Mr. Sarfaraz Patel.-
Zonal Sales Head, NJ Group
Sarfaraz Patel is the Zonal Sales Head for South Gujarat, MP and Maharashtra (ex. Mumbai) with NJ Wealth. With more than 11+ years of experience in the financial services industry, Sarfaraz has proved to be a valuable contributor in shaping successful business in his territories.
Why an advisor should Focus on Financial Planning of Clients?
An advisor advising clients on how to manage their finances so as to achieve their life goals can be termed as Financial Planner. I believe the main role of a Financial Planner is to assimilate the aspirations of their clients and draw a road map to make them reality, and than guide them towards realizing them.
Here are 10 reasons why every advisor should do Financial Planning of almost every client.
- Right Selling: The primary objective of the financial advisor should be financial well being of his clients and ensuring that all important life goals are successfully met. Creating a savings plan and managing an investment portfolio geared towards achieving this role is the right approach towards selling.
- Discussions that matters: Preparing and following a financial plan with clients is also a great way to handle investor expectations and discussions with him. The discussions increasingly become 'focused' on how you are progressing towards goals rather than drifting towards market scenarios and what not.
- Pitching need, rather than Product: With financial planning, the focus tends to be on “needs” rather than products. The products is seen as means to achieve the goals. To that extend, the discussions on products reduce and focus shifts to asset allocation and selecting the right asset class.
- Bigger Ticket: Nothing motivates us more than working for our dreams and by linking savings to the dreams of clients, we further motivate them to save more for future fulfillment of goals. Normally a family of say four will have at least 4-5 financial goals and SIP need of Rs.25,000 at least. Merely making clients realise their SIP need is good enough for them to dig deep in their pockets.
- Longer Duration: Other than big ticket sizes and more number of SIPs, the investment horizon of the SIPs are also very much longer. This augurs well not only for your business but also for your relationship with the client.
- Easy to convince Clients on "Why to invest in Equity?": While talking of goals instead of products, the focus automatically changes to - what can be done to achieve the goals? One will mostly find that the required rate of return to achieve goals will ultimately find equities as the best fit. Talking about equities then becomes much easier and client is also convinced easily.
- Looks Professional. Creates Differentiation.: Talking about financial goals also helps differentiate you from the crowd where a lot of other advisors are pitching /marketing for products. It lends more credibility to your practice and also helps you look professional and with a plan in front of clients.
- Focus is on Goal. Not Market: Once an investment is linked to financial goals, automatically the attitude /approach towards same changes. You no longer worry about short term fluctuations but rather think of the impact it can have at goal maturity and then try to adjust accordingly.
- Imbibes Discipline in Client: With investments linked to goals, much greater discipline can be expected from the clients. The SIPs will be not be easily terminated or foreclosed and investments will too will not be readily redeemed or used for any other purpose.
- Gets you good reference: Needless to say, when a client feels his money and you are both working for achieving his financial goals, an element of trust and respect builds up in the relationship. Getting references from such clients becomes easier and you may even find walk-in references from satisfied clients.
What tools can a NJ Wealth Partner use for purpose of Financial Planning of Clients?
There are adequate number of tools already available for Partners to use from and I will briefly talk about this tools...
- NJ Financial Tools Mobile App (Available for Android & iOS):
In a digital age of smart mobiles, this is the most easy and handy tool for planning goals on the go. Partners can use it to plan for goals on this app and then readily share the image results with clients. We have added a new feature now wherein Partners can login and see their personal branding / contact info on the results output. The compact tool also gives performance and other details of MF schemes and there is also a dedicated section for ELSS planning. Its a complete tool and a must have for all Partners. - Need Assessment Tool (Available in PD > Financial Tools > Tools): For those looking for a more advanced and formal financial plan writing software or tool, the Need Assessment Tool, is a great answer. One can write very detailed Financial Plan using this tool, complete with covering letter, financial goals listing, savings plan, disclosures, assumptions, etc with the output delivered in .Pdf report format.. One can fine tune assumptions, have multiple goals, allocate existing investments, etc. while making the plans. Apart from Comprehensive plans, one can also create plans for single goals and get output in .Pdf report format which is readily sharable.
- Family Needs Master & Progress Report (Available in PD > Client Services > Client Management): After planning for goals, comes the implementation / monitoring part. The Family Needs tools enables you to record your financial goals for your Groups and then also to map existing mutual funds scheme investments to such goals. There is a progress report also available using which, one can monitor the progress towards the goals and make course corrections. We have attached a few snaps below for your reference.
Future plans: We are presently working to show financial goal wise valuation report on the Client Desk home page. This will drive many clients to get their financial plans also prepared. In future, our existing tools may also see other developments as the usage increases.
What are the challenges that a new Partner can face when one attempts to practice financial planning approach to business?
The success of any financial planning approach to practice depends on how successful you are in sticking to the plan and continuing with it over the years. We must remember that it is not a one time activity to do but a long term commitment from the client and also from the advisor. There is also a challenge for the advisor to keep the client patient and disciplined through out the investment horizon to ensure that there are no compromises that affect the goal achievement. These are behavioral aspects of the advisor and I believe that NJ Partners are capable enough to understand and carry these responsibilities.
There are other practical challenges an advisor may face, like for example, recording or saving the financial plans discussed or remembering your successive discussions with the clients. There are also challenges in frequently reviewing the plans and making changes / adjustments in same as per new situations. These are not big challenges to me and I believe that a Partner who uses the NJ platform adequately will not face these challenges. One can easily use the above tools for recording, monitoring the goals. Further one can also use NJ CRM tool for planning frequent review meetings with clients and also record all the decisions taken in such meetings.
What is the potential growth in business one can expect by adopting the financial planning way?
I would simply say this. If a Partner does financial planning with 400 clients /families, he can easily get 1 Crore of LIVE SIP which will give him 1500 Crores of AUM in 20 Years !!! Partners are wise enough and I would request them to work their numbers accordingly.
Snapshots:
Family Needs Master
PD > Client Services > Client Management > Family Needs Master
Usage:
- To Add / Edit / View Goals for Groups (families)
- To Manage Mapping of Investments (MF Schemes) to Goals (Map / Unmap)
- To View report for Groups with Goal planning and Investment Mapping status
Family Needs Progress Report
PD > Client Services > Client Management > Family Needs Progress Report
Usage:
- To view Goal progress
- To know additional investments required
