imgbd Wise Advice

4 gems of advice from a retail IFA champion

Hari Kamat, Panjim, Goa

imgbd In his 34 long years in the retail financial advisory profession, Hari Kamat has seen it all. He has survived and emerged stronger after every upheaval that regulations, markets and an ever changing landscape threw at him. His client base has grown every year - through bull and bear markets - to a position today where despite being a single advisor firm, he serves 3900 families, with an AuM of over Rs.400 crores in mutual funds and over 3000 live SIPs.

Hari Kamat shares his wisdom, distilled from his long experience in this profession, on what it takes to build, preserve and grow a retail IFA business in the ever changing world of retail financial intermediation. Read on and imbibe 4 gems of advice from one of our wisest retail IFAs.


Service creates sales opportunities

My experience in the retail world suggests that more than marketing or selling strategies, it is service that creates sales opportunities. Let me explain.

I never go out canvassing for new clients, yet my client base has always grown year on year. Whether in bull markets or even when the market crashed in 2008, my client base has steadily grown, each year. The key is to understand what will get a typical retail client to come to you, no matter where the Sensex is.

I have my office in a central location which lot of people come to frequently for business, shopping etc. That's one convenience. Second and more important convenience is that I help investors out with savings and investment matters where I don't get anything. PPF is the biggest pull factor. Long ago, our commissions stopped, but I continue servicing all PPF accounts of investors. It gives them an opportunity to come to my office. I offer an LIC premium collection service in my office. Income is meagre from this service - but it is one more reason for investors to drop into my office. Post office savings account operations are a big headache with long queues and huge waiting times. I have a man who goes to the post office everyday and gets all work done for investors. Many people find it convenient to drop into my office with their post office withdrawal requirements and other operational requirements. I offer a PAN card processing service - that also brings clients into the office. The idea is to see what are the service requirements for which they need help and willingly go to somebody who will help them. I ensure that we offer all those services very efficiently.

Now the next part: I have adequately staffed my office to ensure that I never get involved in any of the paper work. When clients come in with all these servicing requests, the papers are immediately passed on to my team for processing, leaving me to talk to the client while he is waiting for the servicing issue to be completed. These are my sales opportunities - these are the times I talk to them about their investments, about the need to adopt a goal based approach, about alternatives to small savings schemes and build their confidence in mutual funds and a systematic approach to investing.

Focus on relationships, advice and service

I ensure that we create a conducive environment in our office where clients can discuss freely and seek my advice on any financial matter, sometimes even beyond financial matters. Its not only about mutual funds and SIPs and tax planning. We talk about their plans to buy a house, we talk about their loans and how to manage them, I make sure that the conversations are free flowing. This builds relationships, builds trust and deepens my engagement with these clients. Trust builds over time, but we need to make the effort to win our clients' trust.

There are two principles which I follow when it comes to advice: stay focused on a goal based approach and second, do not flood your clients with information just to impress them. Distill what is needed and customize it to make it relevant to them. I serve almost 4000 families - I understand that each family is unique, with their own circumstances and requirements, and I tailor my advice accordingly.

Service in the retail space is very critical, and I ensure that I equip myself with a good quality team and relevant technology to offer "on-the-spot" service. When clients come for updated account statements, we print them out instantly and hand them over. During tax return filing time, we proactively email or print and send account statements required for these returns. If you are able to complete a service request "on-the-spot", that creates huge satisfaction among retail clients.

Be there for them in troubled times

When clients have a lot of money, there are enough people surrounding them with advice and ideas. The real test of an advisor comes in when they go through troubled times. Times when children have to process insurance claims for a deceased parent, go through transmission cases, follow up consistently for missing records - these are times they need support most, and these are the times when suddenly all the hordes of people around will vanish. I ensure I am there when they need me the most - and that builds relationships that last forever. These relationships have enabled me to build and nurture several intergenerational relationships over the 34 years that I have been in this profession - and that remains one of the most satisfying aspects for me.

Have emotional stamina

The most important element for success in this profession is a quality I will describe as "emotional stamina" - the ability to take setbacks calmly and move ahead. Over the years I have faced numerous challenges which have been brought about by regulatory changes, market changes, and a continuously evolving market landscape. A few of these challenges include:

  1. Reduction of commissions paid on small savings & postal schemes.

  2. Abolition of commissions on PPF.

  3. Abolition of Entry Load on Mutual Fund Schemes, resulting in large scale reduction in earnings

  4. Introduction of direct option in Mutual Funds

  5. Service tax on commissions paid

  6. Periodic market volatility that undermines investor confidence

  7. Deluge of KYC requirements which have no uniformity and frustrate investors

The list will continue - the next one will be distribution through e-commerce sites. Through all of this, one needs to have sufficient emotional stamina to maintain your composure, stick to the basics, keep working on strengthening your relationships and service, and worry less about things you cannot control.

In all of this, what can hurt the most is when a client you tutored all your life, leaves you one day because he found a cheaper option of direct plans and thinks he no longer needs your advice because he has learnt enough from you.

I often think about what goes on in the minds of parents. You bring a child into the world, you nurture him/her, you suffer all difficulties but make sure your child gets the best in this world. But as the child grows up, he becomes a person in his own right. He starts thinking & taking decisions for himself. At that time there might be scenarios which won't please you. But as a mature individual you reconcile with reality & give him that space, to grow on his own even if it means going away from you.

Same is true with a client. Yes, you will come across a client who you have tutored all your life, who decides to move away from you. My advice is do not take this to your heart and feel hurtful, let it go. This emotional maturity is what is needed to for a truly successful advisor.

At the same time, you must also be wise enough to understand what kind of clients need your advice and who you should be prepared to let go. I have seen that the advent of direct plans and technology are influencing HNI investors more than retail investors to go direct. I have lost some HNI clients, but I have more than made up for that with new client acquisition in the retail space. I stay focussed in the customer segment I can serve the best, and I ensure that I keep adding new clients even today, after so many years in this profession. I remain convinced that there are far many more people out there who need a good advisor than the number of people who want to move away from a good advisor.

Develop your emotional stamina, stay focused on serving your clients well and keep adding new clients - you will succeed, no matter how the environment keeps changing.


Content is prepared by Wealth Forum and should not be construed as an opinion of HDFC Mutual Fund.

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