Saturday School’s Business Brainstorming series brings to youa unique MFD business model pioneered by an industry veteran, Suraj Kaeley. He hasdecided to focus only on one super specialist segment in the MFD practice thathe and his son manage – and has set up what is perhaps the country’s firstRetirement Income Specialist firm. Suraj walked us through the rationale forhis daringly different business model. Joining him with meaningful insights forMFDs was K S Rao, head of ABSL AMC’s IEDD team.
Why target retirement income?
“Ilike to be a dominant player – prefer to be a large fish in a small pond overbeing a small fish in a large pond” – Suraj Kelly
There are four main reasons forchoosing retirement income specifically :
1. Nobody seemed to be cateringto this segment so a gap in the market meant a golden opportunity
2. Asset allocation from highrisk to lower risk funds becomes the priority which makes everyone happy
3. This customer segment isunlikely to keep moving around so the longevity of having a client for 20+years is a clear bonus
4. Weight on fixed income meansstability in revenue inflow for the company
Within the niche of retirementincome, what’s more interesting is the decision to further specialize andtarget senior executives in the private sector only. Here’s why :
1. Targeting entrepreneurs hasproven mostly futile because they love their businesses too much to retire atthe average retirement age
2. Targeting professionals is anuphill battle too because even though they might be mindful of the idea ofretirement, they are usually not in a rush to retire as soon as they hit thebig 60
“By2050, there are going to be 31 crore people over the age of 60 in India. I needonly 200-250 of them to be my clients for my business to do really well –that’s very doable” – Suraj Kelly
Finding your niche – K S Rao
When looking at your business, itis important to refine before thinking of reinventing. Look at your clientroster, identify your relative strengths and play to those. Don’t reinvent yourbrand simply because you can, but take this opportunity to evaluate yourself interms of your goals and value systems to determine what your niche should be.When trying to find your niche and figuring out your strengths, it is importantto also be mindful of opportunities because identifying gaps in the market iswhat will help grow your business tenfold.
Does focusing on a niche make business sense?
Short answer – yes.
You are able to streamline allyour information and communication to target your specified niche, which makesit more effective versus having open ended communication which doesn’t connectwith anyone specifically, turning your model into a confused mess
“Super-specialisinghelps you get attention in a crowder world” – Suraj Kelly
You are much more likely to getreferred as a specialist in something because it conveys confidence andreliability.
“Yourniche can be determined in any way – be it in customer segments or by services offered”– K S Rao
Inflation proofing both the income and the wealth
Once you find your niche, thenext step is to figure out the one need that customer segment has that theydon’t often talk about. We’ve heard of inflation proofing your income in thatyour client’s corpus should never devalue over time, but what is missed istheir corpus not growing to match inflation over time. For example, a 5crcorpus is conditioned to remain as is over time, but why not grow that 5crcorpus to 20cr over 20 years? Your value-add comes in when you’re able toidentify what a client needs without them spelling it out to you.
A final word
In a competitive world, it isimperative to stand out. Finding your niche by marrying your strengths withmarket opportunities will help grow your business much bigger than broadeningyour vision and trying to cater to everyone.