Simple steps imposed and suggestions made by our Government can help us overcome this situation. The time for recovery is yet unknown. Along with our health, it is imperative to efficiently manage our wealth as well for sustenance.
We must do our bit to take care of our clients’ needs as an advisor in these unsteady times. How do we do that?
Here are some tips:
Conversations: Build conversations with your clients, discuss the current volatile conditions of the financial market and what it involves. Restore their faith in the markets, especially for long-term investors, enlightening them on how current volatility shall have minimal effect on their long-term goals. Discuss a clear picture with your investors with 3-4 pointer reasons explaining the situation and your view and plan for the next 1-2 years post our rise above this global crisis. Advisory entails effectively managing the behavior of the investor to ensure none of his biases affect his judgment and adversely affect his perceived goals and investments.
Update Financial Objective/Goals situation: Investors today are sensitive and hold the perception that they may be unable to achieve their set financial goals. This could hold true for short term Goals, volatility in the markets will definitely impact short term investments, while this may not be true for long term investors. In both cases, taking cognizance of your investment is vital to decipher where you stand. Based on that thorough understanding take a decision to mitigate your risks. Short-term goals as close as 2 to 3 years could consider re-balancing their portfolio to reduce their risks. Long-term investors have enough time to get their investments back on track by a few tweaks like increasing their SIP investments per month, increasing their time horizon, adjustment through risk profiling and change of Asset Allocations. It is up to advisors to proactively share these inputs with investors to ensure a sense of trust continues to prevail in spite of market turmoil.
Review the Insurance: The penetration of Health insurance in India is extremely low. Currently, a mere 34% of the country’s population is covered under any health insurance.  Most Indians do not have access to health insurance. For those who do the coverage is mostly inadequate. Periodical reviews on health coverage must be undertaken by clients to cover themselves in an unprecedented situation, much like the current one we face today. At this point, clients must take a rain check on their insurance coverage and related facilities as per policy. Advisors must recommend the adequate coverage for the investor’s needs with options of insurance companies that offer him the best benefits in this regard.
Yes! Doling out financial advice may seem to be a task at this point, but all we can do is give it our best shot to smartly safeguard our investor’s money through thorough due-diligence. While the situation seems grim, we can bank on the best financial adviser back office systems and digital wealth management solutions to light up our way through these dark times.
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.