Enriching the Value Proposition with Financial Planning Service.

Mr. Abhishek Dubey, Head - Strategic Business Development Unit

Abhishek Dubey is the Head of Strategic Business Development Unit and part of NJ since last 10 years. Abhishek has played a key role in building the policy, process & system structures at NJ. He is the Chief Policy & Communications officer and also responsible for publications and the front-end - websites & on-line desks at NJ.

The practice of financial advisory / distribution has seen a clear change over the years. The traditional way of quoting fund performance of top / recommended schemes is, quite frankly, old fashioned and non-differentiating. Even a kid can find top performing schemes from google.

The mute question today is this > What value do you offer to the investor for associating with you?

So what is your value proposition? To be very frank, the value proposition of NJ Partners can be very strong if we can really work towards extracting the best of what is available with NJ Wealth. On the top of the mind, here are a few things we can quote...

• Good product basket > Mutual Funds, Capital Market, PMS, Loan Against Securities (LAS) and Realty.

• Strong technological platform for making transactions, viewing portfolio, etc. (E-Wealth A/c., Client Desk)

While the above things are quite powerful, the investors may argue of availability of 'some' of the features with other platforms /distributors. So the next question is, how do we differentiate further? I have seen some top Partners who have really made a powerful narrative of what value they can offer, more in terms of the value from advice they can offer. But for a majority, the gut feel is that the narrative can improve much further.

There are few things which we perhaps have underestimated while creating our value proposition. Among the top of the list is – “Family Needs planning” or financial planning service in other words.

The Narrative:

A Partner's value proposition narrative should include the service whereby you would be able to manage an investor's financial goals. The broad The tracking part would include the assessment of mapped investments and also the gap assessment to fulfill those goals.

In Brief: Identification + Investment Mapping + Monitoring + Gap Assessment.

The Steps:

• Identification of Needs: This is an activity which we believe the Partner has to do in consultation with the investors. This involves an understanding of his life stage & priorities, personal desires, family composition and possible events which may happen in future. A discussion focused on these aspects with client will be very rich and can result into an entirely different set of outcomes as opposed to just promoting a SIP or lumpsum.

• Investment Mapping: This includes mapping of existing assets to the needs. It is recommended that we map 100% of all assets to needs, conditional upon that all needs have been identified. A Partner can presently map all MF assets + MARS portfolios to the needs.

• Monitoring: Monitoring of needs is a challenge for most but it becomes very easy once investment mapping is appropriately done. The client is today able to see his/her needs progress on the home page of the Client Desk and will be able to see it in mobile app too (coming soon).

• Gap Assessment: Ongoing / regular gap assessment and taking appropriate corrective actions for same is something the Partner has to do. One activity recommended is that we regularly review the needs with the client on a set frequency, say half yearly or yearly, depending on the client nature. Reviews should also happen when there is a life event happening in the client's life. The Gap assessment may result into increasing SIP input or adjustment in the need requirements or investment mapping done.

NJ Family Needs Modules:

At NJ, we have made the Family Needs feature available for all investors and Partners. Still the figures tell us that there is a long way to go for NJ Partners against the huge potential we have. For those of you who are not quite aware of the Family Needs features offered by us, here is what you should look for:

What can be the Family Needs?

Well the obvious first question for every client / family but can be sometimes tricky to answer. While we all are well aware that defining any need or goal requires us to be SMART – i.e., Specific /Significant, Measurable /Meaningful, Agreed / Attainable, Relevant /Reasonable /Rewarding, Time bound / Trackable.

For a majority of families, planning for life goals is very important and this includes Retirement, Child Education / Marriage, Purchase of Home, etc. Planning for purchase of Car / family holidays, etc. can also seen as needs. There can also be other goals like …

1. Wealth Creation

2. Planning for Business / New Venture

3. Planning for Financial Independence (like Retirement at early age)

4. Charity / Social Cause / NGO

5. Inheritance / Gift to Children

6. Repaying Debt

The Benefits:

For retail investors, the financial goals approach is very meaningful as the approach encourages one to identify key financial goals in life and plan for same. The advantages of such an approach can be simply understood from the following key points …

• Higher investment plan outlays – lump-sum or SIP

• Assets having longer holding age / greater stickiness

• Lower redemption pressures > greater discipline and focus

• Easy to manage / control client behavior

• Change in discussion agenda from markets, products to goals

In Brief:

The key role of NJ Partners is managing the expectations of clients, educating them and handling their emotions. Adopting a structured approach to advising is thus very important to increase engagement and win trust. Adopting the financial planning approach adds great value to your offerings and positions you in a different league. Your business may substantially benefit once proper family needs assessment and management is done for all the families that you service. We encourage you to do so and wish you the very best for same.

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