In an exclusive interview with Yogita Khatri of Myiris.com, Suresh Sadagopan, Principal Financial Planner, Ladder7 Financial Advisories talks about financial planning as a career and explains the investment/selling scenario of the financial products in current market.
Suresh Sadagopan is a Principal Financial Planner at Ladder7 Financial Advisories, who has built the practice. Ladder7 Financial Advisories is a firm specializing in Comprehensive Financial Planning Advisories. Ladder7 FA has close to 125 clients for whom Financial Planning has been done. He has written over a 100 articles on various aspects of Finance and related subjects for TOI, DNA Money, Business Standard, UTVi, Money Today, moneycontrol.com, Financial Planning Journal etc. He is also on the expert panel of 30 minutes to wealth on NDTV profit.
What led you to choose financial planning as a career?
Right from the time I entered into Financial Services field 7 years ago, I was of the opinion that all relationships can be win-win - that I need not have to push products just because something was more lucrative. Hence, I was analyzing the requirements of clients and offering products to suit them. I was pretty successful with this approach and my clients were satisfied too. That led me into full fledged financial planning as I figured that I could be a good advisor to my clients, just the way a doctor offers consultancy to his patients. And, I could say with experience that it has been a satisfying win-win relationship.
What services do you offer? How long have you been advising clients?
The primary service that we offer is comprehensive financial planning services. These services are ongoing services for which we keep regularly updating the plan and advising our clients. Apart from this, we offer investment advisories, second opinion services, specific goal related advisories and workouts, advisories on finances etc. We have been in this business for close to 4 years.
Briefly explain the investment/selling scenario of the financial products you offer in current market?
Today, MF, insurance & other financial products are sold aggressively without actually finding out if it meshes with larger client objectives. Also, most clients are not very clear on the charges and hence become disappointed later when they come to know that they were not informed about the same. The clients on their part expect all financial services without paying any charges. In fact, they expect a pass back on commissions got by distributors. Media is not playing a very positive role here - they tend to portray that distributors do not deserve the brokerages that they get and largely are an unscrupulous lot.
Real estate agents get 2% on either side. Anyone can become a real-estate agent. There is no agency which oversees them. And the amount they earn - which is in lakhs is not discussed anywhere - including in the media. There are various others - like retailers of FMCG companies who get double digit margins, agri commodities where the cost of intermediation is several times the cost, which are not covered with equal vim in the media. Distribution and fees for that is an accepted reality in business, which somehow does not seem to apply to financial services.
How important is an independent financial advisor (IFA) in the total sales process?
IFA is an important link between the company and the end customer. He is the one who matches the client requirement to appropriate products available. He is also the one who keeps advising and counseling clients when the markets go up, down, is listless? He is a conduit through which appropriate information flows to clients. The industry, the regulators & clients need to recognize, appreciate and allow the IFA to stay in the business profitably.
What role do you think FAAIDA can play with you to improve the IFA performance?
The most important thing is to highlight to the regulators especially, the unjustified slant they have vis-a-vis MF regulators as compared to other sectors in the financial services like insurance & other financial products. Today, all regulation seems to be directed towards muzzling especially the MF distributor. This is ironical as MF is an ideal way to participate in equity markets for most customers and making MF distribution unviable for distributors would drive them to other more lucrative lines - which is happening already. Most distributors are promoting ULIPs in a big way. This ultimately is to the detriment of retail customers.
In today`s fluctuating market conditions, what`s been the most common reaction from your clients?
Lot of them are worried if the markets will again test the lows of October 2008. They are wary of investing at this point for the same reason. Many have however understood that SIP is a good way to long-term wealth creation and are continuing their SIPs or starting new ones.
How many clients do you currently manage?
About 120 financial planning clients and about 250 overall.
How many clients do you think an IFA can handle comfortably?
All clients are not equally active. Normally 25% are active and another 25% moderately so. Others are generally on-off kind of relationships. Hence, in my opinion, about 200 clients can be handled by an IFA
On a personal note, any personalities or books that have influenced you the most?
`My experiment with Truth` by Mahatma Gandhiji is the one close to my heart. This book illustrates that you do not stray away from the truth to achieve anything. Also it illustrates the courage of conviction & standing up and upholding one`s ideals.
I admire Shiamak Davar & Sivamani (drummer) among a host of others who are successful personalities in very difficult professions - professions which most don`t even recognize as such. They are trail blazers & pioneers who have shown that everything is possible, if one puts the heart and soul into what one does.