Naveen Rego, a financial advisor from Mangalore started charging all his clients ever since the regulator abolished entry loads.
Naveen’s interest in financial advisory developed after he did an internship with Bharat Phatak of Wealth Managers, Pune for nine months during his MBA program.
After completing his MBA in 2000, he worked in the finance department of an advertising and broking firm. He did not enjoy the work in these firms and was looking out for opportunities in other fields. After two years, he quit his job with the broking firm. During this period, he chanced upon a training program to be conducted by Uma Shashikant and decided to attend it thinking that it would help him to develop a deeper understanding of personal finance and investments.
Naveen got to know much about mutual funds from this program. He later started his own advisory firm in 2003 and initially sold both mutual funds and life insurance. But a year later, he stopped selling insurance policies as he had low conviction in the product. “I had deep faith in mutual funds. So, it was easy to convince clients. Till 2007 we grew by leaps and bounds and opened three branches. We also added a few other financial offering to our portfolio like equity broking, corporate FDs,” shared Naveen Rego.
But the rosy days did not last for long and recession hit the market. A little later, SEBI banned entry load. It was a tough time for Naveen.
In 2008, Naveen was forced to change the business model and he moved to a fee based model from a transaction model. After introducing this model, his clientele base went down to 100 from 1500 clients! “The client base came down immediately as I introduced a fee based model. With the shrinkage of clients base, I had no reason to run three branch offices and so I closed them down. I took a decision to concentrate on financial planning only. I also started marketing my business in a different way,” said Naveen.
Marketing Technique
Since Naveen has a small clientele he segregated them in two categories - basic and comprehensive. He charges the investors a fixed annual fee based on the size of portfolio. His ‘basic’ clients are salaried employees earning below Rs 10 lakh pa and ‘comprehensive’ clients are NRIs, doctors and entrepreneurs.
Naveen started conducting investor education seminars for these two target groups to attract clients. This helped him grow his clientele. Naveen maintains a list of such potential clients and follows up with them for a year. If he is unable to turn the prospect into client in a year, he removes the prospect name from the list.
Naveen does not send mailers to his clients or prospects regularly. He feels that mailers go in trash if sent out frequently. “I do not bother my clients by calling them up or sending them mail frequently. I believe that it is better to send one beneficial mail once in three months rather than a mail every day,” said Naveen.
Business model
Naveen is very selective in adding clients. He does not add any walk-in clients till the time he is comfortable doing business with them. “My core competence is financial planning and not doing transaction based deals. Therefore I am more interested in making financial plans… and my clients are free to do transaction through any other person,” expressed Naveen.