28 Sep Financial Advisor and Direct Investing
As per from CAMs data, in a six months period from Jan to June 2017, about 24% of equity sales is attributed to the “Direct Channel” as against 20% from the “IFA Channel”.
This is a significant indicator and cannot be simply brush under the carpet. It is important to delve deeper and figure out the course of action that IFAs should take to stay relevant and vital for investors.
Like it or not, one has to acknowledge the potential of the direct channel. While a lot of business through the direct channel may be attribute to institutional money and RIA action, one cannot underestimate this channel.
To figure out the approach that an IFA can take, I asked some eminent industry people to reflect on the numbers and suggest suitable remedy.
Let us see what these leaders have to say.
1) Kanak Jain -CEO Suskan Consultants Pvt Ltd; Founder The Volatility Game; Mentor – Ask Circle MFRT
According to Mr. Kanak Jain, “the investor cannot have a fulfilling investment journey without guidance because :-
- Focus on market development and creation of new customers.
- Enhancement of skill sets such as communication and presentation skills
- Understanding behavioural finance and managing investor behaviour
- Focusing on goal based financial planning instead of product selling
- Building one’s personal brand
- Investing time and effort in conducting Investor Awareness Programmes and educating the investor
- Joining Associations like Rotary etc for networking and business development
In a world which is changing faster than one had ever imagined, there will be challenges but along with the challenges will emerge opportunities like new technology to manage back office and transaction. These will help in scaling up the business and make up for the pressure on margins.
What is left to be seen is whether we are willing to take up the challenge? Because those who step up and leverage the opportunity will end up in gaining more than they had ever imagined.