The Indian investment landscape is on the cusp of a major change, thanks to digital disruption and the efforts of the Indian Government to move into a cashless economy. In the past few years, investment habits among most clients have witnessed a sea change. As a financial advisor, you have realized that to grow your business and stay relevant, you need to be aware of these changing habits. Read on to know how investment habits of your clients are changing over time.
1. Exploring New Investment Avenues
For long, fixed deposits, gold, and real estate have been hot-favourites among Indian investors. Investment in these avenues formed a major part of one’s portfolio and were considered ‘the best’. However, over the years, retail Indian investors have shown a high affinity for going beyond traditional investment avenues. They are awakening to explore and embrace other financial instruments such as mutual funds to accumulate wealth for various life goals. This is evident from data available with the Association of Mutual Funds in India (AMFI).
As per AMFI’s data,the mutual fund industry has added about 9.58 lakh SIP accounts each month on an average during FY18-19. Data also shows SIP contribution in the industry raising from Rs. 43,921 crores in FY16-17 to Rs. 67,190 crores in FY17-18. Mutual funds’ ability to generate inflation-adjusted returns over the long term, coupled with the flexibility to choose funds as per one’s risk appetite and financial goals, have made them extremely popular.
2. Making Investment on the Go
Smartphones, tablets, and other digital gadgets have not only broken geographical barriers but have also made us digital natives. Be it shopping, going to the movies, or dining with friends and family, new-age Indian investors like to do everything on the go.
Today, investors are widely investing through various apps on their gadgets and are also seeking advice regarding their investments on social media platforms and messaging apps like WhatsApp. Hence, as an advisor, it is essential for you to remain connected with your clients on the popular social platforms and be ready to answer their queries and guide them in their investment decisions.
3. Getting More Involved in Investment Process
Gone are the days when investors blindly trusted instruments suggested by advisors, today they are getting more involved by opting for customised advice. Financial advisory does not follow a one-size-fits-all approach and, in the modern era, with ample availability of information, investors are actively participating in the decision-making process pertaining to any investment.
The preference is shifting towards advisors offering personalized solutions. Modern investors like to buy (and not be sold to). Hence, as an advisor, you need to know the pulse of your client and be ready to actively embrace their involvement in the investment process. Investment habits of your clients will evolve with time. It is up to you to keep a tap on these and use them to your advantage to stay on the top of your game.
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