What inspired you to get into financial advisory?
I started as a stock broker in 1985. Over the 30 years of my combined experience I have seen many ups and downs of the market. However, after 2000, broking business became more transaction oriented and therefore I decided to diversify and shift focus to financial advisory. In fact, right from the beginning, I have practiced the art of wealth creation through long term holding.
What is your background? What were you doing before venturing into financial advisory?
I have done MSC and MBA. I have been an investor since my student days as share markets always fascinated me. I worked with Pune Stock Exchange as a sub-broker. Later on, I took the membership of the exchange and eventually became the President of the exchange.
How were the initial days of your business? What kind of challenges did you face? How did you overcome the same?
The initial days were very challenging. In 1992, we had distributed UTI Master Share, UTI Master Share Plus and a host of SBI MF schemes which were traded on the exchange at astronomical valuations. As the markets crashed, these valuations nosedived and investors suffered losses. The private mutual funds came in 1994 and did not fare any better. We promoted Birla Income Plus scheme which gave tax free 8% dividend half-yearly.
The distributors of fixed deposits were passing back commissions to the tune of 4-5%. Then the CRB Capital Markets scam happened and investors started losing faith in FDs too. Our advice helped us earn the trust and respect of our clients.
How did you acquire clients?
My initial clients were friends, relatives and clients of my industrial enterprise. I started advising mutual funds to my stock broking clients. I got most of my clients through referrals. I currently have 1,700 clients.
How much assets under advisory do you manage in mutual funds?
We manage Rs. 100 crore in direct shares and Rs. 50 crore in mutual funds.
Tell us about your business model? What kind of services are you offering?
We have different verticals - share broking, mutual fund and insurance distribution, fixed deposits and bonds and private equity.
We aspire to be financial partners of our clients for life. As we have good understanding of all the assets, our business model is based the principle on asset allocation. We have a retail desk which works on the basis of goal based financial planning and a HNI desk which works on client engagement and specific need based investment ideas.
Our in house net work consists of a competent lawyer, taxation consultant and risk analysis expert.
What were your biggest learning as a financial advisor?
One should not spend time in predicting the market. Let the market behave as it wants, one needs to concentrate on following the markets and follow asset allocation. It is our conviction that asset allocation can make or break a portfolio.
Please share a memorable moment in your financial advisory journey
There are many anecdotes to share. One of my client bought a flat out of appreciation in just share of a single company and that too in 3 years! Another client invested in scheme I recommended in 2006 in the name of his twin sons; the only condition we had was the money will not be touched till the boys turn 18. The investment has appreciated by 16 times today and the client is very happy.
What is your key to success?
We endeavor to have total transparency and nurture a holistic trust based relationship with every client. Clients know that an advice may go wrong sometimes due to the nature of our business. I will also give full credit to our young team which is full of enthusiasm
What are your future plans?
We wish to achieve assets of Rs. 100 crore in each business vertical in the next two years.
You are also a member of Pune Independent Financial Advisors Association (PIFAA). How did you get the idea of starting PIFAA? What activities has PIFAA undertaken so far?
The lean period of 2009-2013 forced all the stake holders in the mutual fund industry to introspect. We wanted to sharpen our skills and enhance our knowledge. A bunch of IFAs used to meet every Sunday and discuss various issues confronting the industry. The idea of forming an association germinated in one of our meetings. We decided that our objective will be to learn and enhance our skills. We strictly avoided any commission related issues or negotiations.
In 2011, Mirae Asset came up with the idea of enhancing the image of IFAs. Thus, a blood donation camp was organized by a core team of which I happened to be the founder member. Another important event we organized was an IFA conclave on ‘Challenges before the Independent Financial Advisor: The Roadmap to Investor Wealth Creation'. We have also participated in group activities and brainstormed on issues like sharing circulars of regulators, understanding the nuances of the business, what could be the right strategy in the current market scenarios for advising our clients, etc.
Now, PIFAA organizes at least one program every month in the interest of our members. We also hold annual gatherings where all AMC personnel from Pune and IFAs meet and have a good time with their family members.