Wealthbeats Why onboard a client, when you can onboard a family instead?

Why onboard a client, when you can onboard a family instead?

Read on to find out how Pradeep Kumar Jain from Ranchi has followed a systematic approach to acquire 2800 clients through 800 families.
Nishant Patnaik Jan 16, 2017

After doing his engineering and MBA (Finance) from BITS Mesra, Pradeep Kumar Jain took up a job as a surveyor and loss assessor in the insurance industry in 1986. This job was his window to the world of financial distribution.

Since Pradeep Jain had always wanted to do something on his own, he left his job in 1988 and began distribution of post office savings scheme and insurance policies. Later, to broad base his offerings, he started mutual fund distribution in 1991. Currently, Jain advises on mutual funds, term insurance and health insurance.

Success recipe

Pradeep is socially active, and very well networked. He is on the Board of several leading Federations, Industry and Socio-Cultural Associations. This networking not only helps Jain reach out to prospects, but also helps with referrals. He recommends that advisers should actively engage with such social associations to create and cement long standing professional network.

Pradeep also uses social media and Investor Awareness Programs (IAPs) effectively to reach new audiences and create his brand awareness among people. In fact, he has an employee who exclusively manages social media presence for his firm. His firm posts educational content through infographics, videos and articles on social media platforms like WhatsApp, Facebook and Twitter.

For conducting IAPs, Pradeep approaches SMEs and business professionals through various associations. He ensures that only serious people attend such programs. “I do not focus on getting large turnouts at my IAPs. Instead, I am happy to educate just one person in the auditorium who is genuinely serious about money,” says Pradeep.

Recently, Pradeep has tied up with a publishing house to publish a personal finance magazine for his clients and prospects. The magazine covers diverse topics such as how to repay home loan, floating or fix rate for EMI and how to diversify investments through mutual funds.

Business model

Pradeep believes in acquiring the entire family as his clients, not just the individual family members. “Advisers should meet the entire family and try to convert them all into clients. This inculcates savings and investment habits among family members. It also helps advisers develop stronger and deeper relationships with the family. This way, advisers can increase their wallet share and extend advisory services to the next generation of the existing clients.”

In his initial interactions with prospective clients, Pradeep never discusses funds and investments. He says, “We spend a lot of time with families to understand them. It is better to give them some time to develop confidence and trust in you. Once this is done, they will surely do business with you.”

The next step for him is to help them identify financial goals. This sets the expectations right from the beginning.

Pradeep is selective in choosing his clients. He works on his own terms and conditions. He insists on goal-based investments and staying the course no matter how volatile are the markets. He discourages his clients from seeking his opinion on investment advice seen on channels and newspapers.

Pradeep’s approach has paid off as all his clients are still investing with him. Today, he advises close to 800 families with AUA of close to Rs. 278 crore in mutual funds with most of it being in equity funds.

Retention strategy

Staying in constant touch through various touch points is his formula to retain clients. Pradeep sends a weekly newsletter to all his clients. In these newsletters, he gives his views on markets and economy. Apart from this, he conducts knowledge sharing programs on general interest topics such as women empowerment and parenting.  He also invites subject experts to give a more evolved perspective. In addition, he ensures that his nine-member team regularly meets with clients. He has set out a target of 15 families a week for each member.

Employee centricity

For Pradeep, his employees are more important, even more than his clients. “My employees are the face of the company. It is because of their hard work, that the company has achieved this rapid success. Without their support, none of this would have been possible.”

Jain invests in training and development of his employees. In fact, he has mandated two training sessions a month for each of his teammates. All his employees are NISM certified and are planning to pursue professional courses like CFP and CWM in the days to come. In addition, he puts his employees into leadership roles to keep them motivated.

Skin in the game

Though SEBI had mandated fund managers to invest in their own scheme just two years back, Pradeep had adopted the idea of having skin in the game (i.e. investing in the funds he recommends) a long time back to instil greater confidence among investors. All his employees have invested in the funds they recommend.

Fund selection

Jain never recommends the best performer. According to him, even fund ratings companies may not be able to identify the best performing funds for the next five years.

However, he tries to recommend those funds that can give above average returns.

He first looks at past performance to analyse the consistency in performance of the fund during bear and bull phase. The second filter that he applies is monitoring standard deviation and beta of the fund to see if the performance is due to high-risk/reward strategy. Finally, he analyses the track-record of the fund manager and quality of portfolio through turnover ratio, number of stocks and sector weightage.

Future plans

Since Pradeep is planning to expand his footprint in the adjoining districts by opening up new branches, he is planning to grow his team size by recruiting young talent. According to him, small towns and large villages are untapped markets providing a great opportunity for advisers to grow business. He believes that making a physical presence in such locations will help him acquire new clients.

Pradeep’s journey is an inspiring case study for IFAs on how they can follow systematic approach to acquire new clients.

vivek · 1 year ago
I was looking for starting advisory business on my own. This article will help me in my approach. Thankyou so much
MANUAL · 1 year ago
I am planning to start my Mutual Fund Business. Please Guide me on the same
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