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While alpha and beta are key performance measures in the mutual fund space, gamma is equally crucial. “Gamma is the extra income that an investor earns because of your advice,” said Prem Khatri, Founder and CEO, Cafemutual at the 14th edition of MFRT at Bengaluru.
Though asset allocation is important, behavioural coaching plays a major role in adding that extra return.
“As MFDs, you play a unique role in investors’ life. You are part transaction facilitator, part investment guru and most importantly part counsellor”, said Prem. In this context, he shared three simple ways to shift from transactional to more meaningful client engagement.
1. Make intangible tangible - Services are intangible i.e. investors cannot see, feel or touch your guidance. Further, they are unable to quantify your competence and knowledge. Your efforts, integrity and good intentions are also invisible.
You can convert intangible into tangible by outlining detailed processes. Pen down your work style, investment approach and recommended deployment of investors’ funds with justifications. Consider sending these in the form of a letter. Also, tell them about your constant availability and don’t forget to thank them for reposing their confidence in you.
2. Turn complex simple - Simplify complexities with the help of storytelling. Use narratives to communicate your messages and address investors’ concerns. Further, make your narratives stronger by integrating facts and figures.
For instance, you can create a well-researched script basis BSE/NSE/SEBI data to pacify investors’ fears around market volatility.
Storytelling puts things into perspective and creates a bond of trust.
3. Prepare investors to face future uncertainties confidently - Markets are inherently volatile. While returns are not in your control, giving investors the confidence to deal with uncertainties is in your control. Irrespective of market movement stay in constant touch with clients. Focus on trust, empathy, understanding, handholding and discipline.
This gives investors confidence that they can deal with volatility.
