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I'm a Certified Financial PlannerCM (CFPCM). I hold an MBA in Finance from IFMR (Institute for Financial Management and Research). Apart from the above, I also hold Post Graduate Degrees in Commerce & Corporate Secretary ship (M.Com & MCS).
I'm 42 years old. In my Career spanning for the last 23 years, I've worked for the first 4 years in Accounting and Stock Broking. The next 10 years of my career was in BPO. I founded Wise Wealth Advisors in January 2007 and am practising as a financial advisor since then. This is my 9th year of being an IFA.
My initial years
I began in 2007 like most IFAs do. For the first 3 years (2007 to 2009), I did all the traditional sales initiatives that many do - I set up stalls during tax season in IT companies, I gave presentations in rotary clubs etc. I chased every lead I got, I went to clients offices and homes, I had lengthy discussions on every aspect of the market, and often I would come back empty handed after these efforts. Unlike people who quit banks to set up their IFA practice, I had no clients from my previous job to fall back on, due to my BPO background.
By March 2010, my AuM had reached Rs. 6 crores and my SIP book was Rs. 5 lakhs. I honestly began feeling a little despondent. I was putting in a lot of effort, but business was building up very slowly. The future was not exactly looking rosy at that point of time. Self-doubt was creeping in.
Radical change in strategy in 2010
In 2010, I did some introspection and came to the conclusion that I had to change my strategy completely. Instead of only focusing on working hard, I began thinking of how I can work smartly. I began thinking of different ways to connect with prospects and engage with prospects.
I began sending daily text messages of interesting wealth quotes from great investors like Warren Buffet and Peter Lynch, to all my clients and my prospects. I trawled the net extensively to dig out insightful quotes, beyond the ones we anyway see circulating around. These began to get appreciated and built a daily recall for my firm. I then started sharing interesting articles that I read on successful wealth creation strategies. Even as I was sharing them, I realised that something is missing -the connect was not there, because I was merely forwarding other people's thoughts. I knew I had a reasonably good writing ability, so I began writing my own articles, which I started mailing regularly to my clients and prospects.
Clients liked my articles and some suggested that I start a blog to get wider circulation. I therefore started my own blog. I started getting 4-5 hits a day. In addition to writing articles, I began tracking other blogs and started posting comments on other's blogs, with an auto web link to my own blog. My comments were never just a couple of words of appreciation - rather they were insights I would share to add to what the blogger said or a difference of opinion, where I thought otherwise. People liked my comments and clicked on my link, thus boosting traffic to my blog.
I ensured that I had good quality content on my blog, and I regularly post 3-4 articles per month. My articles focus on long term investing, on SIPs, on the power of compounding, on simple ways to create wealth. No fancy jargon, just simple facts, backed by data. My efforts are always only in one direction: to help investors understand that a simple goal based systematic investment approach, executed without exception, is all that they really need.
Some clients asked me why I was not present in the social media and couple of them suggested Twitter as a good medium; to share what I'm learning and to learn what others are sharing. I got in to Twitter 18 months ago and now have around 2000 followers. Surprisingly getting into Twitter has increased my blog traffic by 4 times. We now have more than 300,000 hits in our blog and is likely to cross half a million by end of this year. (Check out wisewealthadvisors.com)
Along with my SMS and blog strategy that ensured recall for me and my services, I made a radical change in the way I interacted with clients. In 2010, I took up a 200 sq.ft. office. I started getting calls from many prospects who read my blog. I insisted that they visit me in my office for a personal financial counselling session, and that I would charge them Rs.1000 for the initial consultation, after which there will be no further charges. It was a bold move at that time, but I saw that running from one client's office to another, having lengthy conversations and hoping for business, was just pitching me in my clients eyes as yet another agent hoping for some business. By asking those who were interested to come to my office, with a prior appointment, and pay me Rs.1000 for a consultation, I stood apart in the prospect's eyes. I was anyway generating interest through my blog, so only those who were really keen came and met me. The 1000 rupee fee was never designed as a major income stream - it was a way to demonstrate seriousness and professionalism in our interactions. Conversations became sharply focused on client goals and strategies, conversions were very high. I have now gradually upped the fee to Rs.3000 as a one time fee. There are no charges once a prospect becomes a client, as I make it clear to them that I earn a trail commission.
New strategy delivered huge growth
My new strategy has completely changed business trajectory. In my first 3 years, I struggled to reach an AuM of Rs. 6 crores with a SIP book of Rs. 5 lakhs. In the next 5 years (Apr 2010 - Mar 2015), my AuM grew to Rs.95 crores and my SIP book has now crossed Rs. 1 crore per month. I hope to cross the Rs.100 cr AuM mark in the coming 2 months, based on commitments already on hand and my SIP book. I have over 1100 live SIPs and the average is over Rs.9000 per SIP. I don't accept SIPs for less than 10 years, in fact, I don't accept any investments with a horizon less than 5 years. We've never sold NFOs and closed ended funds. We always stress on keeping things simple.
My core client base is 155 families who account for 96% of my AuM. I plan to expand to serve 300 families in the next 5 years, and have set myself an AuM target of Rs. 500 crores by 2020.
Dealing with direct
I am aware that many of my IFA friends are worried about making aggressive expansion plans due to the fear that direct plans will eat into their business. I agree that direct plans are a challenge, and that this challenge will only get bigger with the passage of time. I look at two aspects in this context:
I must chose clients who value advice and who are not naturally inclined towards a DIY strategy. That means not going after young techies, but instead focusing on successful professionals, traders, SMEs - people who don't have the time and inclination to follow a DIY strategy and who are looking for sensible advice. I must go beyond knowledge (market perspectives, fund selection etc) and focus more on helping with behavioural aspects of investing. I have clients who have been with me for years, who are aware of DIY portals and who continue to be with me - only because they saw that when markets turned choppy, I was there to hold their hand, I was there to reassure, I was there to ensure that their SIPs did not stop in panic and I was there to steady the ship when it mattered most. So long as we add value to our clients on the behavioural aspects, we will always remain relevant to them.
I frankly don't know how regulations will pan out in the coming years on revenue models. What I can't control, I don't want to worry too much about. I would rather stay focussed on continuing to serve my existing clients, keep acquiring more clients and keep adding to my AuM. As long as my AuM grows, my income will be stable, even if it doesn't grow in line with AuM due to margin shrinkage. The key is to create a need for your services first, and then acquire more clients, by showcasing how you can address their need. As long as clients need you, there will always be a revenue model that can be worked out. We need to go that extra mile to ensure that we remain relevant to our clients.
All content in Marketing Wiz is created by Wealth Forum and should not be construed as views of Kotak MF.
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In May 2015, Muthukrishnan became the first IFA in Tamil Nadu to achieve a SIP book of Rs. 1 crore, with over 1100 live SIPs at an average of over Rs.9000 per SIP. He joins a national list of less than 25 IFAs who have achieved a SIP book of this size. His AuM has now reached Rs.95 crores, and he has firmly set his sights on scaling Rs.500 cr AuM in the next 5 years.