Nashik-based Pravin Mutha is a certified financial planner (CFP) and cricket enthusiast. His passion for the game becomes evident as he draws parallels between cricket and investment plans. This financial coach firmly believes, “Cricket is not just a sport, it’s a religion practised throughout the country across all age groups. As financial planning can be a dry subject for most people, I use cricket to explain the investment process. This ensures I have the client’s attention as most of our clients are cricket fanatics.” This advisor has built an Assets under Advisory of Rs.150 crore, most of which is in equity.
Pravin began his career as a sub-broker in 1992. Having hit rough patches in his distribution business due to financial crisis, he soon shifted focus to other products like post-office savings, debt instruments and mutual funds. He put his own money in these instruments to test the waters. Over time, he gained conviction in mutual funds as he realised that these are the only instruments, which can consistently beat inflation over the long term. In the late 1999 not many Nashikkars were aware of mutual funds. Pravin saw an opportunity here and launched his distribution and advisory business, meantime met Kavita Devi during a Birla Meet. Their passion and quest for knowledge matched. They both saw financial planning as a vast field that requires continuous updating of knowledge and technology. With this vision, they formed FINANZINDIA in 2013 for perpetual service to investors.
How to win clients
In the beginning, the advisory business had a handful of clients; today it caters to over 100, including HNIs. Pravin attributes this success to his client acquisition strategies:
- Investor awareness programmes (IAPs): Pravin conducts investor awareness programmes once every year. He believes that while such programmes help people understand the benefits of mutual funds and financial planning, they also provide an excellent opportunity for prospecting. Pravin’s passion for cricket is evident from the way he positions IAPs. To ensure good participation, he keeps the agenda interesting by co-relating topics related to personal finance with cricket such as ‘Score a century through SIPs’ and ‘Hit sixes and fours like a pro in mutual funds’. Pravin also has a strategy to address women investors – he helps Kavita Devi for special awareness programmes for women on occasions such as Women’s Day.
- Social Media: The Nashik advisor has a Facebook page where he posts knowledgeable content and interesting quizzes related to personal finance. He encourages people to invest in mutual funds via SIP. He also feels that advisors should target young professionals through Facebook. “In my view, advisors should leverage the social media platform to target young professionals and inculcate in them the discipline of regular investment—to start through SIP. One can use videos related to SIP to drive home the message.”
- Writing books: Pravin has also authored two books with Kavita Devi: Plan your Wealth and Create your Wealth. Both books simplify complex financial terms for investors. “Both books helped our visibility, and helped us to gain popularity. In both the books, we tried to make personal finance interesting by linking it to cricket. We have circulated these books among our clients. Having received an overwhelming response to our first two books, we recently wrote a third one book on personal finance called, A Journey towards Financial Freedom,” says Pravin.
All these client acquisition activities have served the business well. This year has been phenomenal for Pravin as he crossed the Rs. 1 crore SIP book.
Balanced funds – Mr. Reliable like Rahul Dravid
A cricket team of 11 players has a perfect mix of batsmen, bowlers and all-rounders. Every player has his own specialization. Similarly, a mutual fund portfolio too, should have the right mix of asset classes like debt and equity, which balanced funds provide. These aim to capture the best of both worlds—the return potential of equities and safety of debt. Balanced funds can deliver stable returns over a long run, beat inflation and act as a tool for wealth creation.
Using the cricket analogy Pravin explains, “For a batsman to score a century, there has to be a generous mix of fours and sixes along with intelligent ones and twos. Here, ones and twos represent debt and fours and sixes are the equity part. A batsman has to stay in pitch for a while to score a century. Similarly, to benefit from dual advantages of balanced funds, i.e., automatic rebalancing and tax benefits, an investor needs to stay put for the long term.” Pravin’s unique investment logic has helped his clients emerge victorious in the game of financial management.
Creating a team of winners
In this game of financial cricket Pravin is clearly the Man of the Match, a reputation he gained for his fund picking ability. The funds he recommended have delivered attractive returns. Pravin believes his systematic approach to picking winners helped his clients’ wealth grow. Every fund has to pass a test before making its way to his recommendation list.
Here are the key aspects that Pravin looks for before selecting a fund for his clients:
- Portfolio: Just as quality players can help a cricket team win the match, quality stocks in a mutual fund portfolio generate alpha over the long term, Pravin believes. “If a fund house has clearly defined investment process and picks up quality stocks, chances of delivering consistent performance maximize,” he says. Pravin checks if the stocks in the portfolio have the potential to deliver earnings over the year. He goes through each stock and does thorough research to understand why a fund manager has picked a particular stock. Once he is convinced with the quality of the portfolio, the fund makes it to his recommendation list.
- Past performance: Pravin first looks at the consistency of a fund during bear and bull phases. He then analyses the future prospects of the fund based on the performance of the fund manager in both the phases.
- Sixer approach: Pravin is of the opinion that it is his obligation to protect the capital of the client while generating positive absolute returns. He therefore uses a unique six-step process to select funds for his clients.
- Step 1: Get acquainted with the client’s background, family goals and the family’s vision of their financial future
- Step 2: Compute the net worth and cash inflows, collating financial and investment information
- Step 3: Do a suitability assessment of the current asset allocation
- Step 4: Develop a customised financial plan with the details and an investment and risk management strategy
- Step 5: Implement the financial plan after receiving the consent of the client and making him/her aware of the risks involved
- Step 6: Monitor, review and rebalance the plan on an ongoing basis
Pravin creates customised reports for each client based on their goals, investment, capital gain, retirement plan, and so on.
Investment mantras derived from cricket
Here are a few mantras Pravin wants to share with advisors:
- Know your game right: An advisor should constantly update his/her knowledge on various financial products. Just as there are different formats in cricket, investing has time frames. In addition, these have to be evaluated critically for deployment of strategies, tactics and investment products.
- Patience is the best reward: Like a good batsman, advisors too should have patience and perseverance to succeed in the financial advisory business. In mutual funds, investors do not get quick returns. You need to encourage them to stay put for the long term.
- Play tight, invest right: Investment in mutual funds involves amount of risk. The advisor should recommend funds that have quality stocks and follow a focused strategy.
Pravin’s journey is an inspiring case study for advisors on how they can make investing interesting and fun for their clients through analogies and storytelling.