Investor types

When people tell me “customers won”t pay an advisory fee”, they actually mean “my customer won”t pay me”.  Customers aren”t homogenous. Instead they have unique personalities and it”s almost impossible to find identical people. Even identical twins exhibit different behaviours. However, based on some commonalities one can attempt to categorise people into different segments. This helps in formulating strategies for the different segments and this attempt in customisation can make a huge difference to your business outcomes. In keeping with this approach here are nine segments from the book “Storyselling for Financial Advisors” by Scott West and Mitch Anthony.

Click on the image to enlarge


Most IFAs believe that

  1. Equity will be the main driver although 30% which itself is a large proportion seem to believe that debt and hybrid have a key role to play
  2. More that 75% believe that “learning” is much more important than “selling” for an Advisor
  3. Nearly all of the IFAs believe that “Communication” is the most important skill
  4. Again nearly all the IFAs expressed their view that understanding the overall life situation of the investor is more important to understand than understanding his financial standing
  5. 82% of the Advisors believed that managing the attitude, behaviour, team and technology is more vital than managing investment. If the other two are well looked after than managing investment will be easy
  6. There was a nearly 50:50 split when they were asked whether the monthly dividend proposition was unsustainable. A little more than 50% clearly thought it was an unsustainable proposition.
  7. Nearly 70% believed that Equity Markets are holding up based on fundamentals and conviction while the rest believed it was hope. Clearly this is the reason why most still believe that Equity will continue to be the driver for investments
  8. 88% believed that technology wasn”t that difficult to learn. This is indeed a welcome sign
  9. 35% believed that incentives to distributors were bad. Now remember these are Advisors themselves voting and hence 35% is a significant number. Perhaps the business model is on the cusp of fundamental change. Perhaps the business is set to get more professional in the years to come.
  10. Nearly 86% of the respondents believed that expense ratios are set to come down.
  11. Nearly 70% of the advisors believed that MFRT meant “knowledge” to them and this corroborates well with the view that learning is more essential than selling
  12. Nearly 90% of the respondents wish to make their children enter the advisory profession.

The findings are very interesting. This set of Advisors appear to be open to changes, open to new ways of thinking, long term oriented and if I were to use one word to describe them, it would be “EVOLVED”. Perhaps this kind of thinking may or may not reflect across a larger audience of IFAs across India. But one has to bear in mind that these are successful advisors and their thinking and beliefs have formed the bedrock of their success.

Leave a Reply

Your email address will not be published.