Advisers wear the coaching hat

Mar 19, 2018
As markets evolve, the demand for trainers to coach distributors is gaining traction.

No matter how skilled we are, we all need a coach or guide who can provide us guidance when we hit a wall. Even companies hire business consultants if they are facing hurdles which can’t be resolved internally.

When Mumbai based adviser Vinayak Sapre quit his job at Franklin Templeton, he identified this gap in financial advisory profession. “In the corporate world, decisions are taken in a group. But advisers who operate individually don’t have an opportunity to take decisions by considering different perspectives. Neither do they have bosses nor they have a coach. Advisers guide their clients but they also need advice on putting proper processes in place to manage their business efficiently,” says Vinayak.

Sensing an opportunity, Vinayak set up his consultancy firm IFA Insights along with his colleague Usha Mallya in 2014. They provide business solutions in human resource, or HR, customer service, operations and business development.

Budding advisers as well as those who have built a decent asset under advisory, or AUA, can get stuck in areas like talent acquisition, training, streamlining processes and managing a large retail client base. So where do they look for a solution? While advisers have an option to consult their peers informally, Vinayak says that even if they get tips from peers, they seldom implement.

This is where professional services help. Many of his engagements are for six months to one year, which ensures that the progress is tracked, and clients are working towards achieving their goals. Sharing a case study, Vinayak explains, “One of my distributor clients had a large retail client base and servicing them was posing a problem. It was an operational hurdle. He wanted to prune his clientele and focus on high net worth individuals, or, HNIs. We advised him to write a polite letter to these set of clients stating that we will continue to service you for redemptions but not fresh investments. The distributor parted ways with 600 retail clients. Now, he is able to devote more time to his HNI clients and manage things efficiently.”

While Vinayak says that coaching is not yet as remunerative as compared to his advisory practice he continues to pursue it for his passion.

Vinayak is not alone. Many advisers and former fund professionals are venturing into this space. While some do it professionally others are doing it for a larger cause of helping the advisory community without any commercial consideration. For instance, Mumbai based advisers Roopa Venkatkrishnan and Sanjay Khatri regularly travel across India to share their wisdom with their peers.

In 2008, Amit Trivedi ventured into training with the aim of helping advisers get better at their practice. In his previous role, he handled the independent financial adviser, or, IFA channel, at Franklin Templeton. His firm Karmayog Knowledge Academy provides training to advisers as well as conducts investor awareness seminars. “When I set up my venture, there were sales trainers but they were not familiar with mutual funds,” recalls Amit. He vividly remembers his first training assignment with DWS Mutual Fund (now DHFL Pramerica Mutual Fund) where he addressed distributors about the importance of debt funds, a category ignored by many distributors earlier.

Amit has delivered 1,100 trainings across 110 locations on topics like sales, financial planning and building a sound practice. While delivering 1-hour session sounds easy, it requires extensive travel and up-to-date knowledge on latest developments. “I have to do a lot of reading on varied subjects, attend conferences and meet distributors to speak for one hour. That’s not easy,” says Amit.

Do distributors connect with trainers who have no firsthand experience in advisory? “Advisers who offer training to their peers tend to connect with the audience well as they have would have faced similar experiences. On the other hand, independent trainers like me who are not into advisory offer second hand knowledge. But advisers can’t be riding two horses as training requires tremendous time and effort,” cautions Amit.

From his interactions with distributors, one issue which he has often come across is that many distributors don’t have the resources to hire experienced talent and pay them competitive salaries. Thus, they often end up hiring inexperienced people and invest time in training them. “This takes away distributors time which they should be spending with clients. My recommendation is to allow employees to make mistakes and learn from them rather than achieving perfection. You need to empower your team,” recommends Amit.

Post the financial crisis in 2008, Amit feels that distributors who survived this turbulent phase have got serious about their business and investing their time and money in acquiring new skills, which is a good sign for the industry. “Earlier, fund houses were offering training to help distributors pass the National Institute of Securities Markets, or, NISM,  Mutual Fund Distributors Certification Examination. The training subjects have evolved with times. Now, fund houses want to train distributors on behavioral finance, HR, marketing, sales, products and soft skills,” observes Amit.

