Every time I meet a new prospect for Financial Planning services, beyond the initial routine queries, the question that is inevitable is “Well, Aniruddha, what is the minimum portfolio size that you manage?”
Well nearly, almost all the time, I reply with a bemused look saying “it doesn’t matter!”
Well, if this raises your curiosity, let me clarify.
A Financial Planner helps secure the financial future of his clients. However, if you are wondering if people with insignificant savings are also welcome, then how would one sustain the cost of servicing the relationship?
For a better understanding, let me highlight the following from the purely commercial perspective of the business of Financial Planning. What is more desirable?
- Clients who will rely/depend on you for your advice? Or, clients who can live without you (not because you are not sufficiently skilled, but because they have enough resources that it just doesn’t matter who manages their finances)?
- Clients who will swear by the value-add that you offer after experiencing your services for a couple of years and then help generate referrals? Or, clients who are the who’s-who of society (good to boast at a party!). But, you alone know how tough it is to deal with someone who throws their weight around.
Actually some advisors who exclusively cater to this segment are perpetually pitching for new clients because in this segment both the advisor and the client are only loyal to their monetary interest!
- Clients who will have a disciplined approach to an agreed plan? Or clients who are perpetually willing to try the current flavor in the market? As the HNI database is a marketable commodity and cold-calls and sms-intrusions are still in vogue, DNC registrations not withstanding!
- Lastly, is there a correlation between the current net worth and future growth potential of a person? If, ever there was, it cannot ignore - the quality of the person, his education, professionalism, clarity of thought etc. – these are factors which decide the correct fit between an advisor and the customer. Did we ever mention net worth while debating this?
Give me a low net worth level headed 30 year old any day over a well heeled senior professional who is ‘too busy to spare an hour every quarter to review his portfolio!’ After all you can judge the maturity of your advisor by the way he manages his client-portfolio, right?
Professor C.K. Prahlad – God bless his soul, there is indeed a fortune to be made at the bottom of the pyramid!
