Advisor Speak 10th April 2014
Follow these 4 steps and nothing can go wrong for us
Tarun Birani, TBNG Capital Advisors, Mumbai

imgbd 35 year old Tarun Birani has seen a full market cycle as an advisor over the last 10 years. He has steadily built up his advisory practice to a position today where he serves over 200 families and advises on assets of around Rs.70 crores. His mantra for success is simple, yet is practised only by few : (1) Take on only those clients who will value your advice and see merit in financial planning, and say no to all others, (2) Align expectations upfront, before you take on the business, (3) Meticulously stick to "Plan-Execute-Review" model of financial planning and (4) Engage with every client at least 4 times every year. Tarun confidently asserts that if each advisor simply follows these 4 steps scrupulously, no market volatility or regulatory change can do any harm to your business and your client relationships.

WF : Why did you decide to leave a job in a large distribution firm and set up your own firm back in 2003?

Tarun : In my MBA days during my training stints at IDBI and IL&FS I used to work in treasury department for debt markets as well as on corporate restructuring. I developed keen interest in capital markets and wanted to make a career in the same. During my stint at the distribution firm I realised how badly this industry is currently being run with high focus on product distribution rather than advisory. I wanted to create something where firm is run as financial doctor practice with high focus on goal identification and a high focus on advisory practice.

On a lighter note being Marwari and part of business family so business is in my blood and always wanted to do something of my own since my MBA days.

WF : What was the business model you had in mind when you set up TBNG over 10 years ago? How has that business model changed and evolved in these 10 years?

Tarun : I was very clear to focus on high quality advisory services with high engagement levels as a clear cut value proposition. As a process we have set in minimum 4 engagements with clients in a year apart for engagements in special conditions of market.

Business model has changed considerably as earlier being a start up we were not choosy about our clients. Over time we realised 'Small is beautiful '.Now we are very selective about our clients as we look for long term strategic intent as an important trait before taking any client on board with us. It's not about maximising revenue but giving our clients exceptional service i.e 'First Class ' compared to economy class environment.

WF : Looking back, what were some events / circumstances you faced in the initial years which you had not foreseen? How did you tackle them?

Tarun : In terms of events I would say 2008 Lehman crisis was a year of self introspection where every day volatility was very disturbing and client's confidence need to be boosted. We tried every bit to engage clients more to understand their concerns and tried sharing our wisdom.

From the start I always wanted to do things where I have a control. Never wanted to do things where clients tell us what are we expected to do. This helped us being proactive rather than being reactive.

WF : What have been some of the defining moments of TBNG's 10 year journey?

Tarun : In terms of defining moments I would say retaining most of our clients from inception is a very special feeling. We realised trust is an earned thing and it helped us in getting some significant referrals from our existing clients. Apart from that it is a nice feeling to see clients reaching their financial goals.

WF : What is the customer proposition you offer today? Who are your target clients? How large is the business in terms of client base and AuM?

Tarun : Our customer proposition is very clear with "PLAN-EXECUTE-REVIEW being our mantra. I realised this in my last 10 year journey at TBNG as a financial advisor if we are giving equal attention to above 3 tenets then nothing can go wrong for us. As a proposition we start our relationship with realistic expectation and if this is set right then relationship will go long. It is very easy to set unrealistic return expectation but if at the start of relationship that is set right then delight level in relationship will be high. We have seen it in our practice that if we stay true to above three points then irrespective of market headwinds or competition, client will always remain loyal to you. Also we have observed that like is the case with doctors, clients don't like to change their financial advisors and if focus is on keeping the process right then nothing can go wrong in this business. For example in the planning and execution stage let's say any investment identified does not work as per expectation then a strong review process can help in identifying the gap and appropriate solution can be given proactively rather than waiting for it to become a problem.

Our target audience is anyone looking at long term wealth creation and strategic intent. It could be individual families, corporate and NRI. We have more than 200 relationships and would be managing approx 70 crore of assets under advice.

WF : How has been your experience with charging fees for advice? What have been some of the challenges you faced and how have you tackled them?

Tarun : Our experience with charging fees has been very positive. Once value proposition of 'PLAN-EXECUTE-REVIEW' is clearly explained to the client, then the client looks forward to relationship in a very positive manner. I realised that proposition of financial doctor needs to be stressed as trust and seriousness comes automatically after that.

WF : How have customer expectations from advisors changed over these last 10 years? What are the most important aspects that you see in terms of client expectations today?

Tarun : I don't think customer expectation from financial advisor has changed. My experience is that client is too busy in their existing professional life and needs a trusted advisor who can help in plan, execute and review process.

WF : What is the new "Thinking Man" initiative that you have launched?

Tarun : Thinking Man series is our way of giving back to the society by way of genuine insights on financial management. By guiding people through simple stories on behavioural finance you hope to see people get more educated and hence more aware. Life is not about business and profits only. My endeavour will always be to help people manage their own money independently. However, if they still need me, I will be at their service.

WF : It is often said that building and retaining a team is one of the biggest challenges for IFAs who wish to scale up. What has been your experience on this count?

Tarun : I agree to above observation. There are two ways to look at it : either one functions as an individual or scale up as a professional entity. I have decided early that I want to set up a professional entity with partners who shares common goals. As an individual I feel one cannot handle more than 100 relationship so choice is that either one stops at that mark or develop a team of competent individuals to scale up. We have formed an advisory board with Mr Dharmendra Satpathy, Former Marketing Head, Tata AMC helping us in future strategy.

My experience with team building and retaining has been fairly successful. If focus is on quality of work and respect for everyone then retention is never a challenge. We have six people focussed team working towards common goals. As a boutique set up we can offer better cross functional opportunities and higher learning opportunities for people working with us.

WF : Where do you see TBNG five years from today?

Tarun : My vision for next five years to make it a financial advisory firm with high focus on engagement. We plan to work with more than 1000 Families at multiple locations across the country and globe. We are working towards creating infrastructure for the same.

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