Miniscule knowledge or understanding of one's business and its operations
impacts the business in the long run. However, a vast majority of companies are
still thriving in their businesses with cursory knowhow of the business and are
complacent with the meagre profits they generate. As a result of this, they are
never able to deliver or perform to their fullest potential. This loss of
performance can be accounted to several factors like improper understanding of
their target segment, employing wrong or compromised modes or channels for
delivery of goods and services, or hiring an unskilled workforce that lacks
Wealth management or private banking is one such industry, that is one of the
most misunderstood businesses in India. And the irony is that itís not just
misunderstood by its practitioners but equally misunderstood by the patrons.
Both the parties have a huge disconnect between what is to be delivered by the
practitioners vs how it's in turn perceived or received by the patrons. It is
misdeemed and compromised on many operational facets like catering to the wrong
target market, quality and calibre of people, Inappropriate training and a half
baked sales process. A plethora of these so-called wealth management companies
had probably jumped the bandwagon mimicking their competition and do not know
what is it that they are exactly into and have a very little idea about their
business proposition as some think they are stock advisors some call themselves
bankers and some think it's a piece of cake to multiply clients wealth.†
For years they have been putting wrong people to manage clients wealth.
To my mind, very few managers are capable of actually advising clients on wealth
creation. For the fact remains, that none of them has the right qualification or
more so relevant experience to advise clients. As a wealth manager, your job is
to build up a strong relationship and ensure clients assets are appropriately
allocated in the right asset classes based on his life stage needs. The first
meeting with the client, the manager sells himself as an aficionado of sorts and
ensures that the client comes to believe that nothing can go wrong as for as his
money is concerned. Client buys into his bullish outlook and decides to give
this chap a chance.
This is the biggest mistake WMís make while misportraying themselves as a
magician of some sort when the fact remains no wealth manager can make such tall
claims showing just the rosy picture to their client. They are rather supposed
to educate the client on how investments function, the time horizon, and the
profit and loss elements of investing. If a WM backs a particular fund or
scheme, it doesnít necessarily mean it will deliver the said forecasted returns.
But for the fear of losing a sale, most managers end up blowing their trumpet
and end up making false commitments.
Honestly, it is the fault of firms and leaders who allow and encourage such
pitch. Lack of right soft skills and a pitching process are two major gaps in
this industry which make the business suffer. So you have hired someone who is
going to deal with a 200-300 crore wealthy guy and what exactly is he going to
go talk to this client? Even veterans with 20-35 years of domain experience go
shaking in front of clients when it comes to delivering the first pitch.
They are not trained and therefore have a pitch and process that goes missing.
The fact that most wealth managers lack in-depth knowledge of competitions
products (as the product universe is so vast and they barely know their products
too well), clients usually tend to test a WM'S knowledge basis his awareness of
technicals and products performance across the industry and in the absence of
right objection handling skills to discreetly address such queries/objections,
wealth managers mostly start bullshitting and resort to undermining competition.
At times some seasoned and market savvy clients outsmart managers as for as
knowledge is concerned so it's foolhardy to debate with clients in such areas
where he or she lacks.
As a WM, you only need to do a cursory study of clients portfolio and forward to
the technical team for analysis and yet again apprise him of what you told him
in the first meeting that all you will do is manage his allocation. He or she
needs to rather focus on understanding clients investment objectives and goals
and not nail him down on his portfolio performance and pitch his products
without proper analysis.
To make you understand this better here's an analogy, suppose a car salesman
goes on talking more in detail about the spare parts used in making the vehicle
rather than focussing on selling the car based on its key features and the
client, in turn, goes about shooting him/her with more and more questions on the
spare parts. The salesperson being technically challenged in this domain or
space can only answer the basic questions post that he would go bonkers and
start bullshitting. So you are only good to sell him the car based on key
features and this requires special skills and objection handling ability to
expand a conversation with the client for you to align the key features with
client requirements and convert into a sale.
When you are meeting some big promoter or an HNI client, he is all the more
inquisitive, what you do and what you can do for him as he has already met many
like you, who have failed to satisfy his investment needs or failed on
These firms need a good training module and a standard content to be
passed on to all client-facing employees to help them set forth their
expectations. They need people who can relate and connect well with someone
bigger in stature. So yes confidence is what you need in tonnes to go out and
talk to such clients. Which I am sure they do have but somehow it's not being
exercised rightly in their presentation.†
Forget about a meaningful face to face interaction with the clients, being from
the industry, I have observed many managers murmur and fumble over the phone
with prospects when seeking the first meeting with him or her. Honestly, its
three things in a nutshell that lead to this failure. Wrong self-portrayal (Lack
of a good pitch), Wrong attitude and low confidence levels (Not being able to
project yourself as a concrete value provider) and thirdly you need to follow a
process (You canít nail a deal in one or two meetings). So itís a stepwise
process that one needs to follow which majority of firms do not follow. As a
result, this hit ratio is very low.
Again, this is a training need overlooked by the firms. Sectors like insurance,
FMCG, consumer durables, for that matter are better equipped as for training
needs are concerned. Remember that eureka Forbes sales guy....his pitch and
style. Do you think he can ever miss the line† I am sold? Given the
proficiency, they have on the product and add to that the skills they have
acquired in handling objections they would rarely miss a sale. Wealth managers
barely match such excellence because most of them pitching in the space they are
not trained into and more so they lack in the consultative style of handling
?Your conversation with the client needs to evolve out his objections and not be
inclined to avoiding his objections with the frequently used cliched line I will
come back to you. Unfortunately, this is the only Joker or Brahmastra
a manager has while trying to handle an objection when he is all blank.
And the root cause why clients shoot technical queries is the wrong perception
created by the WM's that they know it all. Well, you are not supposed to answer
and know everything so better educate your clients what you are there for and
tell him you selling him the process of advisory.
Wealth management is an investment advisory service that combines other
financial services to address the needs of affluent clients. It is a
consultative process whereby the advisor gleans information about the client's
wants and tailors a bespoke strategy utilising appropriate financial products
By trying to answer every technical query and parking it to never come back to
it you are steering the discussion in the wrong direction because you never took
the right direction in the beginning. Most wealth managers lack the diagnostic
approach to identifying the problem.
They need to approach the client more akin
to health practitioners, who tend to diagnose the disease based on symptoms and
accordingly prescribe the treatment. Hope the industry awakens soon and one
could see a good transition and we could match up with wealth management and
private banking professionals in the western world.