imgbd Equity Insights: Advisor Perspectives

Champion IFA shares 6 step process to crack the toughest client segment

Ashish and Manish Goel, Vista Wealth, Delhi

In a nutshell

Vista Wealth, one of the largest and rapidly growing retail distribution businesses in North India, is also a great incubator of practice management and client engagement ideas and processes. We therefore turned to Ashish and Manish to share with us how they build equity conviction in one of the most challenging segments - conservative, FD oriented middle aged savers. Read on as they share a step by step guide on how they achieve this, not just by establishing the need, but by a well-crafted process to build these savers' equity conviction.

Among retail investors, the younger set is a lot easier to convince about equity investments. Probably the most challenging set of retail investors to convince about equity are also the ones who need equity the most - the segment of middle-aged conservative investors, who have got comfortable with FDs and RDs and the perceived safety of these deposits.

At Vista Wealth, we adopt a 6 step calibrated process to get such investors into equity funds. The first two steps tackle the need aspect and the next 4 tackle the conviction aspect. It has been our experience that tackling the need alone is not enough for this set of investors. You have to spend a lot more time and effort in helping them build conviction, because it is finally only conviction that helps them remain invested through bouts of market volatility.


  1. Goal planning

  2. Following a goal planning approach is the best way to establish the need for equity investments. As we all know, there are the 3 variables that we have to juggle with - size of goal, the amount of investment and rate of return. Very often, clients find the required rate of return higher than their comfort zone. This is typically where equity should come in, as we all know.

  3. Equity only by a process of elimination

  4. We never suggest equity straight away as a solution - because we know that is not an area of natural comfort. So, we go by a process of elimination. We first look at whether the goal size can be reduced. Then we look at whether more resources can be committed towards the goal. Then we discuss what investors are more comfortable with for multiplying money - real estate. We look realistically at the amount available with them for investing in real estate, their own convictions in buying property at these prices in this market and more often than not, clients come to a conclusion that real estate is not a viable option. When all other options are eliminated to the satisfaction of the client, we then turn to equity. It's important to go through this process, as otherwise clients may sometimes get a feeling that equity is being "hard sold".


  1. Data

  2. Once the attention is firmly on equity, only then we start discussing data. There is of course, lots of data available to show historical returns over the long term, but in our experience, what works best is to show rolling returns charts. That takes away the whole debate on timing of entry and exit. You are able to show that irrespective of when you begin your journey, if you stay invested for the long term, you will get healthy returns - comfortably in the zone or above the zone of the required rate of return for the client's goals. While discussing data, it's important that your own conviction comes through clearly in your body language - in your non-verbal communication. This is the phase where the client is looking to trust you on what you are saying - and a lot depends not just on what you say, but how you say it.

  3. Seminars

  4. Once we share all the data, we never move in immediately to start SIPs. We give the client time to think and reflect. We make it a point to invite him to the next investor education seminar that we conduct, which we do regularly. In these seminars, there is a lot of discussion on equity, and there are many people who participate, ask questions and discuss. When this retail client sees the subject of equity being discussed in a larger gathering, his fears and apprehensions subside and conviction increases. We also encourage these clients to come to the seminar with their key influencer. It may be the spouse in most cases or a friend or relative in other cases. Most investors have one key influencer in their investment decisions - you need to ensure that the influencer is not negatively biased on equity, especially when the negative bias comes only due to lack of information.

  5. Stories

  6. Sales are closed on stories, not on data. Once the ground work has been properly established, we talk "stories" that help clients relate better to what equity investing is all about. There are many popular stories - like comparing equity investment with planting a mango sapling. You need to nurture it for the first 5-7 years without expecting anything from it. Do this well, and the mango tree will provide you bountiful fruits for the next 25-30 years. If you get hasty and start expecting fruits in years 2 and 3, you will get nothing but disappointment. Stories like this help clients understand what to expect from equity and how to get the best results from equity. Stories also help build conviction - because finally what the client will remember and take away is the mango tree example and not the figures in the rolling return chart. Its important to show the data, but its equally important to back it up with a story that sells.

  7. Start small

  8. This is a critical step. After doing all the hard work, and getting the client convinced, it is tough for any salesperson to do this, but we always insist on starting small. We start with a smaller SIP than what the goal requires. It is important for clients to be as comfortable with real investments in equity as they are with our presentation on equity. Once we begin the journey in a modest way, we work with the client to gradually increase his SIP amounts to the required level, based on his comfort.

Retention in times of volatility

When we go through this 6 step process, we find that even conservative middle aged savers with a history of FD investing get comfortable with investing in equity funds, the right way. This conviction helps them remain invested through bouts of market volatility. Not everyone is immune to volatility - some do get nervous and come back to us and ask us whether they should exit. Apart from reviewing the documentation that we signed earlier, where risk profile, time horizon etc are clearly spelt out and signed, we remind them of the stories that we discussed and the need for patience. Some get convinced, some are still anxious. For those who remain anxious, we simply suggest, "Why don't you let the SIP run for another year and see for yourself. If you are still uncomfortable, we can always stop it and pull your money out." This is a simple strategy to "buy time", and it works most often. Clients remain committed to their equity SIPs, may not be because they fully bought the long term story, but because they see sense in the "let's put this on our watch list" strategy. This is also one way of "doing something" about your underperforming investment, which is what they really want to do. There is a need to "take action", and that action can be "put it on watch list" rather than "exit".

Challenging, yet rewarding segment

Selling equity funds to not-so-young conservative savers is a challenge, but the rewards of going through this structured process are high for both - client and us. From a business point of view, the SIP amounts of these clients tend to be much larger than young savers because their income levels are much higher. We also get to work on moving the FD portfolio into suitable mutual funds over time, thus making the relationship remunerative for us. And what we have also seen is that it is this segment of clients who tend to give us the maximum referrals, because they know that we have made a difference in their ability to meet their own financial goals.

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