Financial planning-and-profitability1-1215803327141725-9

IMPORTANCE OF IMPORTANCE OF FINANCIAL PLANNING FOR FINANCIAL PLANNING FOR

SUSTAINABLE SUSTAINABLE PROFITABILITY.PROFITABILITY.

ByBy

Kaushal MandaliaKaushal Mandaliakaushal@thefinancialplanners.inkaushal@thefinancialplanners.in

GLOBALIZATION AND FINANCIAL SERVICE GLOBALIZATION AND FINANCIAL SERVICE INDUSTRYINDUSTRY

Globalization andPrivatization

Entry of Private Life Insurance

Companies And AMCs

Multiple Distribution

Channels

AgentsBanks

Brokers

AttractiveRevenue

Model

Target DrivenContest DrivenRevenue Driven

UnexplainedComplexities,Unnecessary Arguments,

Unsatisfied Customers

No Referral SaleLower Profitability

IMPLICATIONS….IMPLICATIONS….

Perception of Equity as Universal Investment Solution.Perception of Equity as Universal Investment Solution.

Focus on Product – Which is not a sustainable Focus on Product – Which is not a sustainable

competitive advantage.competitive advantage.

Unsatisfied Customer.Unsatisfied Customer.

Wastage of time in handling crisis / queries.Wastage of time in handling crisis / queries.

Less Referral SaleLess Referral Sale

High Customer Acquisition CostsHigh Customer Acquisition Costs

Lower Long Term ProfitabilityLower Long Term Profitability

Lower Employee Satisfaction, Higher Attritions.Lower Employee Satisfaction, Higher Attritions.

We are suffering of Two Major We are suffering of Two Major Illness…Illness…

TARGETOMANIATARGETOMANIA A presumption that Client is a solution to meet your target or to A presumption that Client is a solution to meet your target or to

ease out pressure from your Boss / HO.ease out pressure from your Boss / HO.

PRODUCTOMANIAPRODUCTOMANIA A perception that Client is a Prospect for Life Insurance (ULIPS) or A perception that Client is a Prospect for Life Insurance (ULIPS) or

Mutual Fund (NFO) or PMS where revenue is higher.Mutual Fund (NFO) or PMS where revenue is higher.

We Can Change our Belief We Can Change our Belief System….System….

CUSTOMER IS A REASON FOR OUR EXISTANCE CUSTOMER IS A REASON FOR OUR EXISTANCE

HE IS NOT A STRANGER IN OUR PREMISES. HE IS NOT A STRANGER IN OUR PREMISES.

HE IS THE MOST ADMIRABLE AND RESPECTABLE PERSON IN OUR HE IS THE MOST ADMIRABLE AND RESPECTABLE PERSON IN OUR

OFFICE. OFFICE.

HIS DESIGNATION IS FAR BEYOND THE DESIGNATION OF HIS DESIGNATION IS FAR BEYOND THE DESIGNATION OF

MANAGING DIRECTOR / CHAIRMAN OF THE COMPANY. MANAGING DIRECTOR / CHAIRMAN OF THE COMPANY.

HE CAN FIRE ANYONE IN THE ORGANIZATION BY JUST SWITCHING HE CAN FIRE ANYONE IN THE ORGANIZATION BY JUST SWITCHING

HIS PREFERENCE TO OTHER COMPANY.HIS PREFERENCE TO OTHER COMPANY.

MAHATMA GANDHIMAHATMA GANDHI

Paradox of Financial Paradox of Financial PlanningPlanning

Present Situation

Required Situation.

Change in your Approach, Change in your Approach, from from

Product FirstProduct First to to Strategy Strategy FirstFirst can be termed as can be termed as “COMPLETE FINANCIAL “COMPLETE FINANCIAL

PLANNING”PLANNING”

WHAT IS FINANCIAL PLANNINGWHAT IS FINANCIAL PLANNING

A process of meeting your life goals A process of meeting your life goals

through the proper management of through the proper management of

your financesyour finances

It’s a Six Step scientific processIt’s a Six Step scientific process

WE NEED TO CHANGE THE WAY WE LOOK WE NEED TO CHANGE THE WAY WE LOOK AT FINANCIAL SERVICES / PRODUCTSAT FINANCIAL SERVICES / PRODUCTS

CAR CAR Are we buying Engine / Lubricants / Are we buying Engine / Lubricants /

Piston / Cylinder? ORPiston / Cylinder? OR We are buying Comfort, We are buying Comfort,

Status, A Reason to Enjoy Long Status, A Reason to Enjoy Long trip with spouse and children, trip with spouse and children, A Vehicle for Conveyance?A Vehicle for Conveyance?

