Amit Bivalkar who has
worked with DSPBR, AIG and Fidelity got the idea of starting his financial
advisory practice during the market crash of 2008. Today he manages 2000
clients with assets under advisory of Rs. 750 crore. Read on to know more about
his inspiring journey.
Tell us about your early career. Did you
always want to be a financial planner?
I started my career with a distribution company in Pune for three years and then moved to DSP Merrill Lynch (now DSP BlackRock) Mutual Fund. I worked with DSP for three years and was heading Maharashtra, MP and Goa. Post that I moved to Bangalore to take charge of Karnataka and Goa region. My career in DSPMF lasted for three years post which I moved to Fidelity Mutual Fund as Mumbai head and was there for two years before moving to AIG Investments to head West and East India. It was during the crash of 2008 that I saw that advisors are not talking to their clients sensed an opportunity to start the business and formed Sapient in 2009.
What inspired you to take up financial advisory?
During the boom of 2007-2008 lots of closed end funds were launched by AMCs. Also, there was good appetite among both clients and distributors. Hence all NFOs got an overwhelming response. Post the crash there was a period when clients were frustrated and distributors were directionless. Although I feel this kind of Six Sigma event puzzled even the AMCs which too maintained a low key after the crash. At this juncture there was a big void in the relationships between the clients and the distributor. Clients were feeling orphaned and that sparked the idea of starting a distribution company.
Tell us about your initial journey. What kind of teething trouble did you face?
We started the company in June 2009 and all the three directors decided not to take salaries for six months till the business reaches a self-sustainable level. We were in a 400 square feet office with 3 directors and three office assistants. Teething troubles came in terms of clients; because many people to whom we had bounced off the idea of starting a company showed enthusiasm but till date have not given us business! That dampened the spirit a little bit but that also made us work hard which paid off. We are thankful to all those who did not do business with us because of which we were hitting the ground and meeting many new clients.
Tell us about your business model? What kind of services are you offering?
At Sapient we believe in two things - 1. Invest client’s money in products which you would have sold to your family members and 2. We invest our own money in schemes which we recommend to our clients. We also believed that there are many advisors who sell all kinds of products - equity, mutual funds, insurance, bonds, NCD etc. We thought we should specialize in a particular field and therefore we only sell mutual funds. It’s like a typical Maharashtrian Thali restaurant where you don’t get Punjabi, Udipi or other cuisines. People who want to invest in mutual funds say that these guys only sell funds and therefore must be researching well. This strategy has paid off well. Also one golden rule which I learnt in DSPMF is that you can make money, lose money and again make money but if you lose reputation then it is very hard to bring it back. Hence we follow high level of integrity and ethics when we are distributing funds.
How much assets under advisory do you currently manage in mutual funds?
Currently we manage Rs. 750 crore of assets under advisory in mutual funds. About 20% is in equity, 35% in long term debt, 30% in short term debt and remaining in liquid funds.
What were your biggest learnings as a financial advisor?
Put clients interest first, follow highest level of integrity, sell funds with lowest expense ratios, comfort the client, you may not be able to give all calls correctly but handhold the clients when there is stress in the market. Make more calls when markets are depressed because during boom the clients call you more.
How do you win the trust of your clients?
As I said we follow ‘the owner of the hotel eats here’ theory and hence we put our money where our mouth is. We analyze products which are suggested to clients by competitors and then offer an unbiased view of the product. Even if the product is not distributed by us but warrants allocation then we ask the client to put money in the product through others.
How do you get new clients?
We only have a reference model; our online presence too gives us clients. Word of mouth is what we believe in and we are blessed with references from our existing clientele.
How many clients do you cater to?
Currently we cater to around 2000 clients
Going ahead, what are your plans?
Technology is going to be a big game changer and we have developed some proprietary online software for our existing clients apart from the normal Portfolio Viewer. Transactions will remain the same but the interactions are changing; for example ICICI Bank started with Branch Banking then ATM banking then Internet Banking and now mobile banking, the transaction has remained the same but the interaction has changed which is why ICICI is the leader in the private bank category in terms of acquisition of clients and maintaining good service levels.
Please share a memorable moment in your financial advisory journey...
After 3 years in business, we won the CNBC TV18 Best Financial Advisor for the West II region. This was the high point in my career. More importantly clients referring prospects is something which motivates us to build more efficient and transparent systems and maintain highest level of ethics and integrity.
Your advice to budding IFAs.
· Put clients interest first
· Stay away from negative people
· Put out a priority list
· Compete with yourself
· Watch out for your motivation levels
· Don’t take your clients for granted.