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| Advisor Speak |
30th November 2011 |
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| Joining a platform enables me to charge fees | ||||
| Mohsin Bijepuri, Bijapuri Financial Advisory, Chennai | ||||
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Mohsin Bijapuri has built his financial advisory practice brick by brick, customer by customer. He thinks of himself as a financial architect - one who meticulously designs and constructs financial plans in accordance with the dreams and desires of his client - much as an architect would design and create his client's dream home. The architect in him is clearly visible in the manner in which he has built up his business - and serves as a lesson for advisors who wish to build their practice in a structured, scalable manner, on sound foundations. Right from his decision to equip himself with a wide array of professional certifications, to his thirst for knowledge, to clarity on putting clients first above everything else, to his latest decision to join a platform - all these actions speak eloquently of an advisor who thinks ahead and acts decisively to ensure that he always stays ahead of the game. |
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WF : What prompted you to move out of your job at SBI and become an entrepreneur in the financial advisory field? Mohsin : In SBI I was selected from Madras Circle as a Probationary Officer, but posted to Ahmedabad Circle. My entire service in SBI was all over Gujarat, my first posting being Godhra in 1984. Like me there were several South Indians posted there. A banking job is the most mundane of activities. No challenges. The same routine, day in and day out. Except for salary, perks and status there was nothing exciting in it. I could see highly talented, fellow probationers languishing. At the same time, I learnt two things there: One from my Gujarati co-employees, the diehard love for the stock market (those days online trading was non-existent) and the entrepreneurial spirit from the customers. The Gujarati mindset of becoming 'my own boss' prevailed and I returned to my hometown Chennai. Initially I tried my hand at launching tangible consumer products, but the love for financial services was always lurking in my mind and when the private Financial Services industry started opening, I made my jump into it and have never looked back. While launching consumer products, I found that I was good at marketing and advising is an advanced off shoot of marketing. WF : How was the journey from the early days of starting up your practice to where you have come today? What were some of the biggest challenges that you faced? What were some of your biggest learning's in this journey? The earliest challenge was the rejections. People were not open to advising from a financial planning point of view. They were used to saving only for tax planning or it was mostly an obligatory purchase. Never did they do it for achieving a goal. But over a period of time, I learnt that persistence pays and today the same customers who are now my clients invest for their futures with a well discussed, formulated financial plan. A big failing I noticed in the advisory field was I found that most advisors laid their interest before their client's interest. In fact it was advisor, company (they represented) and then the client in that order. I reversed the sequence. It was always client first and everything else got taken care of. Other learning's were:
WF : You have three professional accreditations to your credit besides the usual AMFI and IRDA certifications - Certified Retirement Professional (CRP), Diploma in Wealth Management Practice (DWMP) and Certified Health Insurance Professional (CHIP). Can you briefly take us through these certifications? What prompted you to go in for these? What impact do you think this has had on your business? How difficult or easy was it to get back to studying after so many years of work? Mohsin : I will answer this question in two parts. Financial Services is a very dynamic industry. It needs a constant upgradation of knowledge and skills. Remember you are dealing with the hard earned money of individuals and you have been employed to secure their financial future. It needs thorough financial knowledge, knowledge of current events (Wealth Forum E-zine is a rich resource in keeping one abreast of all events in the industry), skill in fact finding and probing, meeting objections, answering resistance with satisfaction. You need to stay current in the industry. I ensure that I don't miss a single fund manager or top manager/speaker meeting. I attend all knowledge gathering seminars which may help me help my clients. You never can evaluate the take-aways. The take-aways can be immeasurable. In my visits to international financial summits and conferences, notably the Million Dollar Round Table Meetings, I find that the advisors decorate themselves with certifications such as CFP, CFA, ChLU, and ChFC and so on. I gathered the usefulness behind it. Prospects prefer meeting a well qualified financial services professional. An advisor in US told me that prospects prefer professional qualifications over academic ones. Towards this end, I wish to acquire as many professional qualifications as can benefit me and my clients. Retirement is a huge market in India and according to me it has not even been scratched. The government and the regulators are still floundering with this crucial need of every individual, a country where social security is absent. Hence we Financial Planners need to educate the client on proper retirement planning. Proper Health Care Protection is another neglected area in this country. In an industry where you may see even CEO's holding covers of 2 lacs and thinking that they are sufficiently protected is funny. A bye-pass surgery, so common today may cost not less than 4 to 5 lacs and all healthcare services are galloping at 20% inflation. DWMP was awarded by the IIFP (Indian institute of Financial Planners) and sponsored by Pramerica Mutual Fund after a comprehensive Financial Planning course spread over several weekends. CRP is run by the Max New York Life Insurance Institute and it has equipped me with tools and aspects of retirement planning. CHIP was awarded by the Bupa Health Insurance Institute. When you are passionate about what you do, time and energy are automatically created. WF : Can you take us through your business model - client mix, your service proposition, team, geographic spread of clients, size of AuM, product mix etc? Mohsin : My business model was more by evolution. I should thank Max New York Life (MNYL) for the excellent foundation they gave me in understanding the Financial Services Industry. In MNYL we were trained by the best of trainers. They taught us that understanding the customer's needs was paramount to everything else. My client wanted me to take care