Chennai based adviser S Srinivasan ventured into training five years back. In his earlier avatar, he worked with fund house like GIC Mutual Fund and Sun F&C Mutual Fund in marketing and sales positions. Srini, as he is fondly known among his peers, got into distribution of mutual funds in 2004. He got this opportunity when he was approached by Centre for Investment Education and Learning, or CIEL, to conduct Continuing Professional Education, or, CPE, programmes for distributors. Since then, he has been conducting CPE training across South India. Besides, he also speaks on topics like business development and marketing for advisers through tie ups with local IFA Associations and fund houses. With five years into training, Srini has completed 80 programmes so far.

The old days of picking up application forms and submitting them at registrar and transfer agencies, R&Ts, are gone. Clients are starting to question distributors’ value add, especially after the introduction of direct plans. In such a scenario, distributors need to upgrade and reinvent themselves. Experts believe this presents a huge opportunity for trainers.

Most advisers posses the technical skills required to handle client portfolios. However, a business which is built upon relationships, communication skills is just as important as technical skills.  A reserved personality who feared public speaking throughout his academic life, Kolkata based distributor Kanak Jain now coaches his peers on honing their public speaking skills and personality development. Spotting an opportunity, he set up a training institute called Nirvana Life along with his wife in 2006. They conduct full-day programmes for advisers on topics ranging from sales, graphology, handwriting, soft skills to client engagement. Besides on ground trainings, they have developed novel tools like volatility game, books, presentations and videos which are licensed to advisers for a subscription fee.

With professionals from different backgrounds getting into training, the competition has certainly increased. But the market is huge.

Former head of marketing at Tata Mutual Fund, Dharmendra Satapathy got inspired to change track after attending a session addressed by Prakash Rohera, a corporate trainer who runs The Redwood Edge training academy. Dharmendra’s new-found passion led him to start Next Level Education which conducts investor awareness programmes and coaches distributors. He has been speaking to distributors across the country through training sessions organized by Birla Sun Life Mutual Fund. Majority of distributors attending his sessions are budding advisers, managing assets between Rs 7 crore to Rs 15 crore looking to grow their business beyond referrals. Brand building, personality development, business growth, institutionalizing an advisory practice and prospecting are some of the topics he covers.

Industry experts believe that the demand for such trainings is expected to increase due to lack of formal education and coaching available for financial advisers. Today, people looking to enter this profession can take up advisory license by passing a rudimentary NISM-Series-V-A: Mutual Fund Distributors Certification. Most of the learning happens on the job. Many established advisers and former fund professionals are looking to fill this skill gap, which can’t be learned from textbooks.

The opportunity is so huge that Dharmendra is setting up an educational institute called Financial Patshala which will conduct full-day programmes across the country.

While the trend of coaching financial advisers is still nascent in India, it is a thriving business in developed markets. There are many firms and individual trainers like Stepehen Wershing, Suzanne MuusersCEG Worldwide LLC, Oechsli Institute, Peak Advisor Alliance, that provide customized coaching programs for advisers.

Back in India, few fund houses have dedicated teams to conduct adviser trainings. Sessions are conducted by internal staff on products and external speakers are invited to speak on topics like sales skills. But not all fund houses see value in offering this to their partners. Experts say that some companies consider training as a cost while trainers are of the view that the returns from this investment are intangible and accrued in the long-run.

While the number of fund houses offering training has gone up, not all fund houses are into it. It could be perhaps due to the open architecture distribution system and no tangible benefit accruing to the fund house directly. Nevertheless, fund houses which conduct trainings consider it as value addition to build brand loyalty.

Empowering distributors is gaining traction among fund houses but some are cynical. Few fund officials we spoke to say that trainings conducted by fund houses are not necessarily valued by distributors.  “If you do not conduct the training in a five-star hotel you are looked down upon. We had done a lot of Association of Mutual Funds in India, or AMFI, certification trainings in 2000 but today we feel it has not yielded any results. Despite continuous coaching, the conviction level has not improved. We see their clients behaving irrationally when markets turn volatile. If these trainings were helpful, we would not have seen a dip in systematic investment plan inflows in February 2018. Moreover, big distributors don’t attend trainings. When there is a bull market, you don’t find takers for training as business comes easy,” says the CEO of an emerging fund house wishing anonymity.

Nevertheless, trainers are looking forward to a bright future for themselves.

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