The mutual fund distribution business is a low capital business. A computer, a mobile and a desk is all you need to start selling mutual funds. But this setup is suitable only for starters. Working alone and out of home is not conducive in the long run.
This brings us to the questions that if not from home then from where? Senior distributors and RIAs say there are two options one can look at — co-working spaces and private office. For those who are at the very start of their career, even coffee houses make sense.
While the concept of office has existed for decades now, co-working is a modern day low-cost solution for businesses and self-employed individuals who can't afford to rent a whole space amid an ever-rising real estate prices in cities. Co-working spaces are like a shared office, where you can rent a seat, cabin, a desk for a whole team or even a whole floor. In a city like Mumbai, one can book a single seat for as low as Rs 4,000-5,000 a month.
MFDs say co-working comes with a lot of advantages. The biggest among them, as per Mumbai MFD Nitesh Buddhadev are as follows:
- One does not have to worry about the maintenance, cleaning, electricity bill, internet etc. and can devote all the time to working for clients and chasing new business
- There's a lot of scope of networking outside the mutual fund community which is essential to broaden the horizon
- The networking opens up opportunity to reach out to new prospects and conduct investor awareness programs
- The co-working spaces provide a much better ambience than what one can create in a private office. "Most of my clients really like visiting me at the shared space due to the atmosphere," Buddhadev says
- Apart from that these spaces have re-creational spaces which are essential in the high workload field of distribution.
Buddhadev, who has been working out of a top shared space in Mumbai for over 3 years, said there's only one problem with the setup. "You end up spending a lot of time in providing free advice to people you end up becoming friends with at the workplace.”
But, others see a problem of 'wrong messaging'
"Co-working spaces are a good option, especially at the beginning. But they can convey a wrong message," said Ranjit Dani, Founder and Director of Think Consultants. "You want your clients to invest for the long term but if you yourself work out of a temporary setup, you may find it difficult to gain their confidence," he added.
Harshavardhan Bhusari, Founder of Fin Pals, shares a similar opinion. "It is comforting for clients when they see you working out of a permanent setup. Office gives the perception that you have a stable business," he said.
For Bharat Phatak, Director and Promoter of Wealth Managers India, the choice between the two depends on a lot of factors. "It is a matter of convenience. We have an office in Pune, but in Mumbai, we work out of a shared space. So, it is all a matter of what suits your needs. One should be very flexible with the workplace selection," he said.
The concept of office sharing
In between the concept of co-working and private office lies the option of shared office. Mumbai MFD Vaibhav Rane, who has been working out a shared office for some years now, said the concept has allowed him to save a lot of expenses. "We are three MFDs who work out of two shared offices. In partnership, the profit is shared but, in our case, we share only the expenses. I explored co-working earlier but the shared approach has worked better for me," he says.
