imgbd Tarakki Champions

Rich insights from Mumbai's champion IFA

Hemant Rustagi, WiseInvest Advisors, Mumbai

Tarakki Champions 2016: IFA - Mumbai

WiseInvest Advisors, Mumbai


(L-R): Amar Shah (I-Pru), Nimesh Shah (I-Pru), Hemant Rustagi (WiseInvest Advisors),
Raghav Iyengar (I-Pru), Vijay Venkatram (WF)

If Raghav Iyengar defines "Tarakki" as "progress through proficiency" (see Essence of Tarakki), one of the finest embodiments of this philosophy is Hemant Rustagi'sWiseInvest Advisors. WiseInvest serves over 10,000 investors from over 3,000 families with a collective AuMin excess of Rs.880 crores (Rs. 800 cr in MFs and the rest in bonds), and does this with a team of 55 people across two offices in Mumbai. What sets WiseInvest apart is not just the size - but the proficiency with which they are managing scale. At the heart of this proficiency are two key components: an investment committee that ensures uniformity of recommendations across the firm and a robust monthly internal audit process conducted by an external CA firm, which highlights deviations from a well laid out operations manual, at an employee and transaction level. Compliance with processes thus gets ingrained into the team and incentives too are impacted by audit comments. Proficiency, as WiseInvest demonstrates is not only about setting up robust processes, but is also about putting effort into ensuring their flawless execution. That's what brings true Tarakki.

Click here to know more about the Tarakki Champions Awards 2016

Must read: The essence of Tarakki(Raghav Iyengar) and Why Tarakki Champions(Amar Shah)

WF: How would you describe your target client segment(s)?

Hemant: Every Indian saver who has not experienced the benefits of market linked investments, is a target client for us. We do not differentiate between retail and HNI. We focus only on individuals, not on corporate investors. 95% of Indian savers are yet to come into the fold of market-linked investment products - that is our simple target segment. Our job is to get them to understand and appreciate the role of mutual funds and market linked investment products and embrace them as vehicles for fulfilling their goals.

Each segment has its pros and cons - HNIs give you volumes, but can be erratic in terms of in and outflows. Retail is a slow build-up, but its sticky assets. We look for a healthy mix of both segments. Any individual who is willing to consider mutual funds as a long term investment vehicle to fulfil his financial goals is a target client for us.

WF: What in your opinion differentiates your proposition in a very competitive market like Mumbai?

Hemant: I can't say about differentiation vs others but one thing that clearly draws clients to us and keeps them with us for long periods of time is the passion and commitment we have towards their goals. This business is not just about knowledge or service - the most critical element is the passion you have to work towards realising your clients' goals. Clients may be at different levels of awareness of investment products - but all of them can clearly figure out whether you are as passionate about their goals as they are, whether you are working in their interest or yours. When you are equally passionate and committed to your clients goals as they are, you will find that you never have to "sell" a product - the conversation is always about finding the right solutions for their needs and goals. Those conversations bring you together, sales pitches build distances.

Second aspect is client empowerment. Our fundamental belief is that it is the client's money and he has every right to be informed about everything he needs or wants to know about his investments - whether at a product level or even service related aspects. We never operate from a fear that if we give too much information, they will go direct. We prepare notes and hand them over to clients on all aspects including processes that we undertake for them. What it does is that it completely empowers them as there is no mystery about anything, and at the same time, it helps them understand all that we do to take care of their money.

WF: What are the biggest challenges you face in scaling up your model and how are you tackling them?

Hemant: Maintaining quality of advice and client servicing is really the biggest challenge when you are scaling up. We are today a team of 55 members and we serve over 10,000 clients of over 3,000 families from two offices in Mumbai. The way we have tried to maintain quality of advice and client servicing through this growth journey is by institutionalizing processes for both and monitoring execution very closely. We have an investments committee which centrally does the due diligence and decides what funds and products to recommend and all recommendations made go through this committee. This ensures that advice is consistent across RMs, across clients and across offices.


We put together our operations manual a few years ago, which stipulates service delivery and operations procedures and standards that every team member is expected to measure up to. We have hired a CA firm to conduct monthly internal audits on our entire operations. They report all deviations from our laid out processes - including TATs missed, processes not followed etc - at a granular level, at a transaction level. Internal audit findings are taken seriously, gaps are addressed proactively, and where necessary, incentives get impacted by adverse audit comments. Everybody in the team understands the importance of following processes and knows that there will be an external check - that anyway acts as a good deterrent.

Deterring deviations is one part - but training is the more important aspect that guides team members towards the right way to do things. We invest a lot in on-the-job training - at all points of time, we actually have perhaps more staff than needed, because some team members are going through an on-the-job training program by accompanying RMs, sitting though decision making discussions, observing processes being implemented etc. Until they are fully conversant with all practical aspects required from their jobs, they don't take on independent responsibilities. This ensures that we minimize mistakes that happen when inexperienced team members learn at the expense of clients.


And finally, we have been focussing on embracing relevant technology to ensure scalability of service delivery. It is simply impossible to even try and continue delivering service the way we used to, as numbers grow. One has to be sensible about this - technology is not really costly - you need to ensure that you get for your firm what you really need.

WF: In what ways have you tweaked your model in the face of advent of direct plans, robo advisors and enhanced commission disclosures?

Hemant: We've really not made any changes in our model, other than progressively adopting technology to deliver service. As far as disclosures are concerned, for several years we have been disclosing our commissions to our clients, so there were no surprises. Yes there were some concerns on disclosure of absolute amounts vs percentages, but there was really no material issue with clients on this front. As long as they continue to have faith in our advice and service, they are happy with the current arrangement.

On direct plans, we lost a handful of clients to direct plans, some of whom have now come back. Clients are realizing that its not so simple - because selecting a fund is only the beginning of your journey and not the destination. During the investment journey, most investors need an experienced hand to hold - which is where we come in.

WF: If you were to look into the future 5 years from now, what do you expect to have changed in your business model / client engagement and what do you think would not have changed at all?

Hemant: I think in the coming years, clients will become more aware and more demanding and we have to continue upskilling ourselves to keep pace with their evolving needs. That is a big change I see coming, and we have to be prepared for it.

As far as business model is concerned, we have an RIA department within our company which is distinct from the execution department. I see us continuing in this manner, unless regulations change and force a full RIA model at some point of time. I believe clients are actually happier with a commission structure that is embedded in the product cost - they have heightened disclosures anyway, so they are adequately informed. What the current system does is to spare them the ordeal of negotiating fees and us the challenges of recovering fees from a wide spread client base every quarter.

Share this article