A mutual fund advisor for 18 years, Mukesh Ramnani of Varsha Investments reveals how he has grown his business over the years
The 50 year old financial advisor Mukesh Ramnani grew his mutual fund business by persuading his IPO clients to invest in mutual funds. “It was easy to convert HNIs as they were already accustomed to investing in equity. Moreover, during 1994, these products gave a double digit tax-free return which was comparable to the 8% return from RBI bonds,” explains Ramnani.
Going back to the early days of his career, he says that it was a ‘boom’ phase in the industry when Ramnani entered the financial distribution field. He started in 1993 by offering different kinds of financial products like IPOs, company deposits and postal deposits. He formed Varsha Investments in 1994. “We used to sell fixed return products during that time as it was easy to convince investors to invest in those products. Soon, MFs came into limelight when private players entered the market,” reveals Ramnani.
He added, “When I entered the distribution market, there were not many professionals who sold financial products. Initially 10 of us from the distributor community decided to sell mutual funds.”
He got in to the mutual fund business by empanelling with Kothari Pioneer and Birla Mutual Fund. By this time, he had already built up a good client base of 100-150 which was a mix of HNIs and retail. His HNI clients were keen to buy IPOs, ergo; he started selling them mutual fund NFOs.
The memory of his early days brings a smile on his face. Comparing the early days to the current situation, he says, “Currently, it is difficult to sell mutual funds as the market has not been supportive for the last three years. During 1995, the market was also supportive and these products earned good returns for the clients.”
He expands his client base in two ways - following up with his old clients from his data base and adding clients through reference. He also is a great believer in the retail model and therefore welcomes walk-in clients.
Besides mutual funds, Varsha Investment also takes care of the insurance needs of clients. Ramnani sees a robust future for the insurance industry. He believes that service issues which existed in the insurance sector earlier have disappeared with new private players entering the industry. His firm currently has tie-ups with LIC and ICICI Lombard. He plans to expand in a big way in this sector by tying up with three- four more players in the insurance industry.
He also sees competition aggressively increasing in the advisory business, compelling advisors to change their marketing strategy often. “If the market is bearish, you have to sell gold or debt fund rather than equity. Initially when we started we marketed only equity funds, debt funds were not in picture,” says Ramnani.
In the last 18 years, he has built- up an AUM of more than Rs. 150 crore and manages a client base of more than 1000. He plans to add one or two more branches to the existing two branches.
Ramnani wants to make his firm a complete financial distribution hub which would offer a basket of products - IPOs, fixed deposits, CD, mutual fund, real-estate and home loan. He claims that his son who is currently pursuing CFP will help him fulfill his dream and take Varsha to new heights.