Pramod Saraf, Director, Swan Finance Ltd of Indore, CFP won the CNBC TV 18 best performing financial advisor for north India in 2010. But what is truly remarkable about him is that he has doubled his business post the entry load ban. Jayshree Pyasi finds out how he has achieved so much.
Being an IFA gives freedom
Pramod was brought up in a family where financial services were the preferred profession; both his grandfather and father are retired bank officers. It was a natural decision for him to be in financial services and his reason to become an IFA was the ‘freedom’ the advisory business offers.
“An IFA has the freedom to select a product based on investors’ requirement from the wide range of products available in the MF Industry. With SEBI as the watchdog, it gives us peace of mind that the investor’s money is safeguarded against any misconduct,” says Pramod.
His motto
Pramod has been in financial advisory space for the past 15 years. And since the first day, his basic motto has been to remain true to his profession and give his 100 per cent to it. So Pramod makes it a point to keep himself updated on market developments. He is also a voracious reader of books on finances.
Pramod has been able to rack up an impressive AUM of Rs. 90 crore in non-metros like Indore and Bhopal. Reflecting on his achievement, he says, “I have been able to earn the trust of customers instead of money because, according to me, money will eventually move in the direction where customers move.”
Trade mantras
Client acquisition is an ever present challenge for any advisor. In addition to generating referrals from existing clients, he has also undertaken initiatives such as radio chat shows, organizing service camps, in-house magazines and conducting financial education seminars.
His radio program “Hello Mutual Fund” which was a live interactive program aimed at creating greater awareness amongst investors, turned out to a platform to generate new leads as well.
Swan Finance
At Swan Finance, Pramod and his team work on a direct marketing model with no sub-broker system. They have offices in the top cities of Madhya Pradesh like Indore and Bhopal. Swan Finance serves HNI clients, mid-sized clients as well as retail clients with investments as low as Rs. 500. Even though Swan Finance has 2,000 investors, Pramod ensures that each client is treated well. His SIP book itself is 1200!
According to Pramod, the entry load ban came in the industry due to the problem of high number of participants. But for him, it was a blessing in disguise as it gave him an opportunity to expand his business through quality and commitment. “It helped us in reaffirming our presence in the industry as educated and qualified professional financial planners,” says Pramod.
Pramod charges his clients for specialized services. “We do not charge a fee normally as we believe that the trail and upfront commission is reasonable enough. But definitely we have started charging fee for specialized services like pension, gratuity, tax planning,” says Pramod.
Regarding the new transaction charge of Rs.100 / 150, Pramod believes that this will help them meet routine expenses. He feels one positive fallout of this will be that IFAs will not avoid retail clients.
How different are the clients of Bhopal and Indore?
People in the two cities have a different mindset as Indore is a commercial capital while Bhopal is the administrative capital. With more exposure to business opportunities, Indore investors are ready to take higher risk with the average tenure of their investable surplus money being 2 to 5 years. In Bhopal, the average tenure is of 3 to 10 years which clearly indicates goal based investment planning. “The client profile is mixed in both the cities but the concentration of HNI and professionals is more in Indore and retail, retired, govt. employees etc is more in Bhopal,” says Pramod.
Words of wisdom
According to him profits in this business are the by-products of a successful relationship with the client. So an advisor needs to be confident and work with integrity. “Our profession is based more on trust than on returns. Always keep a long term career and goal in mind,” says Pramod.