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I received a message today on whatsapp from one of my teammates, Sandip Mukherjee. The messages read…
What is 'vertebrate'?
Animals who have a backbone or spinal column, this includes mammals, birds, reptiles, amphibians, fishes and us.
What is common about all vertebrates?
All vertebrates possess red cells in their blood. Red blood cells contain large amount of hemoglobin which supplies oxygen to body cells. Hence, without the hemoglobin none of the vertebrates can survive.
But there is a fish, called Ice Fish, which can be found in South Atlantic Ocen, Their blood is white in color and they don't have any hemoglobin!! In South Atlantic Ocean, temperature is below -2 degree Celsius. At such a temperature blood becomes thick and cannot be pumped by lungs.
That is why over many years, through evolution, Ice Fish removed red blood cells from their blood. As presence of Oxygen is much more in cold water, Ice Fish absorbs Oxygen directly from environment through their very large gills. They also have evolved a scale-less skin for this.
Over many years, when temperature in South Atlantic Ocean Becomes freezing, many other fishes, big and small, all died and become extinct. But Ice Fishes Survived!
Why?
Because they have adapted to the changing conditions, while others have not. And that is why Charles Darwin said - "It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change".
The above message which I received is so true for IFAs as well. It is not the most knowledgeable of the IFAs that will survive, nor the most intelligent that will survive. It is the one that is most adaptable to change will survive. The IFAs who adapts to the changing conditions quickly, will not only survive, but they will thrive and prosper.
Today IFAs are also facing the kind of an environment where they will survive only if they have the capability to adapt to the change quickly. Like Ice Fish, IFAs don't have that long time to evolve, they need to adapt very fast.
Respond, don't react
I have said it in past and also saying it again, stop reacting and start responding. Most IFAs are very quick in terms of reacting to changing environment, rather than responding. We react by cursing the Regulator, AMCs, Competitors and even clients for not doing the right things. Do we have any control over any of these? The answer is Mostly, NO. Then why to waste time in cursing them and keep resenting, rather we should focus on preparing ourselves to cope up with the changes those are already in place and those which we are anticipating.
The IFA business is the fantastic business but there are lots of challenges involved. The environment to start and grow the business as an IFA is no more an easy job. It requires a lot of passion and conviction and most importantly the desire and readiness to adapt our business model to the constantly changing environment.
Changing Regulation, Usage of Technology, Robo Advisory and Direct Plans are the main factors which are contributing to the great amount of change which are ultimately creating a challenging environment for IFAs by either reducing the revenue or increasing the competition. In future I see these challenges increasing multifold. I don't see them disappearing or decreasing.
So those who are still busy and spending most of the time cursing these changes may not be able to survive being an IFA.
How to know whether are you the one who constantly reacts and complains or are you the one who responds to the challenge and focuses on adapting to change? Just observe your own thought while reading this article itself, not only this article but any other article talking about what YOU should do rather that what regulator, AMC or investor should do, what kind of feeling are you having? Is your mind telling you that all these stuff is fine but what about service tax Mr Jigar Parekh, do you think is it justified? There you go again, you surely are into reacting mode.
Does it mean that you should not do anything which you may find unjustified? No I don't even mean that. You must do your best to share your views with the regulator, AMCs and any other authority in picture and then focus on your business. Practically speaking we must share our feelings with the authorities or any other body involved, but we can't expect them to act in accordance with what we think is right, justified and proper. Do what you can do best to express yourself in best possible manner and then again focus on what you can change, that is your own self.
4 point plan to respond effectively to change
Few tips I would like to share which may help IFAs to adapt to change smoothly. Not necessarily all will be applicable to all, but based on your business model and your style of working, you may find some of them useful.
4 Things you can do that can help you to respond to change positively:
Have a Mentor: Find out some successful IFA in your city, district or state who has successfully responded to the challenges mentioned earlier and grown his/her business in spite of any challenges posed by outside factors. Meet and request him to be your mentor. Whenever there are some changes which are difficult to be absorbed, you can always rely on the guidance of your mentor who has successfully passed through such challenges. Someone has rightly said that 'why to reinvent the wheel?' When there is someone who has achieved what you wish for, it is always better to take his/her help rather than going for trial and error method. Steer clear of wrong people: T. Harv Eker has described it beautifully in his book 'The Secrets of the millionaire mind' that "If you want to fly with the eagles, stop swimming with the ducks." It means that stay away from the people who are ALWAYS busy cursing, complaining and resenting others rather than focusing on developing their own selves. Rather form a group of likeminded people who also are eager to be adaptable to change and committed to grow no matter what happens. In psychology it is termed as "Asch Paradigm", which means that being into the situation where your overall behavior is mainly guided by the behaviors of the other irrespective of whether it is rational or not.
So chose your company wisely, as it has lots of impact on your behavior and your adaptability to change.
Adapt to technological changes fast: We are living in a time where we are ordering the grocery online using a mobile app. The mindset and the behavior pattern of today's consumer and investor are far different than those of before a decade or so. You must catch this signal and make it possible for your client to transact online and move towards paperless work. Either MF utility or NSE is the currently available option to do so. But most IFAs are still busy finding out the problems and risk factors of using these platforms. There might be lot of scope for improvement with each platform, so what? Does it mean that you should wait for the final version to get ready with? There might be some risk factors associated with them, but so what? Even driving a car or walking on road also has risk factors associated with, do we stop walking or driving?
Don't wait for the perfection, start adapting. Even the operating system from Microsoft which is considered to be the best also has a scope of improvement and comes out with newer version regularly, the current version will be outdated in future. Does it mean that we should not use the computer currently and wait for the perfect and the final version of Microsoft operating system?
Online transactions are the future of the industry and that future is approaching faster than our imagination. Get started with something!!! The one who is shying from adapting the technology in day to day business is sure to exit forcefully form this business.
Keep Learning: Every living organism is constantly changing, either it is growing or dying. Similarly as an IFA either we are growing in terms of knowledge and skills or we are dying. Never ever commit a mistake of assuming that you know everything about the business, keep learning. "When a business ceases to be creative, when it believes it has reached perfection and needs to do nothing but produce-no improvement, no development-it is done. " Henry Ford. Keep attending various trainings which can sharpen your advisory and marketing skills on regular basis, and help you strengthen the way you acquire and retain clients. By training I don't mean the regular AMC meetings on market updates. When I say regular training I mean something which can help you improving your own communication skills, marketing skills, CRM skills etc.
The more you learn newer things, the better perspective you will have towards any changes that may require you to change your way of doing business.
Finally, be adaptable and respond early and fast to changes and use your own capabilities to adjust with the changing environment.
Remember, what you have, you either use it or lose it.
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