Straight Talk 5th November 2013
If you want to fly, get on to the flight first
Brijesh Dalmia, Dalmia Advisory, Kolkata

imgbd Brijesh Dalmia is not only one of Eastern India's most successful advisors, but is an active IFA trainer and coach, having conducted sessions for thousands of IFAs across the country. He is known for his straight talking style - and is known to deliver his high conviction messages which are sometimes difficult to digest, but most often bang on.

We initiate a new column called Straight Talk, where Brijesh will periodically share his learnings and observations on a wide range of business issues that distributors and advisors are grappling with. In this article, whose first draft was originally written for the recently held IFA Galaxy summit, Brijesh discusses a key question that many IFAs face : can we really grow our business on a purely retail model? True to his straight talking style, Brijesh says that if you want to fly, get on to the flight first - if you want to grow, first commit yourself to a 10 point growth agenda that focuses on the core building blocks. Growth will automatically come, says Brijesh.


Can I become big with a purely retail model?

Thousands of IFA's across the country are always in dilemma if they are doing the right thing by focussing on retail business. Specially, when focus of several conferences and speakers is to build a business model on High Networth Individuals. Many IFA's who come to such conferences seeking motivation are left confused on their own business model which is completely retail oriented. They see these successful IFAs with AuMs in hundreds of crores and keep wondering : how will I ever get to those numbers with a purely retail base?

"Hold on" is my advice. Your retail business is capable of giving you growth beyond what you currently perceive as possible.

I have met thousands of advisors across the length and breadth of the country. Most advisors do not have approach and relationship skills that are perhaps needed when dealing with wealthy individuals. Does it mean that they cannot become successful advisors? Does it mean that they cannot have a good business model in retail ? I don't think so. An advisor can build a sustainable, quality and profitably business model in retail space.

Retail has its merits, and its own challenges

There are several advantages of retail business -

  • - It is less risky as compared to other business models.

  • - It is more 'regulation proof'.

  • - Assets are more sticky (long term) which results in higher revenue.

  • - Higher loyalty of clients.

  • - Less impacted by market / economic downturn.

  • Yes, it has its own challenges as to higher servicing, meeting constraints, lower revenue per client, etc. But this doesn't mean one has to worry about being in retail space.

    What most advisors forget is that, a small client can over a period of time become big. It's only a matter of time. By default, out of 100 retail clients, 10-20 will become HNI in 5-10 years. If the advisor keeps on servicing these clients, he will also be able to grow over time. Remember, we grow with the growth of our clients. The key is patience, good advice, good service and quality relationship with the clients.

    The grass always looks greener on the other side

    The grass always looks greener on the other side. Retail advisors are highly influenced by bigger city HNI based advisors who talk jazzy language, have attractive persona and travel by high end cars. What they forget is that behind all this is decades of hard work and dedication. It did not happen overnight for them. Most of these advisors also started with small clients who over time became big. Ask any of these leading IFAs whether or not they gave at least 10-15 years of fully dedicated efforts to build their advisory business before they became successful - and the answer will be yes in all cases. No successful advisor ever became successful by treating this as a part time vocation, or by questioning his or her business model every now and then.

    Yes, some advisors have successfully focussed on HNI Clients and family office concepts but that is not the end of the story. This is in no way suggest, that one cannot build a retail model. There are so many advisors in the country who are sitting on 2000-3000 SIP's from small clients and have built an asset base of over 100 crores......all from retail clients. If they can, why can't others do it.

    10 point recipe for retail growth

    Retail offers big scope. My sense is that most advisors are doing more of clerical work and not selling and advisory. Here is my 10 point program that I would advocate for advisors who wish to grow in the retail space :-

  • - Work 8 hours a day seriously as a financial advisor. If you are doing other things, that's wonderful - but ensure that you give this business 8 hours a day, every day.

  • - If you have 100 retail clients and a total AuM which is a fraction of the "100 crore big league", don't get disheartened and doubt your model. Work well with these 100 clients and make conscious efforts to acquire more clients - whether big or small - and you will find a growth path emerging in front of you. If you keep your focus, one day you will become big because some of these clients will become big.

  • - Don't call anybody your client if you do not derive even Rs.1,000/- as revenue every year.

  • - Sell SIP's to all your retail clients. The day you will have a SIP book of 500 plus and Rs. 10 Lacs monthly, you will grow in no time.

  • - Move completely away from a recent returns based product selling approach to a goal based solution selling approach. You will find clients relating to this a lot more and you will also find your servicing time dropping considerably, thereby allowing you to meet more prospects and grow your business.

  • - Meet all your clients atleast once every year. Otherwise don't call them your clients.

  • - Focus on mutual funds. Also sell them life and general insurance products.

  • - Hire a back office staff and start using technology.

  • - Once you have hired a back office person, start going out of your office and meeting at least 2 clients or prospects every day. If you do this regularly, you will be surprised to see how your growth path opens up in front of you.

  • - Read one hour a day to gain knowledge and expertise. Without this, you will lose your clients who become big over a period of time. Big clients need a knowledgeable advisor.

  • If you want to fly, get on to the flight first.

    If you want to grow, have clients first. They will automatically grow and you will grow with them.

    All business models are good. It depends upon your individual strength, limitations, capabilities, effort, etc. Our industry provides huge opportunities. Have patience, serve your clients well and you will grow much more than you can imagine today.

    All the best.

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