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Consequit a Budapest Business Journal legfrissebb számában

Consequit’s quest for hidden demand
Figures and data may always be in limelight, but emotional intelligence is also a key factor in financial matters, advocates dr András Farkas, the commercial head of Consequit, a newly launched financial and insurance consulting company, started by former board and management members of Brokernet. After a most dynamic start, the new company is up to quick results despite the the less-­‐than-­‐optimal state of the market itself.
It’s been fifty days since you left Brokernet in a venture to found and build a new company. What are the features and services that will make Consequit unique on the market, and will ensure that you are not overshadowed by your older, „big brother”?
Similarly to our previous company, Consequit was also launched by Erika Kósa, who, I think, is one of the best network-­‐builders in the world, and definitely the best in Hungary. She, and her staff at Consequit, we believe in each other, and we are confident that our skills will complement each other better under the new circumstances. In our logo, the letters E and Q are highlighted, which refers to the importance of emotional intelligence in our consulting work. Being focused on people, and allowing more room for emotions in business decisions will give us a considerable advantage over our competitors.
Why do you think emotions play such an important part in financial decisions? If anything, this field should be directed by purely rational factors.
True, business decisions must be fully rational, but when it comes to savings and investments, we often find that rational arguments alone, are insufficient to shape one’s behaviour. Given that these decisions are about future events, we don’t always have satisfactory or reliable information on which we could base an entirely rational decision. Especially if the future in question is remote, like in the case of pension savings, or the likeliness of the events to happen is relatively low, like disasters or other unfavorable matters. People tend to exclude these thoughts from their mind, saying that „it will never happen to me,” or „it is still very far away,” in the case of pensions. Emotional arguments, on the other hand, can often offset this lack of information.
In general terms the financial market is not exactly in good shape. One would assume that launching a new company in this environment is pretty much against the odds.
Yes, the market is definitely very tough at the moment. We all know the difficulties on the financial market, and the insurance market, too, is dwindling rapidly. The market of life insurances is down by 10-­‐15% y/y since 2008, and the single premium insurances have dropped radically as well. Big insurance companies live on their existing clientele, and the number of new clients is decreasing by 10-­‐15% a year. But if you think about it, Budapest has some 700 restaurants, and still, new ones open every week. And you know, what? The good ones will always have room on the market, and will always survive. I’m positive that the same thing will apply to us. Although the insurance market is shrinking, it’s not only a threat, it’s also a great opportunity, as the population is hugely under-­‐ insured. The demand is vast, albeit currently latent. We will have to bring it to daylight, and our potential will become virtually infinite.
How do you exactly reveal a hidden demand?
When thinking about pensions, most people still think that their incomes will be somewhat lower, but their life will basically remain manageable. Which, if we consider the state-­‐run pay-­‐as-­‐you-­‐go pension system, is not the case. When we talk to someone in his thirties, paying the pension fees for a minimum wage amount (a rather widespread case), we can easily calculate that his or her pension in the state-­‐financed system will amount to around EUR 90 a month or so. This might be a shocking discovery and definitely not something that can be handled with a simple „whatever will be will be” mindset. Investments and savings have two basic factors: time and money, and, unsurprisingly, the more time you have, the less money you need. There is no such thing as too early, when you start to save for your pension.
We encounter similar surprises, when we begin to add up one’s expenses. We never ask how much someone earns, we always ask how much he spends. When we add everything that springs into mind, usually a shock follows. ’I don’t have that kind of money,’ they would say when we show them the bottom line. ’Well, you have just spent it,’ we have to reply. These surprises are not always pleasant, but they are very effective in changing one’s mindset on savings and investments. What more, if someone has no idea how much he spends on a monthly basis, it will be a lot easier to spend, say, 10% less than that, and open a savings account from the difference.
Is your portfolio focused solely on insurance and investments?
These are the two we are currently focusing on. Credit and real estate markets are so flat at the moment that we don’t want to put too much effort in entering them. Of course, we will keep an eye on both, and we have the potential to make the necessary steps, whenever things get better. But for now, these two pillars are more than enough to keep us busy.
With the shrinking of the welfare state, people are forced to take responsibility for their own security, be it in the field of health, education or pensions. We now have financial solutions for all these issues including life, pension and health insurances, term fix insurances or other forms of long term investments. And I have to highlight that these financial products are getting more and more secure, even compared to the constructions we had available three years ago. There are lots of safety nets around these products to ensure that nobody will lose too much, even if things go really wrong.
You are just starting out. What is the current state of the progress, and what are your short to mid-­‐ term goals?
Consequit was founded fifty days ago, and we have already contracted six major insurance companies and investment gold trader Solar Gold as strategic partners. We have 427 representatives, some 200 of whom are completely new recruits. We have a great know-­‐how, partly via Erika Kósa, partly by myself and other management team members, and we have already started to improve upon the methodology and the policies we used previously, focusing on the culture of the „gentle human touch”. Although it is an MLM scheme, it is far from the traditional „buy our product and forget us” method, that accounts for MLM’s dubious reputation. We have also introduced a cutting edge IT support system, that is completely unique on the Hungarian market. On top of the Hungarian company, Consequit also has the Slovakian unit, with another 350 people operating in Bratislava, Kosice and other major cities across the country. With that said, we aim to reach a
revenue of HUF 1,2 – 1,5 billion in 2013, and we definitely want to be in the top three companies in our sector by the next year.

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