As the times evolved, Nikhil Mehta kept fine tuning his marketing approach, finds Ravi Samalad
“There is a saying in Gujarati. If you survive in the business for 1,000 days then you have made it,” says Nikhil Mehta, a Mumbai based financial advisor.
Nikhil is an MBA in Financial Markets from American International College. Post his MBA he worked for a few months with a bank in Springfield. Once his visa expired, he came back to India in search for a job. Sensing better opportunities in financial services than in his family’s textile business, he started looking for the right break.
Soon he landed a job with broking firm DSP where he was interviewed by the legendary Hemendra Kothari. Nikhil was placed at the BSE to handle HNI and institutional clients. This gave him an opportunity to develop a deep understanding of equity markets. But his desire to run his own business led him to part ways with DSP. He returned to US in search of business ideas.
After two years he came back and floated Basic Financial Service in 1994. Initially he got a few walk-in clients since his office was facing August Kranti Road. Later he moved his office to the back of the same building.
To scale up his business faster and get visibility, he used direct marketing technique by inserting pamphlets in newspapers. He inserted 3,000 to 5,000 pamphlets in Economic Times and Times of India during the weekends. To reach out to Gujaratis, he took Mumbai Samachar newspaper. The pamphlets were circulated in Napean Sea Road, Breach Candy, Tardeo and Peddar Road.
Nikhil had used a similar strategy for promoting an IPO some years back. The merchant banker handling the IPO gave him the addresses of residents in Churni Road, Valkeshar and Breach Candy. He got 40 clients from that exercise. Later these clients started investing in mutual funds, company FDs, RBI bonds through him. 95% of those clients are still with him. The business grew further through word-of-mouth and referrals and today he has around 1,000 active clients.
He stopped the pamphlet strategy as it was not working out well. He has now started circulating a 16 page newsletter with informative articles on insurance and mutual fund among his existing and potential clients. “You don’t drive Padmini Fiat or Ambassador cars anymore. So you have to evolve with changing times,” explains Nikhil.
Distributing newsletters is not just a commercial exercise for him. He says it is also an investor awareness initiative from his company.
Products
He started with bonds and company fixed deposits and his foray into mutual funds began with debt funds in 2002. In 2003, he started recommending MIPs and equity funds. Nikhil claims that those of his his clients who invested in 2002 are still making 15 to 18 percent CAGR on their investments. For the last two years, he has shifted his focus back to debt funds due to the uncertainty in the markets.
Team
Nikhil has a team size of 10. He organizes training sessions for his team by calling AMC officials to his office. He also sends them for short term training sessions on markets. He wants to grow his team size and expand his business but the recent regulatory uncertainties have forced him to defer his plans.
Online is the way ahead
Nikhil is a member of Next Advisors, a Mumbai based IFA group. Recently this group has developed an online mutual fund investment platform. So far 25 top distributors from India have subscribed to it. His team is currently marketing the software to other IFAs. Their idea is to help IFAs tap youth who are more comfortable with online investments.
Going strong
Irrespective of the regulatory hurdles, Nikhil believes that he is at the right place at the right time.