HOMEHOME Are we buying Bricks, Stones, Are we buying Bricks, Stones,

Mortar, Hardware? ORMortar, Hardware? OR We are buying Mental We are buying Mental

Peace, A place where you Peace, A place where you can sleep better at can sleep better at NIGHT, Shelter for your NIGHT, Shelter for your safety?safety?

APPARELAPPARELButtons, Textures, Buttons, Textures,

Cloths ORCloths OR

Smart LooksSmart Looks

CHILD PLANS (ULIP CHILD PLANS (ULIP / MF)/ MF) Are we buying Equity Based Are we buying Equity Based

Returns, Premium Payment Term, Returns, Premium Payment Term,

Withdrawals, Surrender, Withdrawals, Surrender, OROR Financial Security of ChildFinancial Security of Child A Complete Financial A Complete Financial

Planning for major events Planning for major events like Education, Marriage and like Education, Marriage and Start in Life ExpenseStart in Life Expense

NFO NFO Are we buying Equity Based Returns, NAV Are we buying Equity Based Returns, NAV

of Rs 10, No Front Loading Charges, Small of Rs 10, No Front Loading Charges, Small

Cap Fund, International Fund Cap Fund, International Fund OROR A FINANCIAL PROVISION / PLANNING A FINANCIAL PROVISION / PLANNING

FORFORRetirement Retirement Financial Security of SpouseFinancial Security of SpouseHaving an International VacationHaving an International VacationChild’s Future Needs.. etcChild’s Future Needs.. etc

A BUYING DECISION A BUYING DECISION IS ALWAYS IS ALWAYS

EMOTIONAL EMOTIONAL

Lets Focus on Life Goal Lets Focus on Life Goal FIRST…..FIRST…..

Child Education, Marriage and Start in Life Child Education, Marriage and Start in Life

ExpenseExpense

Buying a HomeBuying a Home

Having an Alternate Income SourceHaving an Alternate Income Source

Retirement PlanningRetirement Planning

Going on VacationGoing on Vacation

Taking Care of Dependent Parents etc..Taking Care of Dependent Parents etc..

Then Discuss PortfolioThen Discuss Portfolio ParametersParameters

Risk AppetiteRisk Appetite Current Stage of LifeCurrent Stage of Life Financial ConditionFinancial Condition Sensitivity of the GOAL.Sensitivity of the GOAL.

OutcomeOutcome Equity – DebtEquity – Debt Short Term – Long TermShort Term – Long Term Aggressive or DefensiveAggressive or Defensive

Then Discuss PRODUCTSThen Discuss PRODUCTS

Mutual FundMutual FundGOLDGOLDPMSPMSDirect EquityDirect Equity Insurance Insurance PPF / RBI BondsPPF / RBI BondsSenior Citizen Savings SchemeSenior Citizen Savings SchemeLIC etc….LIC etc….

FINANCIAL PLANNING PROCESSFINANCIAL PLANNING PROCESS

Gathering Relevant InformationGathering Relevant Information

Setting Life GoalsSetting Life Goals

Examining Current Financial Status and Setting Examining Current Financial Status and Setting

up Budgetup Budget

Formulating Financial PlanFormulating Financial Plan

Implementing Financial PlanImplementing Financial Plan

Reviewing and Monitoring Financial PlanReviewing and Monitoring Financial Plan

WHAT ABOUT PRODUCTS??WHAT ABOUT PRODUCTS??

A RANGE OF PRODUCTS ARE REQUIRED A RANGE OF PRODUCTS ARE REQUIRED LIKE..LIKE.. INSURANCEINSURANCE MUTUAL FUNDSMUTUAL FUNDS PMSPMS EQUITYEQUITY DEBT SOLUTIONSDEBT SOLUTIONS GOLDGOLD REAL ESTATEREAL ESTATE INTERNATIONAL EQUITY / DEBT EXPOSURE ETC…INTERNATIONAL EQUITY / DEBT EXPOSURE ETC…

BenefitsBenefits

Client will be fully aware about the solution provided. Client will be fully aware about the solution provided.

Customer Delight – No Crisis Management Reqd.Customer Delight – No Crisis Management Reqd.

Increase in Referral SaleIncrease in Referral Sale

Satisfied Employee, Lower Attrition, Better ProductivitySatisfied Employee, Lower Attrition, Better Productivity

Increase in Overall Revenue and Profitability.Increase in Overall Revenue and Profitability.

A burning desire is the A burning desire is the starting point of all starting point of all accomplishment..accomplishment..

ThanksThanks

Kaushal MandaliaKaushal Mandalia

kaushal@thefinancialplanners.inkaushal@thefinancialplanners.inwww.linkedin.com/in/kaushalmandaliawww.linkedin.com/in/kaushalmandalia