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Tarakki Champions 2016: IFA West Non Metros
Think Consultants, Nagpur
(Team Think (Ranjit Dani, Amit Dani, Parag Paranjpe, Mandar Joshi) receiving their Tarakki Champions award from Team ICICI Pru MF (Nimesh Shah, Raghav Iyengar, Amar Shah)
Consider this set of numbers:
Who would say that this could ever be possible in any city outside the T-15 world? Think Consultants has achieved thisstupendous growth operating from the B-15 city of Nagpur, serving only Nagpur based investors, and without the help of a corporate/institutional arm to boost AuM. We spoke with the ever modest, ever self-effacing Ranjit Dani to understand the secret of this astounding success of Think Consultants.And as we spoke, we hear Think has crossed the Rs.600 cr mark last month! Here is Ranjit's perspective on what drives Think's Tarakki.
I honestly can't share any specific strategy that we devised and executed in the last few years to try and drive growth - we have never really been sales focused, we have never run any sales or marketing initiatives. So there are really no insights I can share on this score. I am actually looking at this set of 5 year numbers for the first time myself - we just don't track ourselves in this manner.
Nagpur's ponzi bust delivered painful lessons to investors
One of the external factors that has perhaps helped mutual funds as a category and financial planning as a profession in Nagpur in recent years is that 3 to 4 large ponzi schemes which were very popular in Nagpur were busted in 2013-14, and the masterminds behind them went to jail. Investors understood, unfortunately the hard way, the benefits of investing in well regulated products like mutual funds and appreciated a holistic financial planning proposition which would guide their financial decisions.
Secret of our success: 10,000 hours of deliberate practice!
If I were to look within our firm, I think the biggest driver of success comes from truly embracing the wisdom of Malcolm Gladwell's "Outliers". He says that success is not always a function of innate genius. 10,000 hours of deliberate practice can make anyone a master of his craft.
We started Think Consultants in 2002. We diligently practiced client centric financial planning right from the start and continue to do this, 15 years after we began - there is really no change in our core proposition to our clients. Maybe, as we kept practicing, we became good at what we were trying to do! Maybe our success is testimony that you don't really need genius to succeed - you need 10,000 hours or more of deliberate, diligent practice.
Trust is our most precious asset
Talking about the growth spurt in recent years, I think what has helped us - more than just acceptance of mutual funds as a category and financial planning as a process - is the approach we bring towards our client engagement. We have grown only through referrals, we have never gone out on sales and marketing calls. Clients refer because they know that we always act only in their best interests and we never ever put our interests ahead of theirs. We have for example, over the years, got clients to pay off over Rs.100 crores of loans - because we thought that was the right thing for our clients to do. That it meant 100 crores of lower AuM really means nothing to us. Clients trust that we will never do the wrong thing for them - and that trust is our most precious asset.
High wallet share - from day one
When we get referrals from clients who trust us, we find that these prospects open up to us from the beginning. We don't really go through the "testing the waters" phase where they start small with us, guage us and then increase their portfolios with us. From day one, we get into a full financial planning proposition, we get as close to 100% of wallet share as we can, and we start off with holistic solutions rather than piecemeal portfolios. That obviously gets the AuM to grow at a healthy pace.
Accrual funds have been a key growth contributor
From a product perspective, what has certainly aided our growth is our confidence in accrual funds and the manner in which they have justified our faith in them. When we sign up new clients, we often find ourselves allocating fairly sizeable amounts to accrual funds as superior alternatives to traditional fixed income products that feature in most client portfolios. These allocations tend to be much larger than equity allocations, as we always take clients up the risk curve in a calibrated manner.
Talking of calibrated equity exposure, the other product category which has really helped us and our investors is dynamic asset allocation funds - which provide a much smoother investment experience due to their disciplined asset allocation - which in turn gives us greater confidence in recommending larger allocations to such funds.
Industry well-wishers
Our growth, in no small measure, is also due to the guidance and interactions we have had over the years with advisors like Bharat Phatak (who is a guru to us), Sanjay Khatri, Deepak Chabbria, Amit Bivalkar and others - from whom we have imbibed many ideas that have helped us strengthen our practice. We have also benefited immensely from the many brainstorming sessions we've had with some AMC personnel, who have many a time either nudged us in the right direction or pointed out weaknesses for us to iron out. The Wealth Forum platform and conferences have been a great resource for us to learn, share and exchange ideas with peers, which I believe has significantly aided our growth.
Our challenges
Talking of challenges, our biggest challenge today is managing growth. We need to hire more people in our back office to continue offering the same level of service that we have been giving, with the same level of responsiveness and diligence that we aim to maintain. It is really a challenge finding people with the right skills as well as the right attitude. Attitude is more important - and that is what is difficult to find. In our team, every member is equally committed to doing the best we can for our clients. Whether it means going that extra mile to ensure that transactions do not miss cut off for any reason whatsoever, to calling up clients who put in redemptions on a Friday and asking them whether they would prefer to execute it on a Monday to earn weekend returns, every action that our team takes puts the client first. Trust in the firm is not built by the actions of the partners alone - a large part comes from the actions of the servicing team. We are fortunate to have a team that has fully embraced our client first spirit - but equally, it is proving to be a big challenge to add people to this team who think and act likewise.
The second challenge - and I am not entirely sure whether it is really a big issue - is that all four of us partners are working in the business, and not on the business. We are busy all the time, meeting clients, discussing and executing their plans. As a result, we rarely sit down to plan for our own firm. We just keep running, doing what we like doing best - which is helping clients achieve their financial goals. Maybe, we don't spend enough time Thinking!
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