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From left to right : Navneet Munot, CIO, SBI Funds Management, Ritesh Kale, Nagpur, Dinesh Khara, MD&CEO, SBI Funds Management, D P Singh, ED&CMO, SBI Funds Management and Vijay Venkatram, Wealth Forum
If you believe in yourself, why work for someone else?
I worked for 2 of the biggest brands in the financial services business : HDFC and Reliance. At HDFC Standard Life Insurance, I was responsible for driving the bancassurance channel in Nagpur and at Reliance MF, during my 6 year stint there, I was responsible for the corporate and institutional segment. My years at these two big organizations gave me rich learnings, but also made me realize that if I really wanted to grow to what I believed is my full potential, I should back myself completely and set up my own practice. If you have confidence in yourself, why work for somebody else? I therefore set up my own firm on 12th August, 2012.
Without Saraswati, you cannot get Lakshmi
There's one thing that I understood in my years of interacting with investors and also seeing interactions between investors and their advisors - whether bank RMs or distributors : knowledge is the biggest differentiator in this business. Without Saraswati, you cannot get Lakshmi - this was very clear to me. This is the motto that I adopted from day 1 in my own firm.
First time corporate investors were my first clients
My stint at Reliance MF gave me a good exposure to the corporate and institutional segment. But, when I started my firm, I didn't start off chasing large deals. I instead spread the word among my entire friends network that I have started an advisory business and sought referrals of companies that were not investing in mutual funds. My first set of clients were all new to mutual funds - they were part of the majority who associate mutual funds with equity. I made presentations to them about liquid and debt funds, explained the benefits of liquid funds for corporate treasuries and then told them simply to try liquid funds for even 1 day or 1 week and check out for themselves. This sounded reasonable to them and they started off with just a 1 day or 1 week trial of liquid funds. When they saw everything working smoothly, their confidence grew and they were willing to understand more about mutual funds. Slowly, I helped them build their confidence in liquid and debt funds for corporate surpluses, and built my initial AuM on the back of getting new corporate investors into mutual funds. It was only by educating them that I won business for myself.
When dealing with corporate CFOs and promoters, while you may get them into only liquid funds and other short term avenues, the breadth of knowledge that you demonstrate on domestic and global markets, is often a key determinant on whether they will retain you as their advisor.
HNI clients value knowledge
After getting a toe hold into the corporate segment, I turned my attention to the HNI segment. This is a segment I was quite familiar with, thanks to my bancassurance experience. Here again, my approach of Saraswati first, before seeking Lakshmi, helped me win clients. Many investors who were served by bank RMs were not being properly guided on their investments, for various reasons - either the inexperience of the RM or conflicting objectives. My effort was to first help them understand the importance of proper asset allocation and financial planning, get them comfortable and only then go ahead with investments. Although I focus only on mutual funds, I also guide them on direct equity, I suggest appropriate insurance plans - even though I don't earn anything from this.
HNI clients are well read, they appreciate and value an advisor who is knowledgeable about markets and products. They expect their advisor to be well informed on key global trends - like for example what is leading to the big fall in oil prices, etc. Demonstrating your grasp on market drivers is often a big plus point, at least in the HNI segment. Saraswati is clearly important in this segment, if you want Lakshmi.
Structured approach gets me referrals
When I acquire a new client, in the first week, he will get a welcome letter from us, in the second week he will get his login ID and password that will enable him to track his portfolio online on our website and then every fortnight, he will get an auto-generated portfolio statement by email. Our engagement begins from day 1 and is fully structured. I also make it a point to ask every client of mine 2 references. I have not found clients not wanting to give us references, especially when they see that they are being served well.
My biggest win : an affirmation of my motto
My biggest win happened in the first few months of 2014. This was an HNI who was referred to me by an existing client. He is an industrialist. Before meeting him, I did research on him to understand all I could about his business and about him. That helped get the meeting onto a good start. During the meeting, I gathered that he had invested significantly in bank FDs and in property. He was not very confident about returns from property going forward and bank FDs were anyway not meant for higher returns. He had never invested in equity funds. I spent a lot of time taking him through equity markets, what drives markets, where we stood in the beginning of 2014 on all the key market drivers and why I was very confident of markets delivering healthy returns over the next 5 years. I kept most of the discussion on a forward looking mode about prospects for equity markets. When I saw the client aligned on market prospects, I then proceeded to showcase good equity funds with healthy track records. I stressed on the need to take at least a 3-5 year horizon when considering equity funds and also got him to go to my website and take the risk profiling exercise, which demonstrated good risk taking ability and appetite. He was happy with the approach and gave me Rs. 6 crores in 3 instalments of 2 crores each to invest in equity funds. The best part is his was a new KYC - he had never invested in mutual funds before. Since I was very confident about market prospects, we invested in early 2014 - before the election results. The client is already sitting on 50% plus returns on this portfolio. If I look back at what helped me get this account, it was again a case of Saraswati first, then Lakshmi.
Plan for 2015
My plans for 2015 are straight-forward. I am today among the top 5-6 IFAs in Nagpur. By end of 2015, I would like to be in the top 3. I would like to enhance my SIP book from 350 live SIPs to 500 live SIPs by the end of 2015. I believe that if I remain focused on knowledge, I should be able to meet my aspirations.
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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