Do not put all your eggs in one basket

Financial Advisors Interview
On: Feb 20, 2014 | From: Tejal Gandhi
Financial Advisors Interview in Advisorkhoj - Do not put all your eggs in one basket

Tejal has overall 24 years experience in the industry. She worked with Standard Chartered Bank for over 13 years and then started her own Financial Advisory firm called 'Money Matters' which focuses on Financial Advisory Services and Consulting. Her focus area is advice to women who are caught between work life balance and have little or no time to manage assets. Tejal is a CFP and done her M.Com & DSM. She is also an active Rotarian for over 22 years and was the youngest Lady President in entire Mumbai in 1998-99. She is actively Involved with various Women's Committees over the years and works with closed groups on Financial Literacy.

You have been the part of the banking industry for 13 years, what triggered you to leave your job and start life as an IFA?

I was the part of the banking world for a long time. During these years, I found that I was more interested in spreading awareness about financial awareness. And after working for 13 years, I was well versed with the financial awareness among the people. So, I started my own advisory firm where I can educate more customers and even have my own flexibility of working.

How is an IFA's financial advice different from a bank RM?

As per my views, there is no comparison between two. The IFA is like a family doctor who hand holds the client at every stage. Bank RMs change very frequently, sometimes as early as six month or so. Therefore, investors are not ready to trust them and handover all the investments. As an IFA, I am present to talk to them any time regarding any investment and we build a very different relation with the investors and thus he or she feels comfortable and tell us about all their investment.

What is the advantage of being an IFA?

We become a part of client’s life. They trust us completely and take guidance from us in terms of investment and even on other matters. I have families who have been investing through me from last 10 years. I am a family member of my clients and that is the biggest advantage of being an IFA.

You have lot of women clients as you give them proper insight about investing. What is the positive point in them when you talk about investments and how can women invest smartly?

Women have the qualities to be good investors- They’re patient, disciplined and intuitive and have this drive to prove themselves. The first step to investing smartly is to be financially literate. While investing, they should conduct a proper research and diversify their investments in different asset classes.

What do they need to do to update themselves with regular happenings in the financial industry? Do you send regular updates to your clients?

The women need to update themselves by reading about basic financial terms which are available on all media, be it the newspapers, TV, social media and Internet. They should also attend Investor awareness programs which are held all over the country.

Yes, there are regular communication updates sent from my office to clients and prospects.

Should a women partner be aware about all the investment decisions taken by her better half? How important is it?

Women have different and more demanding roles as well as needs than men when it comes to investing. Studies have shown that women choose not to be solely responsible for their own financial well being over their life time. If they have somebody they can entrust this task, it is easily handed over to the spouse, father or brother.

They should be made aware as well as contribute towards the investment decisions made by their better half as it also acts as a safety net incase anything were to happen to their spouse. The least they should do is to understand the basic product in which the money is being invested.

Lot of study suggests that women are less aggressive than men when it comes to investing. What is your opinion? Can you sight some investment behavior of some of your women clients?

It is a general belief that women are more cautious investors as compared to men and this is true to a large extent. Women undertake due diligence before investing and are not so quick in jumping into investments based on rumors. It’s usually noticed that they tend to favor debt and mutual funds over direct equity while investing.

Typically, I find that the women clients take more time to trust. They tend to ask more questions and would like a rationale before deciding to go ahead with an investment. They tend to go more into detail than men.

What are the things that a women needs to look at while investing?

First of all, they should establish and set up their goals or their financial roadmap in other words. Second step is to establish their risk taking appetite as that helps in making the right decision regarding debt and equity investments.

Another important point to keep in mind is what kind of responsibilities the women has. Are there financial obligations required to be fulfilled? Example - Is parents or children dependent on her? In that case the risk taking capacity will be less compared to what she may like and that may change her investment allocations.

What are the few investment mistakes that you have observed being committed by investors?

  • Listen to people who don’t have experience in investing but are good at giving advice, especially the family members. While we respect them, the financial scenario has changed over the years and has become more dynamic. Hence it is important to take a professional advice.

  • Lot of people are looking for free advice. While free advice is available, it is important to see it in alignment with your goals/ objectives. Hence when you take professional help, you have to pay for the services. There is no free lunch.

    Do we go to a doctor who gives free advice? Do you think it would be given in your favour to help you get cured?

  • No Goal setting. While we understand the importance of goal setting in life, very few people practically follow it. Having a financial goal and tracking the same is equally important. There is a big gap between successful investing and unsuccessful investing.

  • Comparing your portfolio with peers. It is so easy to get influenced with the returns of what others have got. Each one’s situation is unique. Don’t compare your portfolio with others.

You are also the teaching faculty in some colleges, so, how would you describe the young generation and their behavior towards money management?

I teach at different colleges and would divide the students in three categories.

  • Who have inherited wealth from the family has casual attitude towards money. They are not too bothered with the placements or have focused goals.

  • Who are not so financially strong are hungry for good placement and have a saving attitude.

  • Students who have got some years of experience and have joined further studies have more focused goals. They are well aware where they want to stand in life and attitude towards money management is good. They believe in saving and are well aware about investments.

What are the services do you offer and how do you promote yourself?

Services offered: Financial Advisory Services and Consulting Workshops and Seminars. Financial Counseling to Students/ Gen Y

Promote my company: Through website / Blog / Social media. I believe that our existing clients are the best ambassadors of our profession.

Currently how many clients do you manage and what is your growth plans?

About 60 families. I want to further deepen the engagement with existing clients and plan to grow atleast by 10% year on year.

Any advice to investors?

Do your own research before investing.
Diversify across asset classes
Have a joint holding or nomination across all investments.
Try filling up the application forms yourselves as that could be an eye opener.

Don't get swayed by false promises in the market. Remember, it takes time to build a good portfolio – It may take years.
Don't get worked up on the short time volatility.
Don’t put all your eggs in one basket.