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3 potential solutions to Mr. A K Narayan’s challenge
A few months ago, we carried a very insightful interview with Mr. A K Narayan, President, IFA Galaxy, in our Equity Insights microsite, where he explained some of the challenges in practically implementing asset allocation decisions. MasterMind took up this challenge of trying to understand why investors tend to behave the way Mr. Narayan articulated so well, and then consider solutions to the challenge that he articulated.

How will you tell your client that he is being foolish?
When you see your client recklessly committing big money into risky punts after a couple of bets paid off very well, how will you tell him that he is being foolish - in a manner that will get the point across without bruising his ego?

Does “main hoon na” always work with your clients?
Given two scenarios – one where a person bets/invests money on the basis of pure chance, and the other where he bets/invests on the basis of someone’s recommendation, does the investor hesitate with one bet more than the other?

New insurance product: emotional insurance
Behavioural finance is now being productized – products and solutions are being created that help professional money managers as well as individual investors to steer clear of emotional impulses that often lead to inefficient investment decisions.

Best PAD : the new mantra for asset allocation
Your financial plan suggests an ideal asset allocation to achieve your client’s goals, while his risk profile throws up an asset allocation that is way too conservative to enable achievement of his goals. What do you do now? Go by the risk profile and jettison the plan? Or hard sell your plan and get your client to change his risk profile?

Use intelligent “newsjacking” to strengthen client communication
A challenge that many advisors face is how to reiterate the same simple messages to their clients, without sounding boring. You know you need to keep reminding them about why your simple strategies are the most effective, but you don’t always know how to say it differently each time. If this is a challenge you are currently facing, consider “newsjacking” as a strategy to strengthen your client communications.

Five hot buttons that make clients buy
Selling is actually the art of getting clients to buy. To do this, you need to understand how your clients make their buying decisions. Here are five hot buttons that make clients buy.

Have your clients fallen prey to hot hand fallacy in this bull market?
In this bull market, many of your clients would have made quick money investing in stocks and now perhaps believe they are ace stock pickers. This confidence gives them the courage to go into hot concept stocks, often ignoring your words of wisdom. What can you advise them to do, which you think they will listen to rather than ignore?

The story of Alka’s signature
This is a fictional story of Alka’s first signature and the incredible power that an innocent scrawl of a 7 year has in making financial plans successful over 10-15 years and in building the business of financial advisors who recognize its power.

Clients obsessed with past performance? Read this.
In this article, we explore the powerful behaviour concept called “Outcome bias”, how it makes investors sometimes take incorrect financial decisions like being obsessed solely with recent performance in making fund selection decisions, and what you can do to help them avoid outcome bias and take well informed investment decisions.

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