Anil Raj, who turned to financial advisory by giving up his marketing job narrates his journey and secret behind his success.
Tell us about your early career. Did you always want to be a financial planner? What motivated you to turn to financial planning?
I was an engineering and marketing professional for 20 years before I took up financial advisory. I wanted to start my own venture and so I was evaluating a few options.
I have been investing in stock markets since I was 25. I was introduced to the insurance industry by a friend who worked for New India Insurance. I felt it was a sunrise industry. Also, one of my classmate was an insurance advisor. It looked exciting so I took the plunge. Since then there’s been no looking back.
I’m took up insurance advisory in 2001 and started with mutual funds in 2004. I started my new profession with Tata AIG Life Insurance Company as an Insurance Advisor. Here I must give credit to Tata AIA Life for enabling me to become a Certified Financial Planner (CFP) and training me at their own cost & resources.
What challenges did you face when you started your advisory practice? How did you overcome them?
The journey has been challenging and at the same time exciting. Firstly, the fee concept is something very new to an Indian investor who has been used to getting pass back from the broker/advisor.
Conceptually too it becomes difficult to accept paying fees to somebody who is just collecting your application form and cheque (which is the perception of an investor today) and submitting it to the fund house.
Unless you build that credibility with the client how can you expect him to pay you? How many of us would readily agree to pay a separate cheque, one each for the car manufacturer and another to the showroom dealer?
Every transaction is a test in which we have to excel. Any relationship takes time to build and has to be nurtured with care. The client must realize that it is a win-win situation for both. Even now in general perception, the financial advisory profession does not get the respect it desrves.
Convincing clients has undoubtedly been challenging. I demonstrated my abilities by providing excellent service to my clients.
What were your biggest learnings as an IFA?
I remember this classic line from Chak de India
- Desh ke liye khelo (play for the client)
- Team ke liye khelo (play for the client)
- Aur agar kuch jaan bache toh khud ke liye khelo (then comes your own interest). This works in the long run!
What did you do to grow your client base?
We met a lot of new prospects through my personal and professional contacts. To build our client base we made sure that we constantly engaged with your existing clients. We meet our existing clients on a regular interval. We actively asked them for referrals and the conversion rate was very high. Post the entry load ban, many IFAs started venturing in other products. Thus, a lot of investors were left unattended. These were mostly small time retail investors. We consciously took a decision to cater to these clients. Even today we find a lot of people have problems getting service from manufacturers. So we provide them a helping hand which helps us convert them. I also joined networking groups to get new leads.
I tend to keep in touch with people whom I meet in all facets of my life. I’m in touch with my school/college friends and colleagues. When I told them that I have started investment consulting they were more than willing to work with me.
How many clients do you cater to?
Currently we are catering to more than 200 clients.
What kind of services do you offer to your clients?
We offer financial planning, investment advisory, life & general insurance services to our clients.
Are you considering registering with SEBI under Investment Advisor Regulations?
Not at the moment.
Do you charge fee from your clients. If yes, how did you convince them to pay?
Yes, we do charge fees from our clients after explaining to them the role we play in helping them achieve their financial goals. As most of them come through reference they are already aware of what they will get in terms of quality of advice and service. Mis-selling was quite prevalent back then. Many investors were losing trust in agents. During these times my clients vouched for me for my unbiased advice. This helped me command a fee from my existing as well as new clients.
Going ahead, what are your plans?
Our singleminded aim is to ensure that our client’s portfolio grows. Thus, we wish to have a greater focus on avoiding lapses in our investment advice. No amount of marketing will be of any use unless you make your clients’ money grow or manage to protect it in a downturn. We plan to leverage the present relationships to reach out to more clients.
Your advice to budding IFAs:
- Win the trust of your customers by :
- Quickly responding to their queries/problems
- Providing good service
- Offering what the client needs and not what the market sells. Remember you will be asked to justify your recommendation not today but five years from now
- Build relationships : This is done best by meeting them regularly and not just when business arises
- Educate your client - of course begin by educating yourself first.