IFAs like Ashwin Vajani are truly a rare breed. While other IFAs boast of a client base running in to hundreds and thousands, he is happy with twenty clients after twenty years! Jayshree Pyasi gets his unique take on his profession and approach to business development
His career as a financial planner began with his B. Com days. Coming from a middle class family, Vajani was expected to augment the family income. Since he did not have financial backing to start a business, his options were limited. He took up a LIC agency as it did not require any capital.
During his initial years, he learnt a lot from his clients and people from the industry who made him understand intricacies of the business. “One key realization for me was that the financial advisory business could work and grow without capital,” says Ashwin.
One unique factor that separates him from other IFAs is his focus on debt funds. He started with advising debt and income NFOs. So, while many IFAs woke up to the virtues of debt funds only after the 2008 fall in equity markets, he has been recommending debt funds for twenty years. Debt funds have been his preference because he likes the stability and regular returns they offer. This faith in debt funds is shared by his client base as well. “My clients believe in taking risks in known variables and debt funds are the best option available. My mandate is to offer them the same with minimal risk” says Vajani.
He follows a simple rule to invest only the gains garnered from debt investment in equity funds. So unwavering has been his conviction that he has never changed his clients’ asset allocation even in booming markets. “For both the IFA and investor, it is essential to be committed to a long time horizon. Changing your game plan according to the market may work for you once or twice but it can never give you stable returns” avers Vajani.
Vajani attributes his success to his understanding of client’s risk appetite and profile. His years with industry have given him the insight that while product and advice play their own role, it is the understanding of client and investment processes that form the backbone of the industry. Today, he has an impressive AUM of 170 crore with eighty per cent of it in debt and twenty percent in equity.
Another remarkable fact about Vajani, is that he runs a purely HNI model. Ninety percent of his business comes from his top ten clients. A concentrated client base of twenty gives him ample time to meet industry people and deepen his understanding of the industry.
Vajani runs a non-fee based model. “Today, even though I have the mandate from my clients to charge a fee, I make do with AMC commissions. In fact, my clients says they are willing to pay me a fee, irrespective of the entry load!” claims Vajani
Another aspect that distinguishes him from others around him is his willingness to learn from his clients. “They have earned money to invest thus their experience transcends my own. They can teach a person a few things about life. IFAs try to impress a client but I believe that it is the client who has the ability to leave an impression,” says Vajani.
Vajani plans to retire early as money is no longer a priority for him. Whatever business he does now is for personal satisfaction. He feels he can be selective about choosing his clients. Today, he only goes for clients who are able to give him an AUM of ten crore. He collaborates with only those clients think alike and are capable of sticking to a mandate.
His advice for the new crop of IFAs is that in the current market scenario equity and debt both offer great opportunities for the investor to make decent returns. “Seize this opportunity and recommend the right mix of equity and debt to your clients now based on their needs. Once they make decent returns, you will make them your clients for life,” concludes Vajani.