Background
Paresh Shah used to work for a printing press in suburban Mumbai. Life turned upside down when he met with a train accident on his way to office. He had to quit his job as his health didn’t allow him to travel and he was at home with no income for more than a year.
A well wisher advised, Paresh to sell fixed deposits, PPF and insurance. Heeding his advice, Paresh ventured into something which he had no idea about. He started learning about these products as he made selling FDs and insurance his vocation. Like many other advisors, his initial clients were his acquaintances, colleagues, friends and family members.
Gradually, he expanded his offerings. His friend who was an AMC relationship manager recommended him to sell mutual funds. Impressed with the concept, he decided to start selling mutual funds. He introduced mutual funds to his existing clients. “Convincing my clients to invest in mutual funds was a herculean task. I gave few clients my two cheque books and asked them to use my money if they incurred losses. This established an instant trust. My clients perceived mutual funds as high risk schemes since they were not familiar with the concept. Thus, I made my existing clients invest initially in income funds. Then I gradually introduced balanced funds and MIPs,” recalls Paresh.
The initial journey
As his clientele grew, Paresh felt the need of having an office. However, he did not have the capital to rent out an office. In 2001, Paresh started operating from a makeshift office in a tabela (stable). “I realized that people do not trust easily unless you have an office. I started operating in a tabela because I could not afford to rent a proper office,” says Paresh.
He started visiting AMC offices to get familiar with mutual funds and build contacts in the industry. He still remembers the first cheque of Rs. 2,200 which he received from an AMC back in 2001. “I started my mutual fund business on September 11, 2000 with a lump sum investment of Rs. 3,000 by a friend,” he recalls.
Till 2002, Paresh managed to accumulate Rs. 10 lakh in mutual funds from 50 clients. This gave a boost to his morale and he started pitching to financially weak families to invest Rs. 500 monthly. He believes that the well-off have many people to guide them on their finances and thus he prefers to help people who are most gullible and fall prey to dubious investment products. “I decided to target clients who do not have a secure financial background. My clients include chaiwala, shoe shine boys on railway platforms, panwalas, auto rickshaw drivers, watchmen, hawaldars, waiters, etc.”
After operating from the stable for three years, he moved to a slum in Dahisar known as ‘Kallu Khan Compound’. His friend helped him rent a computer to help him store client data.
But his efforts were washed away in the 2005 Mumbai floods. Recalling the tragic day Paresh says, “Everything was destroyed, including the computer which contained all my client data. Within few hours, I could see fate turning against me. It took me six months to settle down and start again.”
He lost many clients after his office was destroyed by the flood.
However, he did not give up and started afresh. It took him almost six years to get recognized by AMCs. Paresh says that he could not have achieved this feat without the help of his friend Jigar Gandhi, who works for Axis Mutual Fund. “I was invited for a distributor meet for NFO for the first time in my career. Since, I did not comprehend English well, I couldn’t understand anything. Jigar has been of great help in my career.”
By 2007-08, his clientele grew to 1,000 clients. Today, he manages Rs. 125 crore in mutual funds and has a client base of 2,793.
Business model
Due to his limited understanding of debt funds, Paresh prefers to sell only equity to his clients. However, he claims that he invests in all schemes before he recommends them to his clients. “Since the last 15 years, I have maintained this discipline of investing in schemes myself first and evaluating them for six months. I then recommend these schemes to my clients if I’m convinced. Clients won’t trust me if I don’t practice what I preach. I only sell equity mutual funds. Currently, my AUM constitutes 90% equity.”
After helping the weaker sections of the society, his focus in now on youngsters. “I think it’s important to make the younger generation understand the importance of financial planning. I started explaining to college students and gradually they became my clients. I advised them to invest Rs.100 daily,” he says.
Future plans
Paresh is now planning to offer financial planning services to his clients. “I am planning to take a step ahead towards advisory business. My daughter has completed CFP and I would like her to take this business ahead.” His daughter is working with Gaurav Mashruwala to learn the finer art of financial planning.
Success Mantra
“There is no shortcut to success. I would only advise to work hard and never give up. This business is challenging if you do not work with dedication. I faced a lot of problems due to lack of knowledge. Today, the urge of learning something new is missing amongst youngsters. People are seeking an easy route to success,” observes Paresh.
Paresh’s journey is an inspiring ‘rags to riches’ story where he overcame many odds and succeeded through sheer hard work and perseverance.