Think BIG : Think Retail Debt
Cash Flow Champion

Managing a client's portfolio is not just about generating an adequate return. Its about making sure that the corpus invested comfortably provides for all the cash flow requirements of your client at various stages in his life. Your job as an advisor is to plan your client's cash flow requirements and organise the portfolio in a manner that meets these requirements.

Monthly Income Plans (MIPs) are a versatile set of mutual fund products that help you become a cash flow champion. The relatively low exposure to equity ensures low volatility, at the same time, offering your client a limited upside from long term equity investing, while keeping most of the money in accrual based bond investing strategies. MIPs offer your clients the opportunity over the long term to not just stay in line with inflation, but also create modest wealth. How you use these products effectively, is what sets you apart as an advisor.

For investors who are approaching retirement (less than 5 years away from retirement), you would want to allocate increasing amounts of their accumulated portfolios into MIPs and lower amounts in equity funds, as income requirements immediately after retirement will increase substantially.

For investors who have retired, you may want to continue keeping the corpus invested in MIPs rather than move the money into deposits, and set up comfortable Systematic Withdrawal Plans (SWPs) from these MIPs, to ensure a steady cash flow on a monthly basis, even as the corpus continues to create modest wealth in the long term, thanks to a mix of inflation busting bond investing strategies and wealth creating equity investing strategies.

For investors planning on expensive overseas education for their children, you may again think of MIPs during the accumulation stage as well as SWPs on a monthly/quarterly basis - as needed by the fee structures - to ensure sufficient cash flows to meet these large expenses

For clients who are transitioning between jobs or who are setting up entrepreneurial ventures after a successful corporate career, you may consider moving a large part of their corpus into MIPs and set up monthly SWPs to ensure that monthly home expenses are taken care of, during the gestation period.

The list is endless - the possibilities are infinite. As an advisor, you always will aspire to get your cautious clients to become a little more comfortable with a limited exposure to equities in their portfolios, in a bid to create modest wealth for them, over time. MIPs are geared to do exactly this. But, the key to getting clients comfortable with an MIP investing strategy, in many cases, is to first tackle the cash flow requirements of your clients - and give them the confidence that you will manage their cash flows without hiccups. Becoming a cash flow champion is thus key to getting much larger wallet shares from cautious and conservative investors.

Think innovatively on meeting cash flow requirements at various stages of your clients lives, without sacrificing on your wealth protection and wealth creation objectives. Think of how much more money your clients will happily give you to manage, if you gain their confidence on meeting all their cash flow requirements, when they need it most. Become a cash flow champion. Think BIG. Think Retail Debt.

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