In an interview with Yogita Khatri of Myiris.com, Jaya Nagarmat, Managing Director (MD), Investor Shoppe Consultancy says, ``I think if I had the power to change anything in the financial services industry, it would be to get the banks to stop selling financial products.``
> Can you please tell us about ` Investor Shoppe Consultancy`? What services do you offer? How did you step up in financial services industry?
As the name suggests, Investor Shoppe Consultancy is into advisory and distribution of financial instruments. We probably offer all services in the financial industry; however we restrict our products to mutual funds, life insurance and general insurance. Sheer passion to learn more about money and to be an entrepreneur brought us into the industry.
> How do you reach out to your clients? How do you win the confidence of your clients?
Years ago, when we set up business, there was a need to do a lot of marketing activities. But going forward, this need has almost become negligible as our existing clients who have tried and tested us for years together normally get us new clients. Winning confidence of clients is a continuous process for us. Our tagline says ``Building a lifetime of relationships`` and every relationship can be built only with trust and confidence. What we buy, are the products that we recommend to our clients and most clients see through our integrity and not only remain with us lifetime but also confidently refer us to their near and dear ones.
> What are the emerging trends in wealth management in India?
That`s a very interesting question. I think there would be a lot many emerging trends in wealth management in India. I think one would need to specialize in whatever one does and would probably have to work closely with other specialists in order to offer convenience and the right advice to an already informed but time strapped investor. Of course, there would be emerging platforms- we see so many of them emerging already and service providers like product analysts, research analysts etc.
> The recent fraud case in a bank`s wealth management unit has put a spotlight on the way wealth management businesses are conducted. Do you see that as a positive or a negative development for advisors? How do you see the business environment for advisors in 2011?
Well, it surely is a positive development for advisors. As an advisor, my first and most important job is to stand by the investment product / service that has been sold by me, through the life of the product / service. The very fact that my client can walk back to me even after 10 years of the product / service sold to him/her always drives advisors like us to recommend the right product to the client. It is also our responsibility to guide our clients through their emotions of greed and fear- the 2 most important emotions in the financial sector- I think most scams can be completely avoided if investors are guided on how to take care of these 2 emotions.
As far as business environment for advisors in 2011 is concerned, I believe it is a little tough. Regulations are changing everyday and hence it is indeed difficult for advisors like us to build any strong business models around these changing regulations. Of course, if there are clear cut regulations, which I guess will probably happen soon, we could take on.
> Is there a global benchmark for planners that can be immediately applied to India?
I am not so sure whether a global benchmark for planners can be immediately applied to India. There is a dire need for investor education first. And this will have to percolate to all the smaller towns in the country. The regulations should be black and white and a lot of other factors before we define a global benchmark for India.
> What are the aspects that matter you when selecting funds for your clients?
Aspects that matter when selecting funds for our clients strictly depends on the risk profile, on the clients needs, his goals and objectives, identifying the short term needs, mid term needs and long term needs and hardly ever depends on our favorites. So our AUM will comprise of very spread out picks, both equity and debt.
> What`s the one thing that you would change in the financial services industry, if you had the power to make that happen?
I think if I had the power to change anything in the financial services industry, it would be to get the banks to stop selling financial products. I have been to public sector banks where the branch manager has almost no time to manage his own banking business but has been saddled with a target of selling financial products to his clients. With private sector banks, the story is a little different- the moment my account crosses a particular amount, I tend to receive calls from relationship managers who claim to make a financial plan and wealth management but end up selling expensive products. And just 6 months later, after you have bought the product, the relationship managers have moved on.
> Going ahead, what are your plans? How do you plan to expand your business?
Well, we have a lot of plans to expand our business and to build a strong relationship with our clients. I think I will talk about it in my next interview because it will be more concrete, then.