World over, there has been progress in different businesses and industries. From shopping to socializing and from communication to commutation – there has been a sea of transformation in every field. The business of financial advisory is not far behind and has seen many changes over the past decade. However, we believe that this industry, which is constantly under the SEBI’s attention, will see more changes in the days to come. Here are some things to watch out for:

Sellers to advisors: Although there are financial advisors who are genuine in their advice, there are some players who push third party products to clients solely based on the gains they make by selling such products. SEBI’s Regulations for Investment Advisers, released last year specified several requirements and stipulations for one to become a financial adviser. This is the first wind of change we can see in this direction. Going forward, we expect clients giving more and more importance to pure play advisors as compared to those who also sell financial products. This is on the back of receiving unbiased advice, keeping in mind only the interests of the clients.

Specialized service providers: Most advisers provide similar kind of advice, based on certain broad, generalised parameters. They have certain standard guidelines and not much customization is done. It won’t be long before this changes and clients would start giving importance to specialized service where advisers customize every facet of the financial plan and give that extra factor to grow the client’s wealth. Price differentials will also kick in, with value-add services being charged a premium over generalized advice.

Focus on certain client types: Another change expected in the near future is clients looking out for advisers who focus on certain client categories. For instance, a lawyer may want to opt for an adviser who has several clients who are lawyers, or a retired person may prefer someone with experience in handling retired clients’ portfolios. It is logical that no planner will have only one category of clients. Nevertheless, having many clients with the same background or in the same profession can give an upper hand in terms of pitching to new customers.

Importance on certifications: Customers will soon start giving more importance to financial advisers who possess certifications and licenses, than it is done at present. Advisers possessing SEBI registration will definitely stand to gain and this can prove to be a huge positive in the competitive scenario. SEBI’s Regulations for Investment Advisers already speaks about such requirements and it is only a matter of time before clients start to realize its importance.

Client confidentiality: Client confidentiality and privacy of the client’s information is of utmost importance in a financial adviser’s business. Under no circumstance should this be compromised or misused by the adviser.  Going forward, it is expected that the regulator will bring out a strong set of guidelines to ensure client confidentiality. Advisers on their part will be expected to ensure that what is entrusted to them is absolutely safe and professionalism will be maintained at all instances.


While the above is an original article written by us, we are inspired by a related article on Advisor Perspectives and the associated checklist.


This article was originally published on Network FP