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Many advisors stay away from approaching
family members for business. But Sougata Mitra, an IFA from Kolkata, says that
friends, relatives and associates constitute a natural market.
 After
I quit my job in 2005, I wanted to start my own business. I evaluated several
options and settled on the financial advisory business.
My
brother was my first client. I offered him an ELSS. It’s always a difficult task to convince your
family members compared to other clients. I had to make my brother understand
the concept of mutual funds and the features of ELSS products. After a lot of
discussion over the dinner table, I managed to convince my brother. His first
investment was Rs 20,000. But after that it took almost a year for him to start
a Rs 500 SIP and increase his allocation to mutual funds. The bull run from
mid-2006 to early 2007 helped me to convince him, because almost all equity
funds fetched high returns during that period.
My
brother continues to invest through me. His invested corpus has consistently
increased over the years. Despite the periodic spells of volatility, he has
persisted with his SIPs and even made additional investments in his existing
folios. What is far more important is that he has gone out of his way to spread
the word among his friends and colleagues, who have subsequently become my
clients and have continued to recommend me to their own immediate circle,
leading to a steady stream of referrals.
Many
financial advisors believe that one should not get professionally involved with
immediate relatives, as the impact upon personal relationships could be
detrimental at times. However, I would beg to differ. Close friends, relatives
and associates constitute a natural market, wherein trust, the single most
important element which forms the very foundation of our business, already
pre-exists.
Given
this, it is only logical that one should leverage such relationships and
acquire a steady stream of referrals leading to further enhancement of client
base. Of course, this is easier said than done.The closeness of the
relationship would also demand that when it comes to service delivery, one has
to go that extra mile. But in the end, it is truly worth it. Especially for
newcomers starting their own business and hoping to introduce first-time
investors to the benefits of investing in mutual funds.
Lady luck played a big
role in landing my first client
Ramakant Mahawar worked
hard to get his first client but his first lucky break came when he could offer
his client exactly what he wanted – Kolkata to Delhi tickets!
 When I started my financial advisory business,
the fear of failure was always at the back of my mind. I knew that I had to
make a good start.
My first step was to collect the business
cards of everyone in my network of acquaintances and friends. Once my database
was ready, I sent a personal note to everyone saying that I had started a
financial advisory business. I got two responses the very first day—one from a
friend and the other a senior executive.
The executive was aware about life
insurance products. But he was fed up with life insurance agents and he felt
that they did not provide proper service. I tried to convince him but he was
not ready to believe my words. He kept repeating the same line “Every agent
says that he will provide the best service at your doorstep. But they all
vanish after selling policies.”
When he was speaking to me, the executive
seemed a bit anxious. After the meeting, I asked him, “You seem to be tense...
any issue?”
The executive instantly opened up and
said that he had to dash to Delhi with a friend but could not get tickets.
Luckily, I was planning to go to the capital myself and I had two spare tickets
which I offered the executive.
He accepted and got to know me during the
journey. He became confident that I would provide good service. After returning
from Delhi, the executive signed up for a life insurance policy worth Rs 1 lakh
which was a huge amount then. He has been a satisfied client for around 24
years now.
My first client
taught me the virtue of empathy. I always make it a point to understand the
problems that each client faces and I am not always on the lookout for
business. When clients give me a referral, I always send them a handwritten
thank-you note. These small gestures have helped me to grow my clientele.
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