'My effort now is to focus more on the emotions around money'

By Morningstar |  15-10-21 | 

Sanjay Durgan of AbunDanze started his distribution practice close to two decades back. He narrates his journey, learnings and how Morningstar Managed Portfolios has helped him allocate more time to interact with his clients.

Please take us through your advisory practice. When did you start and what inspired you to become a financial planner?

In 2002, I was looking for a change in my profession and while browsing through the net, I got to know about financial planning and the Certified Financial Planner (CFP) certification. Though they had been around for more than 40 years in the USA, over a decade in Australia and a few years in Asia, I could not find much information about this profession and certification in India. The Wall Street Journal described the certification as the ‘gold standard’ in financial planning and one of the most prestigious and preferred qualifications globally. This holistic approach to personal finance got me hooked and I saw this as a great option to reboot my career. In 2003, Bajaj Capital advertised about the certification and I immediately enrolled in the program - amongst the first/earliest batch of CFP enrolees in India.

At that time, the Indian economy was going through one of its weakest phases, and I realized that investments, in general, were a haphazard and random process, with no structure and not many options available. The mutual fund industry was very nascent, private insurance companies had only recently made an entry in India and real estate was the default option for investments. Financial planning felt like a whiff of fresh air in all this randomness.

How many clients you are catering to currently and what services do you offer? 

Around 300+. Whether it is protecting the downside or growing your wealth, we focus on providing a positive investment experience, built around the needs of each individual client. The holistic approach to looking at wealth and investment funds is supported by our partnerships with external managers and technology platforms. Partnerships that give us the flexibility to offer a range of execution and distribution services both for onshore and offshore investments. Be it Mutual Funds, Equities, Fixed Income, Structured products, Alternatives, Global investing / Liberalized Remittance Scheme (LRS).

What kind of client base do you cater to?

It’s a combination of retail, institutional and HNI. Since 100% of all new client acquisitions are from references, we do not have any sales and business development team. We work on various platforms – making it seamless to onboard new clients.

What benefits have you observed by investing your client’s money in Morningstar Managed Portfolios? 

By providing thoughtful, risk-aware growth, these portfolios are designed to provide the foundation of our client’s investing experience. Designed with Investor’s Goals in mind “Morningstar Managed Portfolios” are now becoming part of the core portfolios for our investors. The portfolios help us leverage on Morningstar’s extensive research and asset-allocation expertise to build a sophisticated framework of active and passive investment styles.

Working in collaboration with Morningstar has helped our clients get the best of both worlds. A solution that taps into our collective strengths. We know the needs of our clients and how to build a plan for them and Morningstar supports it with their investment knowledge and professional management experience.

Typically, how much time were you spending in research and portfolio review/rebalancing before you started outsourcing investment management to Morningstar Managed Portfolios?

That would be a major chunk of our time. With greater bandwidth available to us we are now free to spend more time on client interactions and focus on business development and other activities for business growth. I realised our greatest strength was in client interactions and that is where I should be spending 80% of my time. The engagement with Morningstar could not have been more opportune.

After outsourcing investment management, how much time are you able to allocate to client-facing and business development activities? 

Much more time than before. However, the business development activities are still work-in-progress as the engagement with Morningstar has helped us to relook our business model and how we should be nimble and swift-footed in our approach to the whole process of money management. We believe that this whole journey can be greatly simplified and the only thing an investor needs to do is manage himself, his emotions, and his behaviour. If he could get this part right, of being able to manage himself, the growth part automatically takes care of itself. More so if you have a partner like Morningstar with you. Our effort now is to focus more on the emotions around money, the human side of investing. For that, we are building on the 'Insightful, Impatful, Investing' framework for meaningful discussions with our investors.

How has been the feedback from clients about Morningstar Managed Portfolios? 

The feedback has been very positive and in fact, we have been getting additional investments on a regular basis.

What trends do you foresee in the wealth management/MF distribution/advisory space in the days to come and how are you planning to grow your business? 

There will be multiple trends that will shape our industry in the days to come. “Responsible Investing” being one of them. As investors become more aware and conscious about their investment decisions, I see the birth of “Renaissance Investors” - who would shape the investment world in every possible way one can think of. New perspectives are being developed where risk and return will take on a different meaning. Investors who will be sensitive to the impact their investments will have on the Environment, the Society at large and the Governance standards of the companies they invest into. And this is also the necessity of current times, considering all the discussions around climate change and the havoc mankind has created in the name of development.  I, therefore, see a great shift towards “Responsible Investing” and the wealth management/ MF distribution getting more deeply engaged in bringing about this change in their relationship with their investors. Product manufacturers would dish out products to meet the demands of a growing tribe of conscious investors, with innovative product development and structures. A small beginning has already been made with the launch of ESG funds in the mutual fund industry.

As the industry matures, another trend would be the marketing and branding activities that will take centre stage. Go-to-market strategy will be the distinguishing factor and maintaining your “raison d'etre” is the biggest challenge in an increasingly complex world.

With AbunDanze core philosophy of capital preservation and preventing losses our highest priority, I see myself more deeply engaged with my investors. Managing investment behaviour and shaping their financial personality with an involved and constantly evolving framework that shapes our future action plan. A structural framework that will be the foundation of the business and is summarised in our tagline - Insightful, Impactful, Investing.

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