MasterMind : Advisor Insights
4 client interactions that showcase investor connect
Team Omega, Omega Financial, Bhilai

MasterMind is a joint initiative between Sundaram Mutual and Wealth Forum, in which we offer insights into how you can become a more effective advisor to your clients, by understanding them better, understanding how they think, understanding how they take financial decisions. This gateway into your clients' minds we believe will help you relate better to them, communicate more effectively with them and thus serve them better. Mastering your client's mind is your gateway to becoming a more successful advisor. Its not for nothing that they say, "Its all in the mind!"

In this article of the Advisor Insights series within MasterMind, Ziauddin Khan and his partners at Omega Financial, Bhilai, share 4 incidents of client interactions which showcase what MasterMind is all about - communicating with clients in a manner they can relate to - and thus helping them take appropriate decisions.


Team Omega : from left to right : Yogendra Singh, Krishna Gupta, Ziauddin Khan & Jay Sonchhatra

Selling an equity fund to a businessman

Businessmen are normally very difficult prospects for equity funds. One such businessman client of ours raised an objection that most advisors would have come across : "Why should I invest in equity funds? My business gives me 20% plus return". Rather than discussing the merits of an equity fund, we decided to take a different approach. We asked him, "Sir, would you be interested in investing in the business of a company that has generated 30% plus growth in profits every year for the last 10 years?" That got him interested. We continued, "And sir, this company is run by one of the best managements in the country". He was now quite interested. We went on to tell him that the name of this company is HDFC Bank. Then, in a similar manner, we spelt out the profit growth track record and management qualities of HUL and ITC. By now, he was fully engaged in the conversation. Then we went on to describe that we can either buy each of these companies in a portfolio for him and track them separately or we can recommend a large cap equity fund that invests only in the top 50 companies of the country, with sound track records of profit growth, backed by high quality managements. We got him convinced to buy a large cap fund, because he now appreciated the quality of businesses he was buying into. Our learning was that a businessman understands businesses - not equity markets. If we talk about underlying businesses, there is far better chance of such investors relating to an equity fund.

Selling an equity fund to an FD investor

We got chatting one day with a prospect who only invested in fixed deposits, and that too only SBI. He considered everything else too risky. At the outset of the meeting itself, we figured out that there is no easy way to get this person convinced about equity funds. We kept aside our sales pitch and started talking about his son, who was due to complete his engineering degree later in the same year. He was obviously proud of his son's academic progress. We asked him what his son planned to do after graduation. We asked him, "Sir, if your son gets a job at L&T, will you send him?" "Why not", he replied, "L&T is a great company". Then we simply asked him, "Sir, if you don't want to risk your money on L&T, why are you risking your son's career in the same company?" He understood immediately. Then we started explaining the track records of growth in profits of India's best companies and the qualities of their managements. Today, this client not only has invested in equity funds through us, but is a great source of referrals for us, as he unhesitatingly recommends us to his friends.

Charging Fees

A prospect was ready to start using our advisory services, but was not agreeable to paying us our fees. He said, "I get doorstep service from other distributors, they don't charge fees. Why should I pay you a fee?" We narrated a story from the 1984 film Aaj Ki Awaaz. In the film, Raj Babbar is an accomplished mechanic, and the son of a very poor man. A businessman's factory machine stopped working and all his engineers could not set it right. The poor man offered the services of his son. The businessman was skeptical, but went ahead as he had no other options. Raj Babbar inspected the machine quietly for a few minutes, then picked up a hammer and hit one spot only once. The machine started working again. The businessman was overjoyed. But, when Raj Babbar asked for a 100 rupee fee (which in those days was a lot of money), the businessman baulked at the amount. Why pay so much just for striking a hammer once? Raj Babbar explained that it was not the act of striking the hammer once which justified the fee, it was knowing where to strike it that made the difference.

In much the same way, we told this prospect that we don't charge fees for service and for door-delivery of forms and statements. Our fee is for advice. At the end of the day, while service is important, our core function is to help you reach your financial goals and that is where our advice comes in. Reaching financial goals happens with good quality advice, not with door delivery of account statements and forms. He understood and agreed to commence business with us, and pay us our fees.

Connecting with women investors

Our insights on connecting with women investors came from an unfortunate incident in the life of one of our clients. We got a call from a lady who sounded very anxious. Her husband had died 5 years ago and she had been running from pillar to post to track down all his investments. Several people had offered to do this in the past, she had paid fees to many of them, but she was still clueless and unable to make a comprehensive list and encash all these investments. We promised to help and we told her we will not charge anything for this. It took us a lot of time, but we finally managed to painstakingly put the entire portfolio together. There were numerous unclaimed dividends, unclaimed maturities, unclaimed policies. We went through all the paper work and got her all the money that was due to her.

This experience gave us insights into the 2 basic issues that many wives face as far as family investments are concerned, especially when it is the male member who takes all financial decisions :

  1. Non-disclosure of all investments and insurance policies by husband to the wife

  2. Lack of awareness among many wives about products and processes

With the support of HDFC AMC and DSP Blackrock, we began our Women Investor Awareness Programs. We invited only women - no males were permitted. Our first session saw 138 women participating. It was a unique experience to see husbands coming to the hotel lobby to drop their wives for the session and then waiting in the lobby for their wives to come out after the session. The session was a great hit - we only spoke about essentials of products and processes that women needed to be aware of. We urged them to get more involved in understanding their family portfolios. We urged them to familiarize themselves with managing the paperwork independently. This was so well received by them, that we got demands for many more sessions on a number of allied topics. This has become a regular initiative for us now - one that empowers women by communicating what they need to know and one that is giving us good new business leads as well.

All content in MasterMind is created by Wealth Forum and should not be construed as an opinion of Sundaram Mutual Fund.

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