I know this headline might seem odd, but I couldn’t think of a better one for today’s post. By the way, this post is not about a gun fight nor is it about a physical fight either. So, what is it about? Well, you are about to find that out (or at least get a generous dose of clues) with a few questions.

Who was your competition in the early 2000’s?

Think about it for a moment.

Was it Banks?

What about Stock Broking Firms? Other distributors? If pressed further, you might say insurance agents, real estate agents. If you think some more, you might say gold, fixed income, ignorance about mutual funds and so on.

What about the 1990s?

High Interest Rates on Fixed Deposits, Post Office Investments, Stocks (and Stock broking firms), LIC and Banks.

The point I am hoping to make is that competition was different. The regulations were different. The business models were different. It was a very different time in this business. To get started in this business was different. Running a business was different.

Many people entered this profession by accident or by lack of choice or for the money. Few entered because this was an established industry or a profession.

Things kept changing over time and so did business models and competition. And while these changes might seem incremental, they were nothing but exponential.

For example, previously there was intense competition for affluent clients only. Today there is competition for everyone, even for the Rs.500 SIP. Additionally, most competition was restricted by geography. In short, competition was local. Most people built their business with local clients staying within a 10 km radius. Today firms are traveling everywhere to get the clients they want. They are also acquiring clients online from all corners of India and other countries. Introduction of the Direct Model too brought in very different sets of competitors and business models. In fact, DIYA (Do It Yourself Assisted) has become a new category in itself. As we all know, Change is the only Constant. Things will keep changing. New Competition will continue to emerge.

But what about competition today?

The New Age Competition…

They do some crazy stuff such as using mutual funds as loss leaders. In fact, a Venture Capitalist on a call in 2021 said, “We are not competing with distributors.” Within 2 seconds of that statement, he slyly or foolishly said “We are only using mutual funds as loss leaders.” Since I had written about this earlier, I won’t get into the details here.

The point is competition is intense. Many of these competitors simply want to win at all costs. They are armed with capital, technology, people and so on.

The mutual fund industry is now a real industry with real long-term potential. Therefore, the competition will get even more intense. It’s like a gun fight for clients. It’s a gun fight in this business.

And you must enter this gun fight to protect your clients, to protect your business, to protect this industry.

Even the banks have realized this…

Veteran Banker K. V. Kamath recently said, “If I would have been in a bank today where there is no change and innovation, it would have been a nerve wracking experience for me. Banks must continuously learn about the latest developments in the sector. Banks have no option but to collaborate and partner with fintech companies.” Axis Bank’s CEO and MD, Amitabh Chaudhry said, “Collaboration is the model fintech and banks need to work on.”

The key words here are collaborate and partner.

But we all have blind spots. Few people would dispute that. Although paradoxically, many people confuse being aware that they have blind spots with being able to see them.

I have news for you, by definition, you can’t. That’s what it means. A blind spot is something you don’t even know you don’t know. As financial professionals, we see blind spots of our clients, but do we really see ours?

I don’t think so…I can’t see mine and I bet you can’t see yours.

Many of us enter this gun fight with a knife.

What do you think is likely to happen here?

Can you ever win a gunfight with a knife?

The only person I have seen winning is Anil Kapoor from Mr. India (and action heroes in our movies). But in the real world, we all know how this plays out. Even two people with knives or five will not win these gun fights. This is the case where 2 or more people join hands and think they have addressed the problems of competition, succession, and growth. The best is when a senior player with a knife hands the knife over to the next generation or to another person.

Remember this is a gun fight against capital, technology, and scale. You won’t simply win it simply by collecting more knives.

You need something more sophisticated, like Banks, you too need to think about collaborating and partnering. But such lessons are always learned the hard way. This post might not make that much of a difference although I truly want it too.

Someone asked me this question the other day: ‘Will Tech replace me?’

‘Absolutely Not!’, I responded instantly.

‘Not Even Tech + Humans’. “But you haven’t asked me the right question yet., What will?”, I added further.

As he seemed a bit confused, I told him, “The Right Humans + The Right Tech however will do that job.”

Therefore, don’t let your current success blindside you…

If you want to be incrementally better: Be Competitive. If you want to be exponentially better: Be collaborative. – Unknown