Bhavesh D Damania gave up a career in banks to become an IFA. In 10 months, his income has touched 60% of his last six digit salary
Mumbai: Bhavesh D Damania was a banker and a wealth manager. He has worked for top banks like ABN Amro Bank, American Express, ICICI Bank and ING Bank. He has now transformed into an independent financial advisor (IFA).
The seeds of Damania’s transformation were sowed during the 2007-2008 global credit crisis caused by sub-prime housing loan defaults in the US. Banks and companies in India too were impacted and had gone on a cost cutting drive, freezing recruitment and increments.
He was then heading ICICI Bank’s wealth management sales in Mumbai. Fearing that it would be difficult to get a fair rise in salary as well as promotion in the following year as the bank had announced a freeze in increments and promotions, he decided to make a career move.
He joined ING which gave him about 65 per cent jump in salary. He was able to make substantial savings during his two-year stint at ING. These savings were enough for him to give him a buffer.
Damania finally took the plunge 10 months back and decided to provide investment advisory services to rich clients. In this short period, he has Rs 5.5 crore of assets under advisory.
While working for banks, he had the backing of established brands. That is not the case now. His target was to achieve revenue flows which were equivalent of his salary in ING in the first year itself. But Damania won’t hit that target. His revenues in the first year as an IFA would be about 60 per cent of his salary in ING.
Damania says he is fine with what he has achieved so far. The money he has earned so far is good enough and anyways, he had made a provision for a few years without earning any income.
“I approach some of the clients whom I served at the banks and urge them to use my services. I tell them, I am the same person from whose advice you benefited earlier. And I would be able to devote more time for each one now,” says Damania.
Majority of his clients are those whom he served while working for the banks. All his clients pay him a fee. Damania does not intend to have more than 50 clients in all as he wants to serve his customers thoroughly. He has 12 clients currently. Damania says he will need four years to firmly establish his advisory business. His belief is that financial advisory cannot be institutionalised. “I am an individual and my expertise cannot be same as someone else,” he says.
His clients argue that he now does not have the backing of institutional research which is available at banks. He counters saying “When you have fund managers doing the research, why do I have to do it again.”
He was not long ago a part of the banking sector where there is intense competition to have assets under advisory. But he suggests now that banks were wrongly selling investment products.
Damania sells only mutual funds. Depending on the investment need of clients, he recommends a portfolio of schemes in which to invest. “If a client wants to invest in a scheme that gives good dividends, I recommend a scheme where the dividend payout is good.”
He is already among the top sellers in his home branches at three leading fund houses
Unit-linked insurance plans (ULIPS) is what he would have sold in large number while working for banks, but this is one product he hates to the core. He does not sell insurance at all. The only insurance product he recommends is a term plan.
The first step in financial planning is setting a goal. But investors are just not interested in this first step. Damania says the only goal clients have is to earn big returns.
Damania is one of the few but growing tribe of people who have turned IFA giving up comfortable and well-paying corporate jobs. It will be for people like Damania to take advisory business in India to a different level where financial planning through goal setting becomes the norm.