Naresh Pachisia is a pioneer in mutual fund distribution space in the East. His adherence to his principles and beliefs has made him a successful leader. Pallabika Ganguly traces his story right from his early days in the distribution space
Naresh Pachisia is a part of a family which has been in stock broking for many decades. Their firm - SKP Securities has always believed in need based selling. In the nineties, he realized that investors needed portfolio advisory service i.e. PMS, where they can be guided on overall portfolio rather than trading on tips.
SKP securities, was one of the early SEBI registered PMS providers. After initiating the PMS Service, Naresh realized that the firm was able to provide service to investors only for one asset class, i.e. equity while people need to invest across asset classes according to their risk appetite.
In mutual funds, he found a transparent and a good instrument for people to invest.
“We realized that through this product we can provide investment solutions to people in debt, money market and equity as well. So, we started promoting mutual funds in a big way in 1996,” recalls Naresh.
Naresh led the mutual fund division of SKP Securities and became a CFP in 2002. During those days it was difficult to convince people to invest in MFs because some investors had burnt their fingers after investing in closed ended mutual funds. “Investors were not ready to believe any of my explanations because of the bad experience they had earlier with closed ended funds. According to them it was a non- transparent risky investment,” said Naresh.
Raising investor awareness
To increase mutual fund awareness and remove the negative perception about them, he decided to enlighten investors. The firm took various measures like newsletters, educational articles in newspaper and road shows. Naresh himself has written two books on the mutual fund industry. He was also successful in organizing the first mutual fund seminar in Kolkata way back in 1999.
Building retail business
Over a period of time, Naresh realized that investors seek good customer service so the firm adopted a wealth management approach towards HNIs. While serving HNI clients, he realized that the team was not able to cater to retail clients. Therefore, in 2004-2005, it started training and educating erstwhile LIC and FD agents on mutual funds.
“We were always product neutral. We put in a lot of effort to reach retail clients by conducting road shows and involving the agents in it. And it is the team of SKP business partners who has made the business successful at retail level,” claimed Naresh.
Ban of entry load
It affected his business negatively. According to him, clients in India are not willing to pay as there are too many service providers in the industry. Naresh did try to charge clients but received marginal success. Over a period, Naresh has realized that strong advisory is the way forward.
His words of advice
He believes that the advisor should, first and foremost, not be a product pusher but position himself as a family doctor. Only this way, he would get respect and be able to build up long lasting relationships with the client and the generations to come.
Second, an advisor needs to be an inspiring leader if he is thinking of creating a team. When Naresh started the mutual fund business, he created a team. The team was inspired by the initial success and the learning he imparted to the rest of his team. “One needs to mould the team culture. For instance, my team never has a sales target. I always tell them to be conscious of income number but have more number of satisfied customers as they are the real assets,” said Naresh.
Naresh has scaled up his business by getting liked minded people on board and inclining them towards his way of thinking.
Third, there is a difference between what customers say they want and what they need. SKP Securities have been able to guide customers according to their needs and not their wants.