of all his financial planning needs from advisory to providing the products. The Indian customer is still not ready for sourcing it from various sources. Hence my product mix is fully diversified, and it includes Insurance(Life,Health,Accident & Disability & Asset), Equity & Debt (thru' Mutual Funds only), Gold Bullion(for investment only) and Real Estate(long term holdings). I am an advisor and an agent of the manufacturers. Client interaction for advisory and review purpose is only me. Service is fully delegated to my team and my clients have always expressed satisfaction at our service levels. We need to remember that customer service satisfaction is what is going to take us forward in this industry of intangible products. Good advice alone is not sufficient. My client mix ranges from a diversified base that includes individuals engaged in medicine, engineering, information technology, telecom, law, entertainment, sports, budding professionals, technocrats, entrepreneurs and emerging small businesses. Clients are spread across India and the globe. NRI customers form a good portion of my client base and many of them are from the USA and Middle-East. Across all asset categories I manage assets in excess of 100 Crores. WF : Your tag line says Financial Architect - can you please elaborate on this? Mohsin : Let us first understand who an architect is. Briefly said he is one who designs and supervises the construction of structures (buildings etc.). The client specifies his needs and the architect decides where to place them accordingly and plans the same. As a Financial Planner, aren't we doing the same with our clients Financial Plans. We understand their goals and concerns, and design a suitable plan that takes care of all these needs and we don't stop at that, we help them implement them and also review them periodically to bring about changes if any, which a conventional civil architect does not do, and help them keep up the financial plan suited to his current and future needs. WF : How has your experience been on charging fees for your advice? Mohsin : Full of resistance. I did not want to lose my clients for which I had toiled hard to acquire one by one, but could not be without remuneration and had to make them understand. I could understand that I was justified in asking for a fee, only if I provided a value add to my services. Just telling them that 'entry loads have been abolished, you now has to pay me directly' was not convincing. The solution came thru' the iFast platform. The client saw the considerable value addition I was giving to his portfolio management thru' the advanced technological platform and the reports I was able to present to him along with the ease of transactions. WF : What were the factors that you evaluated while deciding on the I-Fast platform? What were the key benefits you envisaged? Does the issue of working as a sub-broker bother you? Mohsin : The reasons were several. For a proper client MIS, you have to spend a lot of time yourself with the current software's available in the market. Time is at a premium. iFast is a web based platform, giving the client a 360' view of the portfolio 24/7 to the client with real time values. What more could he and I ask for? In this dynamic business, you have to supplement yourself with technology and tools which needed to be continuously upgraded. As an individual I could ill afford the cost of the changing dynamics in information Technology. I found iFast to be a wonderful tool as an answer. On the charging front I decide to be very reasonable. iFast PMS allows both upfront and trail management fee each upto 2.5%. I decided that I would not charge upfront and I restricted the Trail management fee to 1% p.a charged quarterly. The client is not complaining and is enjoying the value add. You have to compromise somewhere and the issue of sub-brokership is where I had to accept. However, let me add that iFast at no place tells it loud that they are the main brokers. iFast is an enabler. It enables me to communicate with the clients better. I continue to be the client's only advisor and the only face of interaction and iFast supplements with the latest technology and regulatory compliant processes. That's it. WF : You offer a PMS Service with exposure to all asset classes. How does this work? Does this involve incremental costs for your clients? What are the additional benefits that clients get from the PMS offering? Mohsin : When you have established your Trust, Faith and Integrity with your clients, he would not like his investments to be handled by anyone else. I have clients who when approached by their close kin for a sale are directed to me for guiding their buying decisions. Handling a client PMS was a natural evolution for my business and I am a one stop shop for all their investment and protection needs. Asset classes like Insurance, Gold Bullion, and Real Estate have their own commission structures and I do not charge a fee for these asset classes. WF : How do you see your business model evolving over the next 5 years? Which product categories do you see sustaining client interest the most? In what ways are you likely to tweak your business to align with the current and proposed regulatory changes? Mohsin : I don't think we have seen the worst still and we have to learn to accept that changes are going to be rapid and continuous across all regulators. I have my business plan in place and with my current reasonable service charge, I can happily retire. My business will continue to grow. My role as a fiduciary will never get diluted and that is my main strength. Ethical selling of quality insurance (don't also over insure or under insure) along with prudential asset management based on current knowledge and skills are going to sustain client interest. Insurance is first and foremost a protection tool and then a saving tool which can at best offer a return slightly higher than the bank over the long term in a tax efficient manner. The over night, get rich quick operators will vanish.While advisors are going to face a lot of challenges; plenty of opportunities are also going to unfold. Grab them as they come. Keep up to the changes in the industry. One of my biggest successes was when I started servicing the financial planning needs of the second generation of my clients. Today I am building holistic portfolios comprising all asset classes for those same children who were going to school or college when I started building their parents portfolio. I feel very happy and proud at this achievement. The challenge here is that this is a tech savvy generation and requires information at their fingertips. This generation is India's future and anyone servicing it long term is bound to benefit. WF : What in your view are the key factors that IFAs should focus on, going forward, to grow their business successfully in the coming years? Mohsin :
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