Tell us about your early career as an RM. What was your key learning as an RM?
I have been a part of wealth management industry from the last 10 years out of which I worked for broking and wealth management firms for six years.
What I learned is that large distribution firms are structured in a way that you are required to justify your cost. This puts a pressure on the RM to push products regardless of the need of the client. I don’t blame RMs for it because this is how the industry works.
This is what inspired me to quit my job and start something of my own to work for the benefit of investors.
How did you zero down on your company name ‘Black Swan’?
My friend and I decided to quit our jobs to start something on our own. At that stage of our life, people discouraged us from taking this step and said that we will fail. So I just wanted to prove them that we won’t just survive but also thrive. That’s how we zeroed down on ‘Black Swan’.
You cater to CEOs and CFOs. What are their unique needs/goals? Why do you cater to this niche?
The reason why I cater to CEOs and CFOs is because I understand professionals better as I am able to relate to them. Apart from that, professionals are highly ignored. Most wealth management firms target businessmen, which leaves this segment untouched.
Another thing about working with CEO/CFOs or any other profession from the corporate world is that they value your advice. They understand the importance of it and they don’t tend to bargain with us to save money. They understand the need to work in partnership for their investments to grow which I generally feel are some qualities that businessmen tend to lack.
What kind of services does your company offer?
Our services are built on the lines of a family office. We look after all the aspects of professionals. So when a client comes on board we help and merge every aspect of their financial life, taxation and insurance, etc.
You managed HNI clients from the early part of your career. How do you deal with them, in terms of giving service and managing their expectations?
First and foremost, you need to understand their goals and aspirations. I manage HNI clients even today and what I am learning from my ongoing experience is that HNI clients want continuity in relationship. They look for stability in a person who is managing their wealth. Also, you have to be in constant touch with them.
You also need to be transparent about the entire process and the investments. The more open and transparent you are the better the relationship.
How do you win the trust of HNI clients?
You need to understand that they earn and manage huge sums of money. So to acquire their trust, you need to be transparent. In fact, we disclose our income or how much we earn from each investment. I know it is a debatable topic in the industry but I strongly believe that by disclosing our income we can create a strong bond with our clients.
The second step in gaining their trust is that you need to make sure you deliver what you commit. To do so, we conduct quarterly review of our client’s portfolio to align their portfolio to the current macro environment.
We also believe in continuously updating ourselves with current macro and micro economic environment to serve our clients better.
How many clients do you cater to?
We are currently catering to 16 families who are our core clients. Apart from our core clients, we do have some retail clients who are our friends, family members and our team members. We do not count them as our core clients.
How do you go about acquiring new clients?
We acquire 50% of our clients through references and the remaining through LinkedIn networks. We connect with them through professional networks and get their email ids and send them a mail which has a 1.30 min video which shows them what we have to offer.
How much assets under advisory do you manage in mutual funds?
We are currently managing Rs. 18 crore in mutual funds and Rs. 35 crore across all products.
Tell us more about your new robo advisory model...
Mywealthwiz.com is the algo model developed by us. After taking detailed responses from prospects, our model prepares a 13-page financial plan.
Apart from financial planning, we have another model called ‘customized mutual fund portfolio’ which will helps clients select what kind of mutual funds they should invest in instead of randomly picking different funds.
The idea behind this model is to financially empower everyone. When you give information to people you empower them and this will make them loyal to you.
What would be your advice to budding IFAs who wish to cater to HNIs?
Patience is a virtue! Remember it. You cannot pitch a product in the very first meeting. We wait till our third meeting before we pitch any product because you cannot understand the needs of the client in the first meeting. This brings us to next step: understanding the client. You need to understand what are their requirements and future plans.
I would also advice IFAs to constantly study and upgrade their knowledge, especially when they are dealing with HNIs.
What are your future plans?
We want to register our firm as RIA with SEBI. We think that RIA would be a game changer in the industry. It will also bring a lot of transparency in the industry.
We want to become fee only advisors. I believe investors are ready to pay if you show value. For example, hedge fund manager Steven Cohen charges 3% management fee and 50% performance fees. He charges a lot but people are ready to pay.
