Tarakki Champions

From 40 crs to 1400 crs in just 8 years

Sapient Wealth Advisors, Pune

Tarakki Champion 2016: IFA All India

Sapient Wealth Advisors, Pune

(L-R) Amar Shah (ICICI Pru), Nimesh Shah (ICICI Pru), Janak Shah (Sapient), Raghav Iyengar (ICICI Pru), Amit Bivalkar (Sapient), Rahul Khandekar (Sapient) and Vijay Venkatram (WF)

Click here to know more about the Tarakki Champions Awards 2016

For this, the inaugural piece of Tarakki Champions, we start right from the top - from the firm that won the award of Tarakki Champion - IFA All India: Sapient. To beat every other IFA firm in India on the most rigourous set of business parameters in the industry is truly a remarkable achievement. These parameters include business performance over last 3 financial years at an industry level on:

1. Growth in net sales across all products ex liquid funds over 3 years

2. Growth in live folios over 3 years

3. Growth in live SIPs over 3 years

4. Growth in SIP book over 3 years

A weighted average score across all these parameters is calculated by Wealth Forum to arrive at who the true Tarakki Champions are. And Sapient topped the list, all India.

As is evident from the parameters, Tarakki Champions are those who have demonstrated true all round, sustained growth over the long term. Take a look at these numbers and you will see why Sapient tops the list:

Here are some insights that Amit Bivalkar shared with us on what went into Sapient emerging as such a remarkable distribution and advisory powerhouse across all customer segments.

Amit Bivalkar, Sapient Wealth

When Rahul and I quit our AMC jobs and joined hands with Janak to start Sapient, the AuM that Janak brought into the firm was around Rs.40 crores. Our initial focus was to get some big wins on the board to help build scale. We leveraged our respective corporate relationships initially to make inroads into the institutional segment. When direct plans came, we lost a large chunk of our institutional AuM. Over time, we have built that back and a lot more, by focusing on 10 key corporate relationships.

The humble FMP is a big HNI business builder

Alongside the institutional segment, we focused on the HNI segment too from day one. We always saw the HNI segment as our core proposition, and invested heavily from day 1 in building our research, technology and client service propositions to offer top end services to HNIs. We had many friends in Pune who were successful CAs - we approached them for referrals of their clients. This opened the gates for a steady stream of HNI clients. We also focused on senior management teams of the corporate clients we were servicing and some promoter families.

Pune has traditionally been known as a retirees paradise, though that is changing rapidly now. Pune also has the highest concentration of bank branches per capita across any Asian city - which is perhaps consistent with the "retirees paradise" tag. We aggressively targeted these bank deposit heavy retired HNIs and offered them 3 year tax efficient FMPs. We earned next to nothing on the FMPs, the money was locked up for 3 years - but it was the right thing to do for such investors. Our focus on FMPs has continued - today we have over Rs.200 crores in FMPs - perhaps the largest FMP book among independent firms. What these FMPs did is it enabled us to commence a relationship with these investors, build rapport and comfort. As these 3 year FMPs matured, typically Rs.100 would have grown to Rs. 125-130. The appreciation went into equity funds, the principal into short term bond funds. This strategy helped us grow our equity book considerably. Many distributors stay away from FMPs because they are unremunerative. But, if you take a long view as we did, they are great solutions to make inroads into safety conscious HNI portfolios which are typically bank deposit oriented.

We also focused, with our CA friends, in executing 54EC tax saving bond investments for their clients who had sold property. Again, very little net retained income for us, but a foothold into these investor relationships. We then focused on building these relationships over the next 3 years, and gaining their trust, confidence and comfort to increase our wallet share beyond the initial 54EC bond.

Automated referrals drive business growth

One of the ways in which we gave comfort to our HNI clients was to ensure that we are far ahead of the curve on customer convenience. We invested in technology from day 1 - in 2010, we were among the first few in the industry to offer clients online portfolio access which was quickly followed up with a mobile app. In our portfolio viewer, we built a referral screen when clients log out. When a client sees his portfolio returns, is satisfied with the way we are managing his money and is preparing for logging out, a screen pops up requesting him to refer a friend to us. Very often they happily oblige - which then opens doors for us. Many of our referrals over the years have come from this simple automated solution.

