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If you have articulated your vision of where you want to be in 2024 and have made your road map (plans) on how to get there, you now need to move into the next phase. This phase is about equipping yourself sufficiently to complete the journey successfully.
Think of how a mountaineer prepares to scale a peak
Think of a mountain climber : he sets his eyes on which peak he wants to scale, he sees a vision of himself on top of that peak. Then he makes a detailed plan on how he is going to climb the mountain - which face of the mountain, where will he stop, what are the treacherous parts, how will he navigate them, what are his contingency plans etc. Once he has made his plans on how to scale the peak and realize his vision, he then starts assembling the equipment he needs. He draws up a list of all the expertise needed to achieve this task and makes an appraisal of his weak aspects. He begins training to enhance his skills in his weak areas, until he has conviction that he has all the skills and the equipment that are required for him to successfully scale the peak. Often, this training and preparation will involve scaling some smaller peaks as testing grounds before he is fully confident that he is ready for the BIG one. Only then will he embark on the mission to conquer the peak in his vision. Only when he has a clear plan and has confidence that he has equipped himself well, will a good climber begin his assault on the peak. Rarely would you find a climber who says he dreamt of scaling a peak and then started off the next day trying to climb it.
This applies equally to you and your business as well. Its great that you know now where you want to be in 2024. Its wonderful that you have made crisp plans on how you are going to get there, and have established milestones for yourself to check whether you are on course periodically. Now comes the evaluation of yourself - do you have all it takes to make this journey successfully or do you need to first enhance certain skills that are necessary for this journey?
4 categories of skills you require to realize your vision
Here are some of the skills that you will need to possess for taking this journey of growth successfully. We have clubbed the skills into 4 categories - and product knowledge is only one of them. The four broad skill set areas are :
- Product and market knowledge
- Advisory knowledge
- Practice management skills
- Customer engagement skills
Skills and knowledge within these 4 categories are listed below. Some of these will be discussed in more detail in forthcoming articles. The list should however enable you get started on analyzing where you think gaps exist in your own skill sets.
Product & market knowledge
The bottom line on product and market knowledge is for you to have an ability to independently formulate your view on equity and fixed income markets and opportunities, on the basis of which you will be able to independently evaluate products. Product and market knowledge can be divided into 4 sub-categories :
- Macro economics : understanding of macro economics is essential to appreciate impact and implications on debt and equity markets of changes in the economic and policy landscape
- Equity markets : This will include an understanding of how equity markets work, understanding of equity valuations, equity management styles and equity derivatives. You should be able to independently form your views on markets and market segments and evaluate independently different equity products that product providers will come up with from time to time
- Fixed income markets : This will include understanding of fixed income market variables, monetary policy, fixed income strategies and fixed income product categories. Like with equity, you need to be able to independently form your opinions on fixed income markets and opportunities, on the basis of which you will crystallize your independent view on fixed income products.
- Fund evaluation : You will need to understand fund analysis - risk and return ratios and metrics - which will enable you to determine how to evaluate funds and perform your own independent analysis and arrive at your recommendation list based on criteria you are convinced about.
When going through this list - in this category as well as the next 3, it may be a good idea to flag aspects you are very confident about and write down those where you think some more work is required. The list which you write down will then become your personal upskilling to do list.
Advisory Knowledge
Understanding financial advice is quite different from understanding financial products. In advisory knowledge, you will look at developing skills that help you understand client requirements and apply your product knowledge to create strategies that help clients meet their objectives. Three broad areas need your attention in this category :
- Financial planning : As we all know, the process of helping clients articulate life goals, quantify them, create plans to fulfill these goals and monitor progress on an ongoing basis, is vital in helping investors achieve their dreams and aspirations.
- Wealth management is widely regarded as more comprehensive than financial planning, and includes several strategies that help affluent clients protect and create wealth and manage intergenerational transfer of wealth.
- Portfolio management deals with the art and science of managing investment portfolios to deliver a suitable risk adjusted rate of return. This has more to do with casting and managing investment portfolios, and less to do with life goals of investors.
A good advisor, who wishes to address a wide range of investors, should aim to build proficiencies across all these 3 aspects, as different clients may need different types of services from their advisor.
Practice Management skills
Beyond product knowledge and advisory skills, there are many more skills that an advisor needs to sharpen to build his or her advisory practice into a large and successful one. One important aspect is practice management. Practice management, as the name suggests, deals with how to run your advisory practice. Some of the underlying skills that will enable you to grow from a single person business into a large team and multiple offices will include :
- Process orientation : From being the person who does it all, you need to re-orient your thinking to create processes for everything you do - product research, advice, operations, customer service, compliance. From jumping in to deal with every issue, you need to train yourself to write down how these issues are to be dealt with and train your team to do it. You need to train yourself to do less of ad-hoc decision making, and more of process oriented discipline. This alone will give your team clarity on what you expect them to do, in each situation.
- Project management : Managing growth is about setting up multiple projects, creating detailed project plans and executing projects efficiently to enable desired outcomes to be achieved. Whether the project is about creating teams or targeting new client segments or setting up new offices, each of these needs to be carved out as a separate project and managed alongside your ongoing business.
- Team building : Your growth aspirations critically depend on your ability to create, motivate and retain a team that will work with you and help you achieve your plans. This calls for a very different set of managerial talents, as opposed to running a one-person show.
- Problem solving : You need to develop skills that will help you analyse problems, deal with them effectively by attacking the root of the issues, and fixing processes to ensure no recurrence of these problems again. You need to develop a skill to make optimal choices in a rational manner.
As can be seen, these are all managerial skills that you will need to develop, for you to move up from a single person operation to the head of an organization.
Customer Engagement skills
The last of these 4 categories - but arguably one of the most important, is customer engagement. This deals with the skills required to relate to and understand clients better and engage with them in a manner that deepens relationships and enhances trust. Some of these skills include :
- Communication : Being a good listener and an effective communicator is the first important step to building lasting client relationships
- Behavioural finance : You need to understand how an investor's mind works, what motivates them to take investment decisions, what stimuli work in what kind of conditions and why investors often make mistakes in managing their money. This field of study is called behavioural finance, which is a must-learn for any financial advisor
- Selling and marketing : Advisors are generally poor in selling and marketing, because they sometimes spend far too much of their time in honing only their advisory skills. Learning marketing and selling techniques and skills is imperative for an advisor to grow rapidly, especially in a competitive market.
As we mentioned earlier, it would be useful for you to highlight from the above list, which skills you think you need to develop more, in order to help you prepare for growth in a structured manner. Once you have made this shortlist of "areas of development", your energies must get immediately focused on how to learn and hone these skills and close out these knowledge and skill gaps.
A simple step after you've got this list together, is to scan all the training courses that fund houses routinely invite you to. Is this training program going to help plug a gap in your skill sets? If not, why do you want to attend it? And, the next time a fund house engages with you on how best you want them to support you, give them this list and ask them which training program that they conduct will help address any of the issues in your list. Or better still, get together with other advisors in your city who may have the same skill gap and approach your favourite fund houses with a request to create and conduct a program on these aspects.
Once you know exactly what your skill gaps are, you will certainly be able to find solutions to address these gaps. The important thing is to create your short list from the exhaustive list above and get started.
Content is created by Wealth Forum and must not be construed as an opinion by Reliance Mutual Fund.
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