On Motivation, IFAs and Much More: A Chat with Brijesh Dalmia

It is slowly becoming tradition to conduct a thorough Google search to know about someone. When I was told to interview Brijesh Dalmia, I naturally resorted to the same. A quick search made it evident that he is a man who wears many hats. An independent financial advisor, a trainer of IFAs, motivational speaker and writer; by virtue of these he has become one of the veteran members of this ever expanding financial industry.

His latest book ‘Mutual Handbook for IFAs’ throws light upon the rising trend of Independent Financial Advisors who enter the industry and some silently leave. This book aims at handholding the IFAs who are entering the industry or are struggling to make it big. A quick glance across the book will tell you that every aspect of the advisory is covered starting from the motivational factors which allows an IFA to stay on, the ways to build a client base, addressing the fear of ‘direct’, commissions and so on. All of this has been supplemented with data and numbers as and when required. An in depth reading will make you thankful that you read the book because it may have been the boost you have been waiting for.

I came across his blog where he stresses upon the importance of being on time, sometimes even when he knows that person concerned might be late. This is such a rare trait that is it almost novel. Hence, I timed the call ensuring I was right at time because he is not the one to be trifled with. This led to an exchange of questions and answers and his views about the Mutual Fund industry, the current trends, the probable future and the many hats he wears. But where did it all start?

Brijesh shed light upon his professional past and the journey that started in Patna. Pre 2000 he was a financial advisor in Patna and moved to Kolkata to expand his own business. He is the founder of his own wealth Management Company called ‘Dalmia Advisory Services Pvt. Ltd.’ A CFPCM, LUTCF and LMF, Brijesh has authored seven books and has reached out to more than 1,00,000 people and advisors. You can read this thoughts and ideas on life, motivation and the financial industry on his blog. His latest venture is 'The Brijesh Dalmia Leadership Company' where several programs of leadership, team building and personal development are conducted.

We all have seen several IFAs climb the ladder of success and some scrape the bottom rung. Why are there such distinctions? Brijesh responded to this as lack of motivation and the desire of quick results. If IFAs are expecting quick results in a day or a month, that is not going to happen. Building a sustainable business takes time. He stressed upon the need to be personally motivated to succeed. A lot of IFAs are motivated by fear and that is making them leave the industry. At this point I wondered aloud if the lack of personal motivation is due to the reduction in commissions. He stated that if IFAs are determined to stay on in this business and maintain a steady client base then brokerage will build over time. Even in scenarios where rates may be reduced a stable base will help overcome the problem.

There is an influx of Asset Management Companies in India. They are expanding rapidly. In light of such rapid expansion, do the IFAs manage to keep pace? Brijesh stated that IFAs need not focus on expansion but on the client base. It is only by building a clientele can IFAs stay in business.

The fear of ‘Direct’ is getting increasingly deep rooted. Adding to which, the middle class strata is willing to invest but reluctant to pay for services. How can one possibly address both the concerns? Brijesh is confident; he says that there will always be people who will need financial advisors to provide services. Not everyone is comfortable in going ‘direct’. Similarly there will also be people willing to pay a fee. A lot of people are hesitant because the fee is optional. Advisors can churn income through brokerages and that still remains the primary source of income. Hence, as of now fees remains an optional source of income.

Now is the time to address the elephant in the room. Through the snippets of conversation it is made clear that to survive you need clients. However, how do you go from having zero clients to a hundred and still counting? In his book “Mutual Fund Handbook for IFAs” he addresses the difference between customers and clients. Customers are those who give irregular business in a year. Clients are those who give regular business. On the telephonic chat he mentioned that networking with people will help build the client base. There is a natural market consisting of friends and relatives, conducting various investment awareness programs and building a network based on network references.

I have often heard rumours that when markets fall investors hurriedly redeem all their investments. I asked Brijesh the same to check the extent of myth and reality in this statement. He responded quickly and rather sharply rubbishing the claim. He states that, he has never come across any data which can conclusively prove that when markets fall most investors redeem their investments. There may be some who do this. Most who exit are new investors, not old. It is because few investors redeem, our perception is that many redeem. It is because new money doesn't come during bad markets, we feel that clients are redeeming. A part of this is true but it is not worth the talk. On the other hand he has witnessed investors who want stay invested despite falling markets.

In his latest book he makes an interesting point that in the United States Mutual Funds have taken over the FDs. However, this is far from the scenario in India. We asked for Brijesh’s opinion on the same. This is because there is a lack of awareness. Investors are yet to discover the power of Mutual Funds. However, the trend in India is changing and in the next decade or two we can expect a rise in Mutual Fund investments. USA has already known it and slowly it is spreading in India too.

It could be a stumbling block for a lot of IFAs to finalize on the AMCs they wish to deal with and the products to sell. With so many different kinds of products all promising excellent performance and returns, objective analysis becomes very difficult. Brijesh is of the opinion that prospective AMCs must be considered on the basis on brand value. A nationally established brand which is favored and liked by the public is preferable. The Assets Under Management (AUM) also plays an important role. A large size of assets is indicative of stability and performance of the company. The overall performance of the funds over the years as compared to the benchmark and peer group over the years. 80% of the schemes selected should be selected among top AMCs by brand, size and consistent performance. Remaining schemes can be picked on the instincts of the IFAs.

Brijesh’s latest book spoke about a 10/10 rule. I found it to be holistic approach towards leading a professional life. On being asked to elaborate, he lucidly explained, the first ten signifies that IFAs should have 10 meetings in a week i.e 2 meetings in five days, 40 meetings in a month and 500 meetings in a year. This will ensure that IFAs whole heartedly dedicate their client’s time and maintain the personal touch. The other ten indicates that IFAs should spend at least ten hours dedicated to reading and learning. This will ensure that they are in touch with the latest trends of the market and read for self development as well.

Our chat extended for a good 21 minutes, in which I was convinced that Brijesh was not only dedicated to the financial industry but an individual who strives to keep getting better. When asked about his future he said he sees himself writing a lot of books, reading a lot and continuing with personal development sessions. We can be sure that Brijesh Dalmia is here to stay in the industry and we can look forward to sharing his knowledge through the books and blogs he promises to write.

You can know more about Brijesh Dalmia and read his blog. You can get yourself a copy of this book here and here. Also, follow him on Twitter and Facebook.