In conversation with KS Rao, Head - Investor Education & Distribution Development, Aditya Birla Sun Life MF, Himanshu Kohli co-founder of Clients Associates said that establishing a family office set up has helped his company create a niche.
They have a client-centric model based on the 3 Ts - Talent, Trust and Transparency. The team’s talent is sharpened through constant upgrading and upskilling. The business of money is built on a model of trust. And lastly, each transaction is executed with transparency. His company plays the role of the family CFO to their clients.
Himanshu said that it is important to identify the unique needs of your clients and customize your offerings to that effect. He shared with us some of the innovative ways to acquire and retain wealthy clients. Here are the key highlights of the session.
- Acquiring and retaining clients - HNIs and Ultra HNIs may not be comfortable with novices. They value trust and creditability the most and word of mouth can help with new acquisitions. Referrals from family, friends and existing clients can help establish new relationships.
To start with, MFDs can ask the wealthy for a smaller portion of their investment portfolio; if you do a good job and deliver on the performance of the part portfolio you will win the client’s trust. Building a foundation of trust with one makes way for multiple new clients.
Once the client is on board, it is important to deepen the ties by ensuring utmost confidentially in the dealings. Metaphorically, acquiring new clients is like hunting, while retaining and nurturing them is like farming.
- Offer long-lasting relations - A bank typically assigns a dedicated relationship manager for HNI and Ultra HNIs. Relationship managers are bound to move out of their current role to explore newer job opportunities. Hence the wealthy is then assigned another relationship manager. This change is perceived to be unpleasant and may take place several times.
MFDs can pitch in a stable relationship across the table. They must create and share a long-term vision with the clients. And the bonds can be deepened through a long term relationship approach rather than through a short term transient relationship.
- Identify the investor type - The wealthy clients usually look for solutions that can help them maintain their lifestyle. They require guidance on other matters like succession, philanthropy, business diversification, wealth preservation, geographical diversification, etc. The key to creating customized solutions is identifying the investor type and their unique needs.
Investors can broadly be classified into four categories - the key members of an organization (CXO, CFO, CEO, CIO, etc.), the new-age entrepreneurs, the professionals (chartered accountants, lawyers, authors, celebrities, sportsmen, etc.) and the family business owners
- Explore the unlisted space - HNIs typically have a larger exposure to equity and a modest share of alternate investments. On the other hand, they enjoy a greater proportion of unlisted as well as international investments. Unlisted securities offer an exciting space for the wealthy that can give them access to the new age and innovative businesses. MFDs can help their clients to explore opportunities in different segments like angel investors, venture capital and private equity.
Himanshu believes that every MFD should keep in mind these three things while dealing with wealthy clients - a client-centric model, a strategic allocation as the key to a successful investment and the ability to identify the potential trends.
Click here to view the video.
