Adviser Perspectives: Distributors and Advisers are not astrologers

By Ravi Samalad |  06-04-22 | 
 

Vikas Sharma, Certified Financial Planner (CFP), does not fit into the regular tribe or traditional definitions of financial advisers. Though he is a first-generation entrepreneur, his approach to financial advisory business is progressive, futuristic, and in his own words - “A purpose-driven, life-centric initiative to deliver happy and meaningful life to the clients making the best use of the resources they have.”

Born and brought up in Delhi, it was during his graduation days at Delhi University that Vikas developed an avid interest in equity markets and money management which became his lifelong passion and drew him towards the investments and financial planning space.

Following his devotion to personal finance, he did a post-graduation in Financial Planning and accomplished CFP certification. Vikas also holds a PG degree in Business Management.

Vikas started his professional journey with a boutique wealth management firm in 2004. Later, he switched to Reliance Mutual Fund (now Nippon India) in the year 2006 where he learned the ropes of the asset management and distribution business for close to a decade. “I understood the best practices, the prevalent gaps and opportunities offered by the advisory business in India. I was certain that there is an urgent need to enhance the scope and quality of advice,” recalls Vikas.

Early days

Decade-long experiential wisdom and the zeal to do something more meaningful in life inspired Vikas to explore alternatives.

By now, he had examined all the dominant schools of thought in the financial planning space which gave him crystal clear clarity about the future course of his career, as well as the directions in which financial advisory should evolve.

Vikas was determined to be a purpose-driven entrepreneur and establish an organization that manifests his notions into reality.

Vikas Sharma along with his close friend and colleague Amit Khanna, quit their jobs at Reliance Mutual Fund and conceptualised and established Goalchi Capital Solutions LLP in the year 2016, a goal-based financial advisory firm based out of New Delhi.

Word ‘Goalchi’ is a conscious and creative amalgamation of two words ‘Goal’ and ‘Achievement’.

The idea behind this is that every investor should have a designated purpose, it helps in selecting the right products and more importantly, it makes investors mindful and sincere.

Coming from an AMC background, Vikas and his team didn’t have any readymade client base. But the passion for spreading financial awareness through talks and seminars became their first and potent client acquisition medium. The duo got in a lot of new clients to the industry who earlier invested only in traditional products.

Inflection point

At Goalchi Capital, the assets under advisory have grown swiftly, with the company currently managing an AUM of Rs 225 crores spread across different asset classes including mutual funds, bonds, corporate FDs and direct equities. However, Vikas made sure that his organization doesn’t follow the prevalent approach of the industry which was hinged upon earning the highest returns and recommending top-performing schemes, both of which are out of anyone’s control.

Vikas says that the industry is too narrowly focused on returns.

“Advisers are neither astrologers nor fortune-tellers; there is no logic behind trying to peg their value to market predictions. As advisers, our job is to prudently, rationally, and scientifically approach both asset and behaviour management of our clients.”

Vikas observes that the race to find the top-performing funds or assets class have taken over investors too which is not a good sign. “Investors are jostling to save 50-75 basis points in direct plans as they believe that an adviser/MFD is adding little value. Partly it is true in cases where the adviser-client relationship is transactional, but advisers must realise that they have abundant potential to deliver immense value.”

Although Goalchi Capital was on a solid growth path, Vikas was convinced there was still scope for delivering greater value to the clients. In the quest to deliver more impactful propositions to their clients; Vikas decided to take another voyage towards new learning and wisdom.

Vikas underwent rigorous studies in life and purpose coaching and earned many coveted national and international certifications, with the aim to apply the knowledge to his own practice.

To deliver such an invaluable and immeasurable value to his clients, Vikas developed a proprietary six-step process called ALPEAK®, which is applied with a holistic and novel planning module christened aptly by Vikas as Life Value Financial Planning (LVFP®).

LVFP® is a synergistic integration of the best practices of financial planning with the goodness of life planning and purpose coaching.

