In an exclusive interview with Yogita Khatri of Myiris.com, Suraj Kapur, Certified Financial Planner, SRE Financial Planners talks about what influences and erodes investor confidence most and the most challenging part about being a financial advisor.
Suraj Kapur is a Certified Financial Planner and has a Masters in Computer Engineering from WPI, Massachusetts. He is working as Senior Manager with SRE Financial Planners where apart from being Financial Planner he is also responsible strategy development and financial literacy campaigns. Kapur is also an academician and a leading tutor at Financial Planning Academy for CFP Certification Education Program. He has authored many articles for magazines and financial portals and is also takes up speaking assignments for Financial Planning literacy campaigns by SRE Financial Planners.
> What led you to choose financial planning as a career?
It was during one of the training sessions of the BSE certificate programs in capital markets when I first heard about financial planning. The whole idea about being an advisor who guides clients and gives them a direction to their personal finances excited me to no end. It is indeed a noble profession wherein you give unbiased advice to your clients keeping their interests foremost in your mind. You provide your clients an objective assessment of their current situation, their specific needs for their future and a roadmap to achieve those needs.
> What is your take on current market situation? How do you see the market going forward?
As financial planners we look at long-term planning for the clients. In this regards we definitely feel India is a growth story and we expect the market to go up in the long run. In the short term, the market is going to remain volatile since we are dealing with global recession, poor monsoon which has already impacted the price of basic food items like tur dal and sugar (so much for negative inflation) and now H1N1 (Swine flu) impact. Irrespective of the way markets are headed, systematic investment planning for long term is the best way to make your investments work for you. If the markets are volatile, you get the benefit of averaging price and in the long term when markets are headed upwards then you get the capital appreciation.
> What services do you offer? How long have you been advising clients?
At SRE Financial Planners, we offer fee based comprehensive financial planning, risk analysis and insurance planning, retirement planning, tax planning, investment planning, specific goal planning and implementation services across all financial products (equity, mutual funds, insurance, debt) to our clients. We started offering Financial Planning services 3 years back and are one of the pioneers of this profession in India at an institutional level.
> Briefly explain the investment / selling scenario of the financial products you offer in current market?
At SRE Financial Planners we are advising our clients to make investments on the basis of their needs (whether they need it or not), time horizon for their goals and objectives (short-term, medium-term and long-term), their risk appetite (whether the risk-return tradeoff meets their risk appetite) and with a strategy of systematic investment in a disciplined manner.
> How important is an independent financial advisor (IFA) in the total sales process?
A person who is unbiased and can give advice free from conflict of interest keeping client`s interest foremost will definitely become an extremely important in the total sales process. From the clients perspective the relationship being unbiased and long term will result in development of trust in clients to constantly seek advice and he would not mind paying for objective advice. World over across all industries, people do not mind paying for unbiased advice from specialists who they know can benefit them in the long run.
> In today`s fluctuating market conditions, what`s been the most common reaction from your clients?
The biggest challenge for the clients is to stay invested with so much happening around them. The other concern is the changing scenario with regards to the recent rules changes with regards to commissions in mutual fund and insurance. The next biggest concern/opportunity for most clients will be the impact of the new direct taxes code proposed to be implemented from April 2011 on their existing plans and future goals and objectives.
> What do you think influences investor confidence most? Do you think investor confidence is improving?
Industry wide a lot of mis-selling across financial services has eroded the confidence of investors. This has to be replaced with `Right Selling` and for that both the industry and IFAs need to change their business models and philosophy. Investor confidence is influenced by a host of factors foremost amongst them is the investor awareness campaigns which need to be taken at both the industry level as well as the IFA level. A transparent advisory and commission structure by industry as well as at the IFA level will go a long way in alleviating the concerns of Investors.
The other concern of investors is the churning of independent advisors across industry. clients will like to see a familiar face on an ongoing basis and as such they are seeking long term relationships with IFAs. If the IFAs are giving objective advice keeping clients interest in mind, it will go a long way in improving investor confidence.