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In the latest episode of ‘Lessons from the Masters’, industry veteran Sadashiv Phene donned the master’s hat and shared insights on dealing with retail investors. Notably, he is the fifth largest individual MFD of India with AUM of close to Rs. 1,000 crore.
In conversation with KS Rao, Head - Investor Education & Distribution Development, Aditya Birla Sun Life MF, Sadashiv shared five key lessons to build a strong retail business:
#1 Go and meet your clients: With a busy work schedule, investors are reluctant to take up additional travel to meet MFDs. In my experience, instead of asking investors to come over to your office, it makes more sense to meet at their place of convenience. Also, investors tend to be more relaxed and receptive on non-working days.
#2 Schedule regular meetings and stay in constant touch: Focus on meeting existing clients and prospects as much as possible. Make the most of weekends/weekly offs as people are more receptive on non-working days.
In these meeting, ask questions to understand their dynamic financial needs. For instance, you can talk about higher education plans of their children or their next holiday plans. Such conversations often lead to new investments.
#3 Keep a close watch on redemptions: Every time a client requests to redeem, sit with her to find out the reason. At times, investors redeem money when they see volatility. Hence, managing their emotions is key here.
Also, keep reminding your clients about their financial aspirations to encourage them to stay invested.
#4 Never stop prospecting: Many MFDs do not take new clients. But clients will come and go. It is natural to have a leaky client bucket. While you cannot seal this bucket completely, focus on new client acquisition to make up for departing clients. For instance, if on average you lose 20% of clients annually, focus on acquiring at least 20% or more number of clients each year.
#5 Learn from experiences: Every investor is unique and has different financial aspirations. Observe your clients and learn from them. Make a note of these learnings and use them during your subsequent meetings to create a lasting impact.
