On the same page?

Argument is valueable. But only when it leads to a logical solution. The question is, are we logical? Mostly yes; at least that’s what we would like to believe. But do we act logical when needed? Not often.

Every advisor and his client have difference in opinion, which is very healthy. It helps to clear doubts, fetch answers, and helps both the parties understand each other’s process of work better.

But what happens if it arises from a situation uncalled for? It kills time, leaves both with a bad taste and does not lead to any constructive conclusion, just like the story of the six blind men.

Finding the elephant in the room

Six blind men wanted to figure out what an elephant is by touching it:

When the first man touched the leg, he said, “Hey, the elephant is a pillar.”

The second man said, “No, it’s like a rope,” when he touched the tail.
The third said, “But it’s like a thick branch of a tree,” as he had touched the animal’s trunk.
The fourth man said, “It’s like a big Japanese fan,” after touching the ear.
The fifth man said, “No, it’s a huge wall,” as he touched the belly of the elephant.
The sixth man said, “It’s a solid pipe,” based on the elephant’s tusk.

The men began to argue among themselves and each one insisted that he was right.

We, while advising/ catering to a client’s need, at times do the same. To make it even easier to understand, let’s take a look at Eric Berne’s model of Transactional Analysis.

Each one of us, while interacting with another individual, behaves like any of the three: Parent, Adult or Child at a time. These are ego states that we have and one is always more dominating.

This is how the states work:

  • Parent (let’s refer to it as P) is controlling.
  • Adult (A) is logical.
  • Child (C) is spontaneous.

For a sustainable long fruitful relationship between the advisor and the advised, it is essential for both to be on the same page. And that page has to be an A-A argument. Let’s take cases specific to our line of work.

Situation A: Guiding a conversation from Parent to Adult:

Client (P): My first priority is safety. So, I park only in FDs.

Advisor (A): Perfect, Sir. The way to keep your wealth safe also means to keep it beyond the reach of inflation, and if possible, by a sound buffer. Here is how the situation looks:

So, how about start allocating in debt funds and see how we can beat inflation better?

Client (A): What about the volatility?

Now that they are on the same page, the next pages can be written better!

Situation B: Child to Adult:

Client: (C): The markets are correcting, I want to take my money out of equity!

Advisor: (A): Sir, I understand the concern. But let me also tell you that we create the alpha over fixed income asserts because of volatility. Take it this way, in the past 26 years, somewhere in between Jan-Dec, the market has corrected EVERY YEAR. And 13 times to more than 20%!

So please do not worry. For instance, let’s look at a fund which has seen a number of cycles. DSP BlackRock Equity Opportunities fund has, since inception and within an 18-year timeframe, generated 19% CAGR return for its clients. Has the return been linear 19%? No. The past 9 calendar year analysis will give you the ideal picture. Not once, did it clock even 20% +- to 19% in a year!

Thus, we and the other person across the table are not always on the same page. And it’s not always a question of right or wrong, but simply a difference of how we are looking at things.

A conscious effort can help both sail through to a desired destination.

P.S.: Due to space constraints and to put the model in the direct context of our everyday crisis, the model of Transactional Analysis had to be simplified (read possibly diluted). Have five more minutes? Here is where to start:


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