Despite the regulatory headwinds, financial advisory is continuing to see new talent entering the fray. It is not only the robo advisers and large players who are eyeing a slice of the growing wealth pie. Morningstar caught up with Abhishek Mehta, who put in his personal savings of Rs 10 lakh to start his advisory practice Investza Capital in April 2017. Within a short span of time, he has built a systematic investment plan, or SIP, book of Rs 50 lakh across 600 clients. Read on to find out how this young turk is rewriting the rules of wealth management.
You are a chartered accountant and CFA charter holder. What inspired you to get into financial advisory?
While I was working in my previous organization, I observed that most firms were doing product selling as compared to providing the right advice to clients. Also, I saw a huge gap in financial literacy which inspired me to start my own advisory firm.
Being a newcomer, how difficult is to build your team?
We are currently a team of 20. Most of our team members are college friends or their references. Our team is currently divided into marketing, research, business development and support. We hire a lot of interns from colleges. It’s a win-win for both of us as they become job ready in coming years and we get them at a reasonably less cost.
You have partnered with Prudent as a sub-broker. Why do you think it is beneficial for startup advisers to work as a sub-broker rather than doing direct business with fund houses?
Partnering with national distributors has its advantages, especially for newcomers. We get complete sales and back office support along with the latest technology platform for the company and my clients.
For instance, Prudent has developed a platform called fundzbazar in which client account opening, transaction plus reporting is done seamlessly without any paper work. Thus, our back-office work is taken care of. This helps us to focus on our core work of business development and marketing. So far, we have built assets under advisory of Rs 20 crore.
How much capital did you infuse in your venture?
I had personal savings of Rs 10 lakhs when I left my job. I infused around Rs 5 lakhs in first six months to build the team, technology and the infrastructure. Currently, we are about to break even. We are increasing our team size as our revenues are growing. Our aim is to have a team of 50 people in the next three years.
How did you build a SIP book of Rs 50 lakh in just 1 year?
We are a firm believer that SIP is the best way to generate wealth. From day one, we were only advocating SIPs to clients. We track only two metrics in our company: 1) Number of clients and 2) SIP book. We keep very aggressive targets on the number of clients we acquire every month.
Most advisers today are not able to grow because of two things: 1) Most of their time is occupied in servicing current clients as they have not worked on their processes 2) They don’t try to create a brand of their company and build a high-level committed team. You cannot grow without processes, team, marketing and branding. Concentrating on all these factors have helped us acquire a lot of clients.
How is the conversion ratio in cold calls?
Of the 600 families we contacted, we acquired 20 families from cold calling, which is a success ratio of around 1-2%. But more importantly, we have got 20 clients from this activity and these 20 clients are very big, in terms of volume of business. These 20 clients together account for Rs 15 lakh worth SIP every month.
There is no one marketing activity which is perfect to acquire clients. We have undertaken all kinds of activities so that from every activity we get 5 to 10 new clients. Once our client base reaches a good size, we estimate to get two referral every year from each client if we give them genuine advice and make a change in their financial lives.
What kind of marketing activities did you undertake to acquire clients?
My entire team’s focus has been on marketing and improving our current processes. We have done cold calling, SMS marketing, email marketing, social media marketing, investor awareness workshops, open seminars, facebook live events, video conference, Just Dial and Business Network International, or, BNI.
We get a lot of references because we are a one-stop-shop for all financial needs. We do a lot of activities for current clients to generate maximum references. For instance, we conduct an annual conference, do video marketing, send gifts and greetings to clients on special occasions.
Also, we have worked hard on creating Investza Capital as a brand. We do lot of branding activities. For instance, within one week of starting the company, we had our website, Facebook page, Instagram page, LinkedIn page, Twitter handle, WhatsApp business account, dedicated mobile number for support/service for clients, email id support@investza.in, visiting cards, letter heads, brochure, envelope ready.
What kind of services does your company provide?
We provide four kinds of services: 1) Wealth Creation (Financial planning & Investment planning), 2) Wealth Protection (Term plan, Mediclaim & Critical Illness), 3) Wealth Transmission (Will writing, Power of attorney and letter of guardianship) and 4) Tax planning.
Where do you see your practice in the next three years?
Our first aim is to reach Rs 1 crore SIP book and 1,000 clients. Currently, we are at Rs 50 lakhs SIP across 600 clients. We also wish to reach Rs 100 crore assets under advisory in next four years.
