In this digital world, where everyone is consuming content over social media, Mumbai-based Anup Bhaiya used the landline phone to acquire hundreds of clients.
His firm Money Honey Financial Services has over 50,000 clients with assets under advisory (AUA) of Rs 650 crore in mutual funds and around Rs 1,900 crore in other products. More than 90% of his clients reside in Mumbai and all of them have been acquired over the phone without meeting a single client in person! In fact, many of his clients have built portfolios worth crores without meeting any official from his office.
Anup has been managing retail clients throughout his journey in financial services. He thought replicating the phone banking model would be the most cost-effective way of acquiring clients if he had to serve a large retail clientele. “The business has to be economically viable. Cost is an important factor while dealing with retail clients. The longevity of the business is important. You need to survive before you become successful. Money Honey has not just survived but built a decent asset under advisory in 13 years,” observes Anup.
Anup worked his way to college by selling cloth at Khamgaon in Maharashtra’s Buldana district. His sales career ended prematurely after he started dealing in oilcake, which saddled him with huge debt. He moved to Mumbai in 2000 in search of a job with Rs 900 in his pocket. Anup joined India Infoline when it had just set up its wealth management business in late 1999. In his eight-year stint at the company, Anup gained valuable experience in all verticals of the company.
Not a smooth start
The initial few years of his entrepreneurial journey were quite bumpy. He started his business in May 2008 and the global financial crisis hit markets around the world after six months. “The Indian market was in a correction mode since January 2008 but there were no clear signs of any imminent threat. There was optimism. We started with distributing insurance products but soon realised that these products were not aligned with investor interest.”
Anup then started on a clean slate by starting distribution of mutual funds, corporate fixed deposits.
During GFC, people grew averse to volatility and started giving preference to safe avenues. Anup says that many of his clients redeemed their investments from mutual funds from 2008 till 2013 and invested in corporate FDs. His firm started recommending tax-free bonds which had made a comeback after a gap of over a decade.
While client onboarding has now become seamless, thanks to fully digital KYC, the scenario was different a decade back. But despite the challenges, the firm has onboarded its clients without meeting them. They used mobile apps and software provided by R&Ts to send across documents and complete KYC. At that time, the company had a team of five, of which one member was dedicated to IT.
Today, the company is highly dependent on technology to run its operations smoothly. The mobile application, website and the software connecting back end to front end is all indigenously produced in-house. Anup is grateful to his brother Anand, a techie, who has been consulting Money Honey on technology. The technology has bridged boundaries and the firm is able to onboard any client from across the globe.
Strike up a conversation
Money Honey has a team of 40 and around one-third of staff is dedicated to client-facing and talking with clients over the phone. They don’t that have a fixed pitch to talk to prospects; it evolves according to the situation.
From the numerous calls his team has made to prospects, Anup has observed that people don’t trust if you call once in a blue moon. “Investors get multiple calls from multiple organisations for different products. If you get a call from the same person at regular intervals, then you might reject them a couple of times initially. If my conversation with you is adding value, then a prospect doesn’t hang up.”
He says that one should sell a concept or solve a customers’ problem rather than selling a product.
Anup says that trust is built over a period of time if we are transparent and offer the right products which suit clients. “If others are talking to clients four times a year, we are talking to them 12 times. You have to find out what he is not doing correctly and guide him. They start trusting you because you gave holistic advice.”
Anup says that the conversation should be about updating clients about the market, how they can achieve their different goals. The firm has acquired all its clients over the phone. It has also received many referrals that have been onboarded without meeting a single prospect.
Offer the right advice
From his over two decades of journey in financial services, Anup has observed that investors always yearn for low risk and high returns. “People still have misconceptions about investing in low NAV price. People are still chasing returns. People didn’t invest in mid and small cap in July 2020. With the index more than doubling, people are now more comfortable in equity. Even senior citizens are coming forward to invest in equity.” He says the financial intermediaries should aim to dispel the misconceptions held by clients.
Many of his clients have benefitted from their timely advice which has held the firm in good stead. “We didn’t recommend mid and small cap funds in 2017. Most of them listen to our advice but some people take their own call. The year 2018 and 2019 were brutal for mid and small caps. Clients who don’t listen to our advice realised that they have made mistakes and over a period of time start trusting us,” says Anup.
Anup says that their recommendation on Balanced Advantage Funds also helped many clients protect their portfolios during the 2020 market crash. “During the 2020 crash, our portfolios protected the downside. When markets were down 20%, our portfolios were down 8%. Many clients called us to get their portfolios checked,” says Anup.
Need for handholding
With Sensex breaching 60,000 mark, many first-time investors have taken to direct equity investing. Anup says that while increasing participation in equities is an encouraging sign, he is wary of investors burning fingers in an attempt to make quick bucks. He has observed that most of the new investors have a small ticket size. “Direct equity is fun. It gives you a kick because price discovery is fast. Some investors burn fingers and return to mutual funds. Once your corpus becomes large, you become serious about your investment and need to talk to a financial adviser.”
His firm doesn’t shy away from recommending sectoral/thematic funds to help clients make tactical gains. They recommended pharma funds, infrastructure funds, commodity funds and other funds that had a tilt towards industrials which have clearly benefitted post the 2020 crash.
Anup has also started looking at including passive funds in client portfolios. He is also actively studying the international investing space and is currently recommending clients to take exposure to markets like China and other emerging markets.
The Road Ahead
When Anup joined the industry in 1999, it had assets under advisory of Rs 1 lakh crore. Today, many fund houses manage assets worth Rs 1 lakh crore each. Anup is bullish about the prospects of the industry given the fact that around Rs 150 lakh crore is still sitting in bank fixed deposits, which will eventually find its way into the mutual fund industry.
He says that distributors/advisers need to be prepared to cash in on this opportunity by building robust processes, technology, and a team that can deal with hundreds of clients as the industry expands. More importantly, he says that distributors need to adapt their business according to the latest trends to be able to stay relevant. For him, surviving is key.
His aim is to build a technology that will help his firm onboard new clients 24X7 without any human intervention.
