In an exclusive interview with Pooja Chopra Goel of Myiris.com, Madhur Todi, Managing Director, Mera Money Advisors (P), gives a fresh perspective on client-advisor relationship.
Madhur Todi`s expertise in comprehensive financial planning is reflected in the firm`s emphasis on estate planning, tax strategies, risk management, investment selection, business succession and retirement planning. Madhur has been active in the financial community of India after he returned from US in 2004.
Can you tell us about `Mera Money Advisors` and its mission & services? What services do you offer?
Mera Money Advisors (P) is headquartered in Ahmedabad and was started in 2004, with branches in Baroda, Surat, Mumbai and Delhi. It provides services in wealth and risk management to corporates and individuals. The goal is to create financial plans for clients so that they become financially independent and achieve all their goals in life. The company`s mission is to provide need based and researched based advice in investment and insurance products, thus helping the client in achieving his long-term goals. The company provides advisory and execution for real estate, FDs, MFs, life insurance, general insurance, equity PMS.
What led you to opt for a certified financial planner (CFP) course and to choose a career in financial planning?
CFP is a well recognized degree in the developed countries and looking forward to India`s growth in the next decade, it is going to start becoming more sought after and recognized here. The knowledge and respect that will come from being a CFP certificant is what led me towards opting for CFP.
How does a financial advisor make his living and is there any conflict of interest between him and his customers?
The financial planner`s main role is to understand the needs of the clients, educate him on various investment options, align their goals with the best available investment options and ensure that the client moves towards achievement of his goals. This entire role of an advisor will not only get him advisory fees but also word of mouth publicity and hence growth in business. I feel that if all planners put themselves into their client shoes, and then give proper advice, there will never be any conflict of interest. Trust is the foundation of the advisor-client relationship. A client should be cautious of hiring someone who is unwilling to spend time discussing the questions you raise, rushes through the answers, or speaks in terms that are hard for you to understand. Ideally, you`ll work with the person you choose for many years. It`s important for you to feel comfortable asking questions. You must be satisfied from the very beginning with the answers you receive. Ask the right questions; check the right details.
The competition in wealth management has been intense, with a number of small players having plucked in recent years. How do you place yourselves in that league?
No business or profession in any country is without competition. There are professionals and companies in each industry that either stop working/production or either get bought/sold. We have been able to continuously grow our client base and `Assets Under Advise` by providing long term investment solutions to clients.
Do you think a separate emergency fund is an essential part of financial planning? How would you recommend our readers to structure it? Should it be separate from one`s investment portfolio?
I feel that every individual should create a separate contingency / emergency fund. Many CFPs follow a thumb rule of 6 month`s salary to be put into bank or debt funds. I surely feel that it should be a separate investment and not a part of the investment portfolio. I suggest clients should have a 2-prong approach towards creating the emergency fund: 1) Keep 3-4 months of salary into bank accounts to provide of immediate liquidity 2) Invest 2-5% of your monthly salary into a separate SIP so that it grows over time and can be withdrawn in case of emergency whenever in the future.
Please share with us your view on the several changes that advisors are facing in recent times?
The regulatory changes are difficult to cope with as they are very product centric and not across the spectrum. It creates a lot of confusion in the clients` mind and thus makes our work of client education, more difficult.
What are your plans for 2011 in terms of product portfolio, new services, client segments etc?
We mainly focus on the medium and high networth clients and also limit the number of clients we add every year, as we do not want to dilute our quality of services and advice. The product portfolio is going to be similar as today because each and every client`s requirements are different, it`s just the percentage of holding that varies. We are open to new and simple products that the client is able to understand and get confidence in.
What is your take on current market situation? What are the key factors that will drive the stock markets in 2011? What is your advice to retail investors now?
The current stock markets are fairly valued and it is going to be the domestic consumption in Indian rural and small markets that will be driving the growth in 2011. India is going through a golden period of growth. The growth in the next 20 years will be so great, that neither our parents have seen it, nor will our children get to see it. I advise retail investors to become a part of this growth story and invest for the long term into India so that they are able to create wealth for themselves. I only advise clients who are ready to invest for 3+ years to invest in the stock market unless it is short term parking of money in debt products.
Is there anything else you would like to share with our readers?
There are two kinds of individuals, one, who require financial planning services to reach/achieve goals, two, who have already achieved their goals, or have enough wealth that they require wealth management services to ensure that their wealth does not get eroded by inflation! It is always in their best interest to approach a financial planner and take professional advice. Just like an average Indian has his family physician/doctor, he or she requires to have a financial planner who can ``hand-hold`` the client till he does not achieve his financial goals and objectives.