A professional approach and helping victims of mis-selling helped Prateek to grow his business.
Born
in a middle class family in Bhilai, a small town of Chhattisgarh, Prateek Pitalia
imbibed ethics and values from his father who was a senior official in Bhilai
Steel Plant. After completing Post Graduate Diploma in Business and Management
from University Pune, he got his first assignment in a financial advisory firm
called Way2Wealth in Mumbai in 2004. He left the organization a year later and
decided to venture on his own.
Prateek then moved to his hometown as he sensed a big opportunity in his state for financial advisory services. He recalls, “Chhattisgarh was then a newly formed state. Very few people were engaged in the distribution of mutual funds. Also, there was a dearth of financial advisers. Also, I felt it’s my moral responsibility to help people of my hometown achieve their financial goals.” In 2005, he floated a financial advisory firm called ‘Mudra – The Investment Clinic’ with the help of his family members.
Prateek wanted to give professional touch to his practice from day one. He appointed a staff dedicated to customer service, administrative support and transaction execution. Initially, he found it very difficult to sell mutual funds as there was no awareness among people. However, his father helped him acquire his first client. But that was not the kind of start he was hoping for.
Prateek’s business was badly affected due to unethical sales practice of other distributors and insurance agents. He recalls, “When I started my practice in Bhilai, I observed that most distributors were passing back commission to clients. As a result, distributors were selling NFOs which offered high commissions, compromising the interests of clients. Such practices had affected both distributors as well as investors.”
Prateek didn’t give up so easily. He turned this weakness into his strength. He started a help desk for people who were victims of mis-selling. He helped them redeem their investments. Also, door-to-door marketing strategy helped him to grow his business. His team members met 10 prospects a day. Very soon, Prateek built a good rapport with people and his client base grew to 273.
However, in the 2008 market crash, he saw his assets under advisory drop drastically. “Many clients who burnt their fingers had redeemed their investments from equity funds. Also, no new investors were coming on board due to negative sentiments,” he said.
In order to overcome these challenges, Prateek decided to change his business model. He started researching about practices prevalent in global advisory market on internet. He came to know about the concept of fee based financial planning.
Taking a cue from global practices, he adopted fee based financial advisory service in Bhilai. He introduced the concept among a few clients. He changed his pitch from ‘returns’ to ‘goals’. Some clients came on board while other chose to continue with the existing commission model. Hence, he decided to work on both models.
Prateek tried to replicate the processes followed by advisors in developed markets. He started providing the minutes of meetings in a document to clients along with other details like his recommendation, expected returns, transaction details, commission disclosure, etc. Also, to avoid any conflicts, he put in place a mechanism for record keeping of recommendations and transactions done by the clients through him. Such a professional approach helped him get corporate clients.
He gave a new avatar to his help desk by naming it ‘Mushkil Asaan’. In a very short span of time, his help desk’s popularity grew by leaps and bounds. Majority of people who came for counselling became his clients.
Slowly, his client base grew to 553. Prateek currently manages assets under advisory of Rs 60 crore in mutual funds and Rs. 90 crore across all financial products. He has a team size of 10.
Prateek aims to achieve asset under advisory of Rs. 100 crore in mutual funds within two years. He wants to further enhance his practice on international standards. He says, “Whenever my clients get exposed to organized markets in India or abroad, they should feel that they had received the same high standard of service and professionalism in Bhilai or small state like Chhattisgarh.”
Prateek is now planning to register with SEBI as an Investment Adviser.