In an exclusive interview with Yogita Khatri of myiris.com, Lovaii Navlakhi, managing director (MD) & chief financial planner - International Money Matters talks about importance of IFA in a total sales process and his take on current market situation and its outlook.
Lovaii Navlakhi, managing director and chief financial planner, is the founder of International Money Matters. With over 18 years of previous top-notch industry experience, an MBA (Finance) from SP Jain Institute of Management, an ICWA, the distinction of being one of the first Certified Financial Planners (CFP) from India.
> What led you to choose financial planning as a career?
I was keen on spreading financial education where people understood the basic concept of managing their finances- be it saving, investing, budgeting or debt management.
I also found that very few advisors were acting in clients` interest. This is something that I am passionate about and hence I chose to start a business that promoted financial planning and help people understand how to make money related decisions and the impact their decisions have on their finances.
> What is your take on current market situation? How do you see the market going forward?
Equity markets have and will always be volatile. Investing in stock market is ideal if the time horizon is long, say more than 5 years. Over the past 25 years, every period of investment for 5 years or more has been profitable. From that point of view, the ideal time to invest is today.
Considering the demographics in India (inherently young population) and the high dependence on domestic economy for India`s gross domestic product (GDP) growth, sectors which focus on domestic consumption should be focused on. To balance the volatility, inherently defensive sectors such as FMCG, Pharma, Hospitals & healthcare and IT could be invested in. If you believe that disinvestment is a theme to follow, PSU stocks should also find a place in your portfolio. Generally the large cap blue chips are fundamentally strong, and give dividends regularly, but their dividend yield would be lower.
> What services do you offer? How long have you been advising clients?
We assist our clients in identifying, defining and prioritizing their financial goals over the short term to long term and then designing a customized game plan to achieve these very goals. In this endeavor, our range of services includes investment planning, cash flow planning, retirement planning, risk management & insurance planning, tax planning and estate planning and NRI services.
The pillars of our business are ethics & competence - we believe the client`s interest comes foremost and that there is no substitute for knowledge. That is why International Money Matters is one of the very few companies where the sales team is not driven by incentives and has a knowledge up-gradation budget through which they pursue courses and training to further strengthen their expertise. We are concerned about not only the financial health of our clients but also their overall well-being. We have 10 certified financial planners (CFPs) and 10 associate financial planners (AFPs). We have been advising clients for the last 8 years.
> Briefly explain the investment / selling scenario of the financial products you offer in current market?
The focus is on financial planning and then we recommend asset allocation accordingly. The products are then chosen in line with the asset allocation strategy. We offer an entire range of products like mutual funds, direct equity, life insurance, health insurance through various AMCs/ companies.
We have always believed in the financial planning approach to investing. I am a Test match player rather than a T20 guy; and wanted to look at long term relationships. Even during my early days, I would want to understand for what period the funds were being invested, the risks that could be taken; before I conveyed my advice. When the CFP program was introduced in India, I realized that my approach was `financial planning` oriented. I realized that I could not compete with the large distribution houses and banks on volume of funds; but I could certainly beat them on service.
I believe I have created a niche for myself and the business where we bank on expertise and ethics: and that combination is truly deadly and almost unique in this market place!
> How important is an independent financial advisor (IFA) in the total sales process?
An advisor is very critical especially if one does not have the time, knowledge and resources to manage one`s finances. It takes the emotion out of investing so that one does not get swayed by the latest fad or the trend in the market. Of course, if one has the time, expertise and experience- he can manage his wealth, although it may not be objective.
> In today`s fluctuating market conditions, what`s been the most common reaction from your clients?
``It`s always reassuring to know that while you may be busy or lazy, there`s someone at IMM thinking of you and your portfolio.`` This is a testimonial from a client.
> How many clients do you currently manage?
We manage approximately 600 families across the globe, and have developed a certain level of expertise in dealing with NRI clients..
> What do you think influences investor confidence most? Do you think investor confidence is improving?
Media influences the public to a large extent. Yes, it is improving as they recognize that management of money requires full time attention and is getting complicated with the volatility of the markets and the number of products. The personal experience with advisors also influence the investor`s confidence.