The most important questions you must ask your Investment Consultant before you join him

 

4^th September 2020

The most important questions you must ask your Investment Consultant before you join him

Dear Fellow Travelers,

Namaste! Our investment education series is welcomed by our readers and many have come up with the questions. Many have asked the title question in a different form. They like our suggestion of appointing an investment consultant but they have genuine doubts about how to appoint one for them. What are the criteria they should look into him? Let me deal with this.

Let us deal with some of the normal questions of Masses.

1.   What are your fees? If they survive this question….

2.   What is the guarantee that I will cover my fees and make money?

3.   How much return I can generate?

4.   How will you provide the services?

5.   How many clients do you have? How much money they made last year?

6.   How do you see the market?

7.   When will Corona go?

8.   Will Trump be re-elected? If not, what will happen to the market?

9.   What do you think about India-China- Pakistan War?

10.                How the market will be affected by these events?

11.                I have always made losses in the past, do you think, if I join you, I will make money?

12.                Which sector will move Now?

13.                CNBC is recommending A B C stock to buy, what do you think? Should I buy it?

Just patiently study the above questions. Many of you might also have this kind of question. Many would have already asked many times to their consultants.

The funniest aspect of these questions is – not a single question talks about the client’s goal-dreams and purpose of investments/client’s time and money investments / client’s involvement and commitments.

The client is not ready to discuss them or commit to the above issues. He assumes – since he is appointing a consultant – consultant should do some magic and without taking Risk- Efforts and Pain of investing, Client wants to make tons of money.

Let me share a meaningful Zen Story: -

A would-be disciple went to Guru and asked I want to join your ASHRAM. What will be my role? Guru said – you will have to go to Jungle to cut the wood / prepare food for all / do the utensils / sweep the floor and do the other work as I say. When the time is ripe, I will teach you about the truth.

He found that this is too much pain. So, he asked the Guru, what is the role of Guru?

Guru replied – I will sit here and ask you to do all these things.

Then the would-be disciple said – I would like to become a GURU first.

This is the situation of MASSES when they go to the Investment Consultant.

How Mukesh Ambani Selects His CEOs?

The meetings are over in just 2 questions. Before the meeting starts the would-be CEO has been shared the details of the plant or business he is supposed to head. He is told about the management expectations for the next year and more.   

When the meeting starts – first questions – How much money you will need to carry out the operation? How much return you can generate for me (Mukesh Bhai)? You take what you want and you give me what I want. See the simplicity at the top.

Think on these two questions – they ask for the commitment from both sides. Both are independent and both are dependent at the same time.  

What should you do when you meet your prospective consultant next time?

1.  Share your goals in money terms, not some general idea. Say you need Rs.50 lakh for Marriage of your daughter in the year 2028 rather than I will need big money for the marriage of my daughter in the future.  

2. Explain your current situations and priorities to him for the coming period. What kind of funds is available right now for investments for your future goals? Say you have Rs.10 lakhs now rather than I can arrange the funds as the consultant says.

3.  Once the consultant understands the above two – ask him – can you help me achieve these goals?

4. If he says – yes, ask his FEES, pay the fees and start the relationships.

Do you think this can take more than 10-15 minutes?

This will give you control on your performance and consultant’s expertise – irrespective of the situations in the future.

My experience with HNI is the same. They don’t waste time in Non-sense questions and answers. They know what they want with clarity and they know how to communicate with clarity. When they communicate their goals or vision with the consultant – his job is also cut out with clarity. They are not concerned with what he does? / how he does? / what will happen to the Market? kind of questions. That is the consultant’s lookout.

What Masses do when they go to Doctor?

Masses takes the above 4 steps only when they go to the doctor. Masses develop the clarity in the times of utter pain or emergency. HNI has clarity all the time.

Say somebody has severe chest pain and he goes to the doctor.

1. He will share his pain details and ask doctors can he help him to recover from this pain ASAP?

2.   What will be doctor or hospital charges?

3.   He pays the charges and the doctor will repair his body.

4.   Post-treatment – you will follow all his precautionary measures and meet him for follow up checking without fail.

Can you see the simple ways in which you deal with the situations when you have acute pain or emergency?

Do you waste time in asking any nonsense questions to doctor about hospital or medical science or corona at that time?

Now a question may come – what about the consultant’s background and skillsets?  

Before Mukesh Bhai meets the would-be CEO – he would have got all his details. So, his job is to just close the deal. In practical life, they work with REFERENCES or the publicly available track record of the consultant.

·     When there is a reference – the faith is there from the beginning on the consultant and his skill sets. So, don’t have to waste time on them.

·  When publicly available track record is there, they study that before meeting the consultant. If I share my experiences – my blogs are the best testimonial for my skill sets. Prospective clients read them over a period of time or read the past posts randomly when suddenly they get one post. They decide to join me. They call me/ write to me and come to meet me if possible and join me in flat 5-10 minutes without wasting time.

·      I have not met 90% of my NRI clients personally in the last 23 years of my business as a consultant so far. No video meeting also. I have not met 50% of my resident clients in India. Just a phone call/email and relationships are going on for years. When they come to Mumbai and if they have time we meet for a while. Otherwise, no need to meet.  

What Now?

Know what you want with clarity before you go to the market to appoint a consultant. If you are not clear with your purpose – even the GOD will not be able to help you.

Those who are not clear with purpose – they do a window shopping of various consultants without looking into the window of their heart. They waste their time and life in the process. They are full of opinions on all the Worldly issues but they never end up making a big money.

Make your choice.

Wish you all a very Happy Weekend.

Hitesh Parikh.