Lack of financial literacy is a challenge in India and at the same time it's an opportunity for financial planners, says Susan Bradley, founder of the Sudden Money Institute (SMI) in an e-mail interaction with Moneycontrol's Himadri Buch. Bradley, a renowned thought leader in Financial Transitions Planning visited India recently on the invitation of DSP BlackRock for conducting a series of sessions for the financial advisory community across different cities in India.Below is the verbatim transcript of Susan Bradley's e-mail interview. Q) First, what is the importance of Financial Transitions Planning in today’s context?
Financial Transition Planning addresses both the uncertainty of the future as well and the complexities of managing a current major life event. Most clients will hire a financial planner to prepare for life’s major events: retirement, death of a parent or spouse, inheritance, sale of their business, stock options and other liquidity events. Traditional financial planning addresses the technical side but decisions are made and well-being is experienced on the personal side. The financial transition planning model begins on the personal side and then integrates with the technical. Both sides of money are equally important and equally complex. The personal side is the human experience of relationships, hopes, dreams, fears, self-esteem, stress, anxiousness and uncertainty. This is the side of money that ultimately determines the success of a relationship with a financial advisor. The personal side drives hiring, implementation and retention of a financial advisor.
Q) What are the challenges and scope of growth for financial advisors globally?
Advisors always struggle with time issues, they are required to balance their time between managing the business, the clients, prospects and continue their education. Advisors around the world are considering business model options that work best for them and their clients - partnerships, going independent, joining large firms and for some being employed by large companies to provide in-house financial planning. Each country has its trends but none seem to have settled on the one best model for their population.
I find that advisors benefit from networking with other advisors at conferences, workshops or other events; this is the way ideas are spread and new possibilities are considered. India benefits from a few strong leaders within the profession what Lhave created annual events for education, networking and relationship building. These events may be the single most important aspect of growing a new profession and then keeping it healthy as it faces the natural challenges as they arise.
Regulations, new and existing are challenging for any profession, each country has a natural struggle with this. India may benefit from learning from other countries and then figuring out what works best in India.
Q) What is your take on financial planning in India? What do you see as the need of the moment?
At each of the five events I led or participated in I heard the majority of advisors at the event state these three beliefs:The public does not yet understand or seek out financial planning, clients are slow to implement advice, and in general they are not ready to pay directly for advice.
Lack of financial literacy is the reason given for these challenges. I see this as a great opportunity for financial planners in India. Increasing national financial literacy is an essential effort but it takes a long time.
Planners can immediately improve upon the three challenges in their client engagements by increasing their own skills on the personal side of money. Perhaps it is not always the lack of financial literacy but a lack of knowing each client’s individual preference for receiving and personalizing information and recommendations, or how to hear and prioritize all the clients concerns not just the ones that are solved by a traditional planning techniques.
Q) How was your experience in India and the kind of response you have received from India in terms of financial transitions?
The response was very good over all. I believe Indian advisors have built a solid foundation on the technical side of planning to be ready to advance to becoming experts on the personal side.
The advisors at the workshops were engaged and appeared to see the immediate usefulness of the two tools that I presented along with Lovaii Navlakhi, who has been through the CeFT training and certification process. They did not hesitate to join in the experiential learning exercise on communication preferences. The most common comment was that it felt really good to be asked how they wanted to be communicated with, and that it felt even better to be listened to and valued. Hopefully, this gives many the confidence to offer this experience to their own clients.
Q) According to you, what are the key take aways and learnings for financial advisors in India?
It is a very good time to be a financial planner in India. It is easy to make comparisons to the US and say India is where we were ten or twenty years ago. That may be the case today but I believe India will advance more quickly than we did in the US because of social media, the general dynamism of India’s well educated young and middle age population and the willingness to learn from other countries around the world.
The leaders have to create their profession as they grow, the followers benefit from the experience of the leaders. The dedication to professionalism I witnessed causes me to believe that India may someday be a leader in the profession of financial planning.
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