Over the years, we have constantly enhanced our tech platform to offer more and more convenience. We have our own CRM solution that enables us to serve clients much better. We have e-locker facilities where all client documentation is stored electronically and can be accessed by the client anytime, anywhere. We have created our own social media platform for our clients to exclusively share and exchange ideas, queries, suggestions etc among themselves.

Advantage of being a mutual fund specialist

One thing that helps differentiate us is that we are known as "mutual fund specialists". We don't offer insurance, no direct equity - our only focus is mutual funds and we devote our energies to becoming experts in all aspects of mutual funds. People appreciate our focus and the effort we put into developing and enhancing expertise in our chosen vertical. So, while they may go to others for other financial needs, they come to only us for mutual funds.

When seeking referrals, we try to go beyond the normal. For example, when we sought referrals from one of our doctor clients, we organised a couple of events where he called his other doctor friends - it was exclusively only for doctors. They appreciated the events, we interacted with them, we got around 40% conversion in the following months.

Huge opportunity in the 1-5 cr segment

We will shortly be opening an exclusive Wealth centre in Pune, which will cater only to HNI clients. This market segment is huge and is growing rapidly. Post demonetization, our HNI business has grown sharply - substantial amounts of money have come into the banking system now and are looking for sensible investment avenues. Our belief is that the Rs.1 cr - 5 cr segment is underserved and represents a huge opportunity. This segment is typically not targeted by top end private wealth firms, and is served therefore by mass-affluent propositions of banks with their usual product push approach.

Investing in the retail business

About 4 years ago, we began investing seriously in developing our retail business. This is a vertical that Rahul leads. We undertook a number of initiatives to build awareness about Sapient in the retail world. We were regular contributors for 3 years in a well respected Marathi magazine, which helped popularize us. We did 3 IAPs with Sakaal - the leading local newspaper, which again had a good impact in terms of awareness building. We supplement these ongoing initiatives with highly focused, aggressive tactical programs, which get us good bursts of volume. We partnered with Axis when they launched their Children's Fund and created a 360 degree high impact campaign in Pune across print media, roadshows, hoardings, on ground activities, videos promoted through social media etc to achieve traction. We did a lot of data mining on our existing client base to target specific clients for this fund. We mobilized a large amount of SIPs - all of them long term (6-12 year tenure), all of them with an initial lock-in that clients opted for. Similarly, last tax season, we partnered with Mahindra MF and created a very different, yet highly visible campaign by putting our messages on a large number of autorichshaw back-covers. As these autos roamed around the city, our message was spread far and wide. We are also very active in social media. Our FB posts are never forwards -we take the effort of collecting interesting anecdotes which we then post on our social media platforms. These are widely appreciated because they are different. Retail is very different from the HNI space - and you have to run this business very differently. In our firm, the clear demarcation of roles between Janak, Rahul and I, help us give appropriate focus to each vertical and run it to the best of our respective abilities.

Robust client service processes free up time for business development

To serve our HNI clients better, we introduced the service RM concept, which is working very well (read more about it here). We have clearly segregated fulfilment from operations - one is client facing the other is manufacturer facing. A couple of years ago, we hired the then head of CAMS operations unit in Pune to head our operations team. That move helped significantly as we now have a resident expert who can guide the team correctly and troubleshoot effectively when required. Maintaining a sharp focus on the service aspect and making it independent, has enabled the 3 of us to focus our attention on business development. Likewise, continued investment in technology has helped us scale up without getting bogged down by paperwork.

Channel partners is another exciting growth avenue

Our investment in technology and a sound service delivery model has enabled us to open up another growth vertical - which is channel partners. We now have 8 professionals - most of whom have prior wealth experience - who quit their wealth jobs and have become entrepreneurs by signing up as our channel partners. They get a readymade end to end platform which is best in class, and can focus their attention on developing their business and advising their clients. We believe this model will grow for us alongside our own organic growth.

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