Dev Ashish, SEBI Registered Investment Adviser & Founder, Stable Investor, talks about his decision to become an RIA and how writing articles on personal finances has helped him convert clients. Dev has authored more than 500 articles on his website StableInvestor.com.
What inspired you to take up a career in financial advisory?
I would say many factors led me to this path. Being from a family of lawyers and doctors, I always had a desire to work for myself. Though after engineering, I worked for a few years in the oil sector and then thereafter (and after MBA), I worked again for a bank. But during all those years, I constantly wanted to become a professional eventually.
Another factor was that I have always been an investor at heart and been investing in markets for 15+ years now. And with God’s blessings, the journey has been a profitable one. So over the years, I came to subscribe to the idea of becoming financially independent early in life (like in early 40s). And equity showed me the potential to do it. Having been investing for long, I could clearly see that it was indeed possible to attain the goal of becoming financially independent (even if one chose not to retire early).
So this idea of doing my own thing (by establishing myself in a profession) and my desire to help people see the life-changing potential of using money to take back control of their own lives and achieve their goals on their own terms, is what led me to start into the financial advisory space.
Why did you choose to become an RIA as opposed to becoming an MFD?
When I made up my mind to start my practice, I explored the possible options in the advisory space. And within no time it became clear that RIA (SEBI Registered Investment Advisor) was the way to go for me.
I could clearly see that being an RIA allowed me to be more comprehensive in my advisory’s approach. It allowed me to make deeper interventions in client’s personal financial lives. And this is what drives me more.
Having detailed discussions with clients, trying to understand their money priorities, trying to understand what they want their money to do for them, their financial goals, cashflows, risk appetite (tolerance as well as capacity) and how it aligns with what is right for their goals’ timeline linked allocation constraints), finding suitable investment vehicles, ensuring appropriateness of products and strategizing the approach to last detail.
All this could only be done if I had the full overview of their financial lives. And this is what being RIA allowed me. The level of knowledge, understanding and soft skills required are ofcourse higher. But I like it. And since every client is unique, it intellectually challenges me to devise a proper, unique strategy for each client. This level of involvement is something that I strive for.
All this was very different from being MFD who just focus on selling one product. The MFD approach is more transactional in nature with the aim of sales maximization. It never allows one to connect with the client’s lives in a manner that being in RIA does.
I am also a firm believer that as more and more Indians become aware of the necessity of getting conflict-free, fee-only, unbiased advice, the future will gradually move towards fee-only advisory. It is the way to go for investors.
Being an RIA, I can completely concentrate on my clients and what is right for them and not worry about just selling some commission-giving products. So I can run a 100% client-oriented and unbiased, ethical advisory practice.
If I am allowed to offer an analogy, then you can say that I didn’t want to open just a medicine shop and sell one type of medicine. I was more interested in being a specialist surgeon who after understanding the full health situation of the client, wanted to give advice and perform surgery, which was more actionable, goal-oriented and in many cases, life-altering.
What is your fee model?
I charge a fixed fee. The quantum of the fee depends on the complexity of client’s financial situations, portfolio, my assessment of the effort required and is not linked directly to the size of the client’s portfolio. I currently handle clients from both regular and HNI categories.
Being a SEBI RIA, I am only compensated by the fee my clients pay me. I do not get any commissions from any sources.
Have you faced challenges in collecting fee from retail clients, considering the fact that investors are still not accustomed to paying fee? How do you convince them, especially when portfolios don’t perform well during market volatility?
Luckily, I have never faced any problem in collecting fee from clients. My view on this is that most people, who understand the rationale for paying fee to get right + unbiased financial advice, do not need convincing.
Also, since most of my clients come after visiting my website www.StableInvestor.com, they already are aware that I provide fee-only advisory. So the expectations are already set and my website indirectly acts as a filter to send clients who are willing to pay the fee.
Of course, there are still people who don’t consider it worthwhile to pay a fee for financial advice. I am not talking about real DIY investors her but those who would benefit from proper advice but aren’t comfortable with the idea of paying for it. But sooner or later, such investors end up being shortchanged when they take so-called free advice from their bank relationship managers, insurance agents and commission-linked product sellers.
You have an archive of more than 500+ articles on your website. Most advisers find it difficult to dedicate time for writing. How can financial advisers acquire clients through blogs?
I have this habit of writing since I can remember. And I have been writing about investing and personal finance since much before I even became an RIA. So it does come naturally to me. In fact, since most of my clients come via my website, I can clearly say that writing is what has helped me build my practice over the years.
And I have this feeling that writing helps distill down the thoughts one has. So even in money matters, if you think about it, then you will realize that there are thousands of money related thoughts that float in our minds. And some are useful and others are just noise. When you begin to write, it’s a process of reviewing what you know, reading up more on shortlisted thoughts and then putting down your understanding in writing. All this upgrades your thought process as well.
And if readers like what you write, then it helps build a kind of bond that is based on trust. And that is most important in any profession that uses the online medium to attract clients.
What would be your advice to advisers who wish to write articles for their clients?
I am sure most advisers are experts in what they are selling (for RIAs like us, it’s about their action-oriented financial advice and for others like MFDs, agents, its products they are selling).
But people who read don’t want to see your expertise on a standalone basis. They want to get answers to their questions. They want to go from point A to B. So if your expertise or even your basic thoughts can solve the reader’s problems, then they will like to read what you write. It’s as simple as that.
So my suggestion is to always write by getting in the shoes of the reader. Write it from their perspective and not to show off your expertise.
People have questions that need to be answered. So as advisers, we can use our websites/blogs to provide them with those answers and build trust + connection with them. This benefits both sides in the long run.
What would be your advice to MFDs who want to become RIAs? Is it feasible to have both RIA and MFD practices simultaneously?
I would not want to comment on the feasibility of both RIA & MFD being practiced simultaneously as this is a matter that SEBI is looking into and trying to segregate. But keeping distribution separate from advisory is required to ensure that conflict of interest is tackled correctly.
But I would also like to say that India is a huge country and there aren’t enough good advisers. So tremendous scope exists for both RIA and distribution models to thrive. To be fair, both models reach out to different client segments. SEBI rightly seems to be working towards streamlining of regulations to ensure that, amongst various options, the investor at least gets the option for pure, fee-only advisory if he/she wants.
For those who wish to migrate from MFD to RIA setup, I think they are future-proofing themselves. Fee-Only RIA model is here to stay and will become more and more relevant in times to come. But to be fair, it’s not an easy model. There are no commissions and hence, its not just about trying to build the biggest AUM. The requirement for product expertise and knowledge is much more in RIA as clients expect that when they pay a fee upfront.
Do note that people are willing to pay a fee. But they are very intelligent and want to see the value in doing so. And like doctors and lawyers, even this profession takes years to build. So patience is required.