In an interview with Yogita Khatri of myiris.com, Harbinder Singh Mehra, Founder, PensionIndia says, ``Most of the money in the capital market today is of FII and hence the market is inherently volatile and it will take many years before we have our own money to support the market.``
> Can you please tell us about ` PensionIndia`? What services do you offer? How did you step up in financial advisory business?
PensionIndia is a premier pension & personal finance web portal cum retirement solutions providers to clients as well as advisors. We offer a wide range of services to manage pension funds to the end user and also provide an array of solutions to advisors community to set up & scale their financial planning practice. Pension India is promoted by seasoned professionals who have been in financial advisory business for the past 18 years.
> Are clients clear in their goals? What steps do you take to bring clarity to their goals?
Most of the clients are not clear about their goals and one has to sit with clients to clear the air about the real and superficial goals. We do a risk analysis of the clients and then classify the goals into life events and life real goals. The life events goals will be something like buying a car, foreign trip etc and the life real goals will be retirement, planning for children education, setting up business etc. Once we have done that we then suggest the right asset allocation to reach those goals.
> Government mulls strict norms for wealth management advisors followed by the recent fraud case in a bank`s wealth management unit. Do you think stricter norms will help? How do you see the business environment for advisors in 2011?
To us financial markets are like a wild and powerful animal which needs to be controlled appropriately. The free market theory and that theory that market takes care of itself has just got busted in US and other developed nations which were the proponent of such theory. We at Pensioindia.com see that the advisory business will increasingly move from product push to product advisory and increasingly clients will go to advisors and planners who have the necessary skills and knowledge along with proper ethics & disclosure norms to provide risk adjusted returns.
> What are the emerging trends in wealth management in India?
Market will move to more complex products where they will need more knowledgeable and experienced advisors with proper disclosure and ethical policies.
> People are worried about a stumbling India growth story, about high inflation, high deficits, FII outflows etc. What is your market outlook for 2011?
At Pension India we believe that most of the money in the capital market today is of FII and hence the market is inherently volatile and it will take many years before we have our own money to support the market. India will remain a high beta market for quite some years now and the outlook for 2011 is shaky keeping in view that so much of money has been pumped in India and abroad by governments leveraging their future that it makes the whole eco-system shaky for many years to come. This is not that people will not make money but only those will make money that understand the risks of the market and are able to wriggle out a risk-adjusted return from the turmoil that we are in post financial crises.
> How many life insurance companies do you deal with? How much is the whole insurance business in your total?
We are a fee based financial advisory and we do not receive commissions form product sellers and hence we are not aligned to any company. We let the client choose company of his or her own choice and often suggest 2 or 4 options to our clients.
> What are the aspects that matter you when selecting funds for your clients? Your top 3 equity fund picks and debt fund picks with key attributes you like in them?
The track record of the fund and the R Square and beta of the fund are some of the important consideration while choosing funds. We do not recommend generalized funds or top funds etc; we advise keeping in view clients profile. Hence, as a policy we refrain from declaring about the quality of one fund.
> How many fund houses do you deal with? In which fund house do you have the maximum AUM (in terms of percentage)? Tell us your favorite all-time MF schemes and fund managers.
The reason for the current financial meltdown is that people rate fund houses, banks and stocks and see what happens? Those companies which were rated highest on Wall Street fell on their face. Many people lost their entire pension funds. Many hedge funds got bankrupt. Many insurance companies and mutual funds were bailed out by government by leverage future. We are against declaring any fund house or scheme our favorite, as in today`s world nothing is too big to fail.
> What`s the one thing that you would change in the financial services industry, if you had the power to make that happen?
I would first of all de-link the performance of a sales/marketing/relationship manger from incentives and salary. I would change the compensation method (from CEO to sales executive) of all big corporate houses which is the root cause of defrauding innocent people or playing with clients` greed and fear to make money for themselves not the innocent client.
> Going ahead, what are your plans? How do you plan to expand your business?
Going forward we will be conducting `financial planning clinics` in major towns for educating and spreading the financial planning concept among consumers and for the advisors we have a target of planning 100 `financial planning cafe meets` across India where a battery of dedicated financial planning community will be developed which will have the highest ethical standards, cutting edge knowledge and processes with compliance to complete disclosures norms.
We plan to educate, support, mentor and bring up as many financial planners as we can so that the populace of this lovely country receives the best advisory services in the turbulent as well as opportunistic times in the unexpected world of financial markets.
We have already opened an office in Bangalore and by the year end we plan to open two more locations in west and south India.
> Is there anything else you would like to share with our readers?
I would like to share that if you are a client reading this then my advice to you is to never underestimate the advice of a good financial planner and invest your time in finding a good financial planner and stay put with him for longer period t0 give him chance to perform because you must understand that a financial planners is not one of your neighborhood broker who promises you 20%/30% in next 2/3 months, a genuine financial planner is someone who will give you a risk-adjusted return over 3/5 years. In life any reasonable person wants his or her goals to be reached and that is the job of a financial planner. The job of financial planners is not to make you king one day and make you a poor man another day. Hence, please give time to your financial planner to perform and pay him appropriately for his service.
For financial planners and advisors my advice will be that you are setting up or migrating to financial planning platform at the right time. Do not lose heart when a client thinks of you as just another agent or product pusher. Impress him with your knowledge, tell him things which he does not know, build respect around you and do not attend to clients who do not respect you, because one day they will and will definitely come back to you. Always keep yourself updated and act like a guide and philosopher to your client.
At PensionIndia.com we are always on the client and advisor side and have resolved to take India to the next level in financial advisory business.
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