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Mutual fund distribution comes with no retirement age and can create a solid family business that can last for generations to come.
Through a sound succession plan, you can pass on your business legacy to your descendants. But, are your children interested in mutual fund distribution? Are they keen to join your business?
Here are five simple tips to motivate the next generation and get them involved in your business.
1. Start with an early involvement but keep it casual
Talk about what you do and share your business stories. Ask for your children’s views on topics you think they can contribute. For example - Which social media platforms has a wider reach? Which colour schemes make a poster more attractive? and so on. Don’t forget to share your meaningful feedback on how their inputs added value.
Next, gradually involve them in your daily business activities. Start with once/twice a week and increase it with time. You can also casually introduce them to your team at office picnics, team lunches and other office events.
Punjab MFD Sandeep Garg encouraged his son to start mutual fund investing way before he joined business. He said, “Having his funds invested drove him to track their performance, which consequently made him more curious to know more.”
2. Tell them about the rewards and keep them motivated
Talk to your children about benefits of trail commission. It may give them a sense of business scope and earning potential in the mutual fund industry.
Industry veteran Rajesh Sodhani from Jaipur pays salary and offers different perks to his children. He explains, “Children find corporate jobs attractive for their lucrative pay packages. It is important to give them a similar reward in business too. I highly recommend a fixed pay structure here.”
Additionally, inspirational business movies and success stories of fellow MFDs/RIAs are other ways of keeping them motivated, believes Sodhani.
3. Assign a designation and start with smaller and doable tasks
Indore MFD Rajesh Kulwal has given a suitable designation to his children. He said, “A designation is like an identity. It gives the authority to represent business officially”. To this, Sodhani added, “They should also have business cards to ease networking and create personal brand.”
Further, Kulwal advocates a step-by-step delegation of tasks to train for bigger responsibilities. He said, “Assign small and doable tasks first. And, most importantly never question them in front of clients. This hampers their confidence.”
4. Follow a piecemeal and experiential approach to teaching
We all know about complexity of financial markets. Explaining everything at one go leaves children lost and confused. Introducing relevant concepts at different stages can be useful here.
Garg believes that the assimilation of knowledge is better through experiential learning. He said, “When my son tracked his portfolio, he understood markets better. He also understood the nuances of portfolio review and asset allocation. Of course, I did guide him at every step.”
Garg added, “Taking children to MFD/RIA meets or business conferences give them newer perspectives and a better understanding of other business practices.”
5. Give them the push, get them a mentor
Kulwal suggests having an external mentor like an industry veteran or a fellow MFD. He said, “Mentors can guide our children to identify business goals and stay committed. They can also help them to improve constantly through constructive feedback. Another important aspect of having an external mentor is that children will more likely to take mentors seriously.”
Sodhani believes parents can be mentors too. He said, “We know our children and their calibre closely. We can guide them to nurture strengths and overcome weaknesses tactfully.”
