Mumbai based Jayesh Parekh comes from a family that has been in the business of engineering goods. Upon completing his graduation in commerce in 1980, it was a natural transition for him to join his father’s business. The journey from there, to his advisory practice was a move completely by chance.
It began with Jayesh taking up an agency after attending a training programme to help his friend who was a development officer with an insurance company. This introduced him to the life insurance category and its role in securing protection and financial freedom for families. He started off with this, his earliest clients being friends and family.
Back then, one of his clients approached him to invest a large corpus in fixed income funds. To be able to assist this client better, Jayesh began his research on fixed income instruments. Starting with debt funds, Jayesh soon came upon the entire spectrum of mutual funds. To test the product for himself, he invested close to Rs.8 lakhs in various mutual fund schemes. To his delight, his portfolio delivered handsome returns in a reasonable time frame.
This personal experience helped Jayesh realize how mutual funds can benefit investors in the long term. This was when he decided to diversify his product offerings and in 2001, Jayesh began mutual fund distribution, while continuing to manage his family business.
Thanks to the beginnings of his own experience with mutual funds, Jayesh believes in empowering his clients through financial knowledge. His first few client meetings never feature any product discussions. Jayesh says, “We never ask our clients to invest in mutual funds in the first meeting. Our focus has always been on understanding the client's needs and make him realize the significance of investing money for the long term. We also help investors understand the concept of risk, as those who come on board with this understanding are likely to stay invested for the long term.”
15 years ago when Jayesh set up his mutual fund distribution, many people were unaware of mutual funds. However, things have changed since then and now people understand the concept of mutual funds better. They are beginning to understand the benefits of investment through SIPs says Jayesh.
Jayesh adds that he has also observed a growing maturity among the investors when it comes to equity funds. “There was a time when people used to press the panic button every time the market went down. But now I get a call from investors requesting to execute transactions whenever the market slips.” This is a mature sign he says.
Over the years, Jayesh’s advisory business has grown with a large concentration of HNI clients. Coming from a business family himself, his clients since early days were mostly HNIs. As his business grew, he received a lot more HNI clients through referrals.
His prolonged exposure to working with HNI clients has helped him derive deep insights into this high-value segment. “Dealing with HNIs is very different. They are sharper, business-savvy and understand how money grows and moves. They recognize your value in a couple of meetings. Being an adviser to them, having sound knowledge of subjects like company law, commerce, economics, personal finance and taxation to serve them was a prerequisite for me,” Jayesh says.
Jayesh has HNI clients from across the globe. His client mix has driven him to upskill when it comes to advisory. He believes that this has helped him grow as an adviser and instill a certain seriousness and discipline in his own practice. In fact, Jayesh strongly recommends that IFAs pursue professional qualifications like CFA and CFP to hone their skills even further.
Jayesh has over 600 clients. When asked how he manages to serve the large client base, he said that he has a team of 7 able assistants to manage servicing. To better manage this client base, he has segmented his clients based on ticket size.
Personal touch and one-to-one attention goes a long way in retaining especially high value clients. “I constantly stay in touch with my clients through regular meetings. Meeting them in-person helps me track client aspirations and preferences better as they change over time. This also helps me cement my relationship with them and build trust.”
Jayesh also uses web based technology extensively to connect and stay in touch with his clients. This helps him to service his overseas clients comfortably. He also uses a software using which his clients can track and execute transactions in mutual funds on the go.
Jayesh believes that accrual funds tend to be most under rated. In his opinion, accrual funds are comparatively less volatile than other fixed income funds and are best suited for those who seek capital appreciation in the fixed income space.
He says, “Going forward, banks may reduce deposit rates and returns from fixed deposits may not be attractive. In such a scenario, accrual funds will be best positioned to deliver better returns than bank FDs due to their investment strategy. Also, in terms of tax benefits, accrual funds have an edge over bank FDs. Hence, we always position accrual funds as a better alternative to bank FDs.”
His begins his funds shortlist with the higher rated funds. They are curated, and he believes that this is a good starting point to identify quality funds. His second filter is assessing consistency in performance. He examines past performance of the scheme to determine the performance of a fund across bear and bull cycles. The consistency of past performance helps him identify funds which can limit losses in a bear market.
Finally, he closely examines track record of fund managers and portfolio construction. “I give maximum weightage to portfolio construction as a quality portfolio has a better chance to outperform across various market cycles,” opines Jayesh.
Drive to grow
Jayesh’s story is a perfect example of how upgrading knowledge and skills can help advisers scale new heights, and develop a niche business.
He balances both business, and his passion for advisory with great skill. “Managing time is the key to success. Better time management skills help you work smartly and complete tasks in quick time. In fact, it gets easier when you follow a time table.”
He runs the family business in the first half, dedicating the rest of the day to his passion which is mutual fund advisory. He responds to client calls even if he is occupied. He works through weekends, and on Sundays to ensure smooth functioning of both the businesses.