Dig deeper

Vikas narrates a personal experience of how he dealt with a client who was unhappy with his portfolio returns. “During an investment awareness seminar, a prospect approached me to undertake his portfolio. Apparently, he wasn’t satisfied with his existing portfolio generating 12.5% whereas his friend’s portfolio delivered 16% during the same period.

Once this client was onboarded, at first glance over his existing portfolio, I knew that the difference in return was because of his unique financial position, asset allocation, and risk profile. But it was through our proprietary Life Value Financial Planning (LVFP)® framework that I got the opportunity of having deeper conversations with him. Together we discovered that he was not happy with his career, which spilled over and negatively affected every aspect of his life.”

He wanted to compensate for his stagnated earning potential by generating more and more returns from his portfolio, a dangerous idea.

After a true diagnosis of the problem, Vikas helped him unstuck himself professionally. The client took the advice and upgraded his skills, became happier, confident and which ultimately helped him to grow in his career. This advice changed the clients’ thought process.

“During our training programs, I have shared this case study multiple times with fellow MFDs and almost all of them answered that they would have restructured the portfolio to seek higher returns. Their focus is to satisfy and retain the client at any cost, thereby losing the plot.”

Sometimes the hot pursuit of money can have fatal consequences, Vikas explains from his personal traumatic experience.

“One of my close friends returned from the U.S. to tap the potential of a vibrant start-up scene emerging in India. He was enthusiastic about his own venture here and worked relentlessly often clocking 18-20 hours a day.

In our meetings, I frequently encouraged him to switch to a healthier lifestyle. However, his determination of creating something big was always in the way, significantly impacting other facets of his life.

Two months later, he had a heart attack and by god’s blessings, he survived. While still on the hospital bed, he realised his folly and learnt a lesson very hard way that ‘Money is not the end; it is just the means.”

This personal incident became the tipping point after which Vikas aggressively transitioned his organization towards LVFP®, a holistic planning paradigm.

“We go beyond the basics of personal finance. We aim to find out the client’s core values, aspirations, their earnest dreams and not focus merely on materialistic goals,” explains Vikas.

Training module for MFDs/advisers

Vikas’s love and passion for sharing knowledge inspired him to establish TLA Academy Private Limited aka The Logical Advisor, with the objective to become the definitive information and knowledge resource for financial advisers and investors.

The Logical Advisor has created many programs for IFAs and investors. IFA Transformation Programme (ITP), a holistic course to upgrade and embrace the dynamic changes occurring in the industry was a hit among MFD fraternity as it touched upon the burning challenges and provided pragmatic solutions to tide over them.

Vikas’s earnest dream to accelerate towards his purpose of creating happy lives inspired him to impart his learning to fellow MFD/Advisers and to kick-start a chain reaction. The aim is to help them create a more meaningful practice through Life Value Financial Planning (LVFP®) and impact more and more lives.

Vikas is also working on launching two books for advisers/MFDs and clients soon.

Find your value proposition

Vikas emphasises that the better the value proposition, the better the stability the adviser/MFD will have in their practice. “This requires a change in the thought process which can’t be achieved with a product-oriented mindset.

Do plumbers show you the tools that they have? They do their work. Have you ever seen a doctor talking about medicines? They advise and show their expertise. Unlike ours, we showcase products.  The value proposition should not be based on products but the outcome.”

Vikas and his team practice everything that they preach and their insights are based on real-life examples of running their own practice. “The process we follow rejuvenates the client-adviser relationship helping us deliver an impeccable client experience. Our clients find the approach comforting enough to share information that they have never shared with anyone.

Goalchi Capital was never created to chase clients or AUM in the traditional sense, its purpose is to design the best lives for individuals. “We try to onboard only those clients that appreciate and believe in our philosophy and generally avoid investors only looking to make the highest returns.

Our firm has its own values and purpose; we tend to serve clients who have similar values. This way it helps us avoid conflicts and lose unnecessary energy. Our complete focus is on delivering a happy and fulfilling life to our esteemed clients.”

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