Sell Well - Grow Well, a joint initiative between SBI Fund Guru and Wealth Forum, is an effort aimed at encouraging and guiding distributors on a path towards right selling - which we firmly believe is the best way to grow well on a sustainable basis.

Vineet Nanda quit a corporate banking career with Citibank to set up SIFT Capital 6 years ago. He continues to be the sole advisor in the firm, though he relies heavily on technology to support his operations. His business growth has been nothing short of phenomenal in recent years: from 50 cr Aum in Mar 13 to 107 cr AuM in Mar 14 and now well over Rs.250 cr AuM in Mar 15. What makes Vineet a Fund Guru, what makes him so successful is that he has a very clear understanding of which client segment he is looking to serve, what is the key gap in the service they are currently receiving and on this basis, offering a value proposition that his clients are actually looking for but not getting. Read on to understand how Vineet clearly understands the one thing his clients don't have enough of - which draws them, and their friends to his firm - perhaps faster than he will be able to manage.

WF: What prompted you to give up your MNC bank job to venture into financial advisory on your own? You weren't in the wealth space at the bank - what prompted you to take this up after a stint in corporate banking?

Vineet Nanda : Honestly, I think it was partly on account of my own poor experience in dealing with bank RMs who would come to manage my account and my investments. Every six months there would be a new RM, and we get started over again, in discussing my requirements and so on. I also found many of them inexperienced, which meant that one couldn't rely on them for advice. It came to a point where I told them to simply execute what I needed.

A lot of my friends in my professional circle had similar experiences, and encouraged me to start out a financial advisory practice, which they could avail. I have always been good with numbers, I have a keen interest in the investments business. I did some ground work for a few months to assess the market opportunity for myself - met people from the wealth business, met AMC guys - and firmed up my plans to get started.

When I took the plunge, I also had a recruitment business that I set up and which gave me the initial income that allowed me to set up my financial advisory practice without cutting any corners. I set up my practice in 2008 - which was a time all the froth had evaporated from the market. The landscape was very quiet, client expectations were sober. Client experiences in the previous bull market and the bust that followed were also not good. So actually, while the macro environment was very challenging, it was actually a good time for me to start out.

We went head on into regulatory changes like abolishing of exit loads at the time I set up my practice - but since I didn't have a legacy business, there was really no impact on me. In hindsight, I think the benefit of having my recruitment business allowed me to build SIFT Capital on steady and solid foundations, working my way up one client at a time, and earning referrals from them to expand my business.

WF: Which customer segment did you choose and why did you make that choice, when you set up SIFT Capital?

Vineet Nanda: My initial set of clients were all working professionals - people in banks, financial services and other professions - which was really my professional contact base and my friends circle. So, that was a natural starting point for me. I realized quickly that the sweet spot for me was professionals with 50 lakhs to 5 crores of financial portfolios. They were not large enough to attract the private wealth guys, and were largely served by the mass-affluent units of banks - much like I was served when I worked for a bank. I knew the gap in the service proposition in this segment, and this segment was sizeable enough for me to look at building a scalable business model with. Between what a bank RM offered on the one hand and what a simple agent offers on the other hand, there was a gap - a space that was available to offer a truly professional service to this mass-affluent segment. That's what I chose to focus on.

WF: What was the core of the customer proposition that you offered, which attracted your clients to SIFT Capital?

Vineet Nanda: My clients expected a professional and trust-worthy service from their bank RMs, which they often did not get. I offered both - a professional orientation with my background and experience and trust-worthiness that comes from running your own set-up, where your growth is entirely linked with how you well you serve your clients. I offered accountability, which is what my clients were looking for. I can outlive any bank RM - and that's valuable to my clients.

WF: Your business momentum over the last 3 years has been breath-taking: from a 50 cr AuM in Mar 13 to Rs.107 cr AuM in Mar 14 and now well over Rs.250 crs in Mar 15. What did you do differently in the last couple of years to get your business onto this high gear?

Vineet Nanda: This approach takes some time to build business momentum, but after the initial phase where you establish relationships based on trust, referrals come in fast and thick, to help drive business momentum forward.

I believe the market opportunity is much bigger than what I have been able to harness for my firm. Good quality advice with a professional orientation is valued by clients. Advisors who are in this niche ought to be looking for much higher growth than what we have seen so far.

WF: Your client segment is among the best informed in the country. They are net savvy, they are aware of direct plans, they understand financial markets and mutual funds. What keeps them with SIFT Capital?

Vineet Nanda: My biggest friend is the corporate lifestyle which is today prevalent in the corporate world. People have money, but no time. Beyond managing their jobs and careers, whatever little time they get, they would much rather spend with their families, because they invariably spend less time with their families than they would want to.

Yes, they are well informed, they are all aware of direct plans, they are MBAs from reputed institutions, they are savvy. But, when they find someone with a similar professional wavelength, someone they can trust, who is willing to draw their attention to creating financial plans for them and willing to take the responsibility of executing these plans, that's a far bigger attraction for them than savings on direct plans. The value of someone taking charge of their personal finances is far more in their eyes than buying mutual funds a little cheaper.

That said, when we take this responsibility, we also need to ensure that we remain on top of our profession. What worked in 2008 need not work in 2015. We need to know what to change and adapt and what is best left unchanged. We need to understand trends and judiciously make course corrections in the plans, as is warranted. We need to engage continuously with fund managers, take in diverse views, form our own independent views, communicate clearly with our clients. When clients see proactive management, they rest assured that their money is in safe hands - and that matters a lot more to them than buying cheaper.

WF: Finally Vineet, what are business plans for the next five years for SIFT Capital?

Vineet Nanda: At an operational level, its about doing more of the same. From a vision perspective, what I'd really like for SIFT Capital is to evolve like some of the highly regarded law firms and CA firms in the country: centers of excellence with talented partners coming together to create an institution that caters to every need of the client. I would really like to see these kinds of organizations taking shape in the financial advisory space, and would want SIFT Capital to be one among such institutions.

All articles in the Sell Well - Grow Well section are created by Wealth Forum. These are not to be construed as opinions given by SBI Mutual Fund.

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