When he was still in college Sandeep Gupta from Delhi made up his mind that he would turn his budding interest in finance into his future profession. In 1989, he took up insurance agency and added stock broking to his services two years later.
A few years down the line, a mutual fund professional advised him to consider offering his clients mutual funds. Post the discussion, he decided to connect with a few other people in the MF industry. Talking with them he realised that SIPs are an excellent tool for volatility management. Thanks to rupee cost averaging, investors generally did not lose money while investing through the systematic route. Convinced of the growth potential of mutual funds, he took his ARN in 2002.
Client acquisition
His strategy was to focus on retail investors. In 2002, he already had a client base thanks to his insurance advisory practice. Initially, he approached his existing clients to start SIPs. Even today, he often uses medical insurance as an entry point to acquire new clients and eventually introduces the benefits of an SIP to them.
Small is big
Sandeep was already targeting retail clients when one of his big clients pointed out the opportunity in the underserviced segments. "Sandeep there are many advisors who would like to give me financial advice but no one wants to give my maid or my driver financial advice," said this client.
These words reinforced Sandeep's belief that empowering these people would help them make better financial decisions and achieve their goals. Also, this was a virtually untapped market with virtually no competition.
Sandeep requested his existing clients to help him approach their household help, drivers and security guards to help them grow money through SIP.
The pitch
He does not believe in using jargon while pitching the SIP value proposition to his clients. While meeting prospective clients, he begins with questions such as, “Are you a salaried employee or a business professional?” As many clients are salaried individuals, he explains to them how they can deploy a small portion of their earnings towards their future financial goals through SIPs. For business individuals, he gives a picture of the future, stressing the importance of diversifying their income streams and how an SIP in mutual funds can help them grow wealth. He highlights rupee cost averaging through tables and performance history of schemes across market cycles.
He encourages his clients to start SIPs even if it is a small amount. He believes that once clients start investing in mutual funds through an SIP, he or she increases the investment. “When clients see the impact of systematic investing on their portfolio they start approaching me for more investment suggestions. Investing is addictive. It is like a drug; once you develop investment discipline you will return with a desire to increase your SIP investments,” shares Sandeep.
Client engagement
Sandeep offers clients both mutual fund and general insurance services. Thus, every year he ends up connecting with them multiple times while renewing their different policies. In the case of his mutual fund-only clients, he makes it a point to connect with them over the phone and update them about their portfolio.
Over the years, he has acquired around 1,600 clients totalling an AUM of Rs.62 crore. He has also streamlined his business to focus on mutual funds and select general insurance offerings.
Sandeep has been able to create a meaningful portfolio for his clients thereby growing his business. Transparency, genuine advice and targeting the often ignored small retail clients are the three corner stones which have helped him build a SIP book of Rs.1 crore per month. Today majority of his new business comes through referrals and kids of his existing clients.
