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Practitioner Interview Series: Ep. 2 - Financial Advisory as a profession with Mr. Zohar Batterywala

Mar-28-2022


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Mr. Zohar Batterywala is a financial advisor, who has been serving his elite clientele for over a decade in their financial planning services and is widely regarded for generating wealth for his clients. He services a variety of clients ranging from NRIs to domestic investors. He is based in Vadodara, Gujarat.

In this interview with Mr. Batterywala, we trace his professional journey and the trends he has witnessed in the retail investing landscape over the last decade.

IndiaP2P: Tell us about how you came to become a financial advisor?

Zohar: I started my career journey in 2004 as an Insurance advisor. My frequent visit to Vadodara Stock Exchange (VSE) developed my interest in the stock market. By observing and speaking with people there, I began to understand the workings of the market and it was almost love at first sight. There is a certain special energy in this business which I felt, I also saw people making good money. Given all this, I joined a broking firm and began to manage a suite of activities ranging from key accounts to client networking. Subsequently, I became a dealer and began punching orders for investors thereafter becoming a relationship manager.  

In these years of work, I learned how the market operates, how to spot opportunities and risks, more importantly, I began to understand how to profile clients and build portfolios that suited them best.

 

IndiaP2P: So during this journey what were changes you witnessed in terms of rules and regulations, technologies, investor's behavioural change etc?

Zohar: Many changes - big and small. While regulation and technology have evolved along predictable lines; the behaviour of investors, perhaps not so much. The psychology of most investors has remained unchanged still. They are still chasing the unrealistic targets, "zero to hero” which turns them into “hero to zero" i.e. acting in extremes. I have seen new investors get carried away and undertake leverages trades simply because things appeared rosy - most of these traders lose money because people often discount thinking about the risks. On the other hand, you have people with investable funds who will not look beyond FDs because they don’t want to take any risk at all. There is no risk-free return. Investors need to think about both risks and return and not just one of them.

 

IndiaP2P: How would you say investment products have evolved over time keeping in mind the growing retail investor base?

Zohar: Overall, investing has become more accessible due to technology, and of course, the variety of products has also gone up which is good for retail investors. Personally, I encourage my clients to look at stocks plus fixed income instruments but then there are takers for longer investments and sometimes riskier ones like crypto as well.

My recommendation to clients is to first understand their savings patterns, create an investment pool and then depending upon their profile invest between 20 to 40% of their investable funds into higher-risk assets and the rest into lower-risk assets. 

And of course, my job is to maximise returns within a defined risk level.

IndiaP2P: How do you bucket investments into low and high risk?

Zohar: Essentially, my job is to understand every client’s risk level and maximise returns. This management of risk comes from

a) selecting the correct investment opportunities

b) creating smart, diversified portfolios, and

c) Monitoring and timely basis churning of the portfolio.

 

IndiaP2P: So what will be your general advice to the investors? How should one go about investing?

Zohar: My general advice to the investors is not to put all money in one place which surprisingly takes some education and convincing. I tell my clients, as per his or her earnings, age, expenses etc. she should not invest more than 25 to 30% in the stock market and the remaining in safer investment with highest possible returns. 

Diversify your investments across ETF, MFs, FDs, Peer to Peer Lending etc.

 

IndiaP2P: Is there something you wish retail investors understood better?

Zohar: One thing I fear is the fact that a lot of new investors - there are millions who have recently started investing, especially in the stock markets - are yet to see any downward cycle or crisis such as the one we saw in 2008. Markets went down from 23,000 levels to 8,000 levels.

New investors have not seen how entire portfolios and livelihoods were wiped out then and there is always a possibility of a similar crisis repeating. One needs to be prepared for such events, no matter how unlikely they may seem.

Retirement planning is another thing I feel Indians don’t focus enough on often leading us to be dependent on our children in old age. I have seen many people think that their savings pool will be enough without considering inflation and other economic trends. Investing right is a critical component of retirement planning.

 

IndiaP2P: What could be your advice for the individuals seeking a career in the financial advisory space?

Zohar: I think it’s important that you feel responsible for your client’s money and enjoy the process of investing. It’s also critical for financial planners and advisors to be updated with new investment options and changing regulations. I have seen many financial advisors who may have expertise or interest in one product such as the stock markets and end up allocating a larger than the ideal proposition of their client’s portfolio towards it, simply because they find it more comfortable. A good financial advisor must always be updated with all options and design investments from the point of view of the client and client only.

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