Helping clients to weather financial crises and overcome challenges in wealth management in India

Trust drives wealth management and financial advisors are cognizant of this principle that drives the sector. Professionals in wealth management deal with a range of multi-faceted challenges that play a key role in influencing their broad strategies and decisions. Rahul Agarwal, a three-year MDRT member from Guwahati, India says, "The foundations of our sector are trust, action, and results. Wealth management is a domain where proactive client interactions are vital. It is important to understand that, like anyone else, financial advisors also have good and bad days with challenges and situations that one cannot even think of."  

For Rahul, one challenge came during the Covid-19 pandemic, when the markets dipped, and there was global panic. "I helped all clients and led them towards their financial goals. For example, one of my clients was saving for her daughter's education abroad. With the sudden downturn, she was worried about those investments. I reached out to her, spoke about the resilience of her investment strategy, and provided regular updates on market trends and portfolio performance." 

Transparent communication is crucial in such a situation. To mitigate losses and preserve client capital, one must focus on diversification, asset allocation rebalancing, and selective profit-taking. "I worked closely with each client to review their portfolio allocations, making necessary adjustments to minimize risk and maximize potential returns," he says. 

Agarwal is circumspect about the market's ups and downs and calls them part of its inherent character. In due course, he says, the market did recover.  

"Clients regained confidence in the resilience of their investment strategies and appreciated the proactive measures taken to safeguard their wealth during difficult times." 

This incident underscored the importance of communication, transparency, and strategic planning in effective wealth management. 

"This experience came with a big learning that communication with the client is of supreme importance. No matter where the market is, we need to stand by the client, with the client. We must be their go-to person; I worked with this client, kept her confidence in my investment strategy and strengthened our relationship." 

Garima Agarwal, a seven-year MDRT member from Agra, India, also agrees with this assessment. She says, "I had to handle multiple crises in the 2008 financial crisis, where many of my clients faced similar issues. No one knew where the light of the tunnel was. A couple nearing retirement worked closely with me and were concerned about the impact the recession could have on their retirement savings. The stock market had tanked at that point, which impacted their investment portfolio. They were worried about losing out on the planned retirement benefits."  

To fix this, Garima adopted a multi-faceted approach. It included a comprehensive review of client portfolios to assess their exposure to market risks and identify areas for strategic adjustment. To the clients, I recommended reallocating some investments from equities to stable assets such as bonds and cash to reduce downside risk. Transparent communication was vital, and I held regular meetings and offered updates." 

Garima believes in going the extra mile. As a financial advisor, "Outside discussions on their finances, I listened to their fears and offered personal advice. I helped alleviate some of their stress and fostered a sense of trust and confidence." 

Garima happily reports that the couple’s portfolio weathered the storm relatively well. The timely adjustments helped mitigate losses and preserve capital to a significant extent. Over time, as the economy stabilized and markets began to recover, their portfolio rebounded and regained confidence.  

Garima draws lessons from the crisis: "I learnt about proactive communication, empathy, and strategic planning in navigating turbulent market conditions. Ultimately, it's not just about managing assets; it's about guiding clients through life's financial challenges with compassion and expertise."  

She put it into practice and organized educational workshops for clients to help them understand the root causes of the financial crisis and position their portfolios for long-term success.  

By fostering trust and providing clear, actionable guidance, financial advisors and wealth managers can help clients achieve their financial goals despite market fluctuations. 

 

Contact: MDRTeditorial@teamlewis.com