In his 15 years as an advisor, Sajal has seen a lot in this business. He has seen bull and bear markets, he has seen MF sub-brokers gravitate towards MLM schemes after entry loads went away, he has seen retail and rural investors come into MFs during euphoric times and go out disillusioned later, he has seen advisors and investors chase past performance in asset classes as well as fund managers - he's seen the works. Sajal distils for us his 5 biggest learnings during these 15 eventful years as an advisor and also shares with us the biggest message that he is delivering to his clients now.

WF: Why did you decide to become a financial advisor back in 1997? How has your journey been over the last 15 years?

Sajal Roy: I was dealing in the stock market since my college days. After my MBA, I joined a broking company and recruited many agents and got many clients. They were into mobilizing fixed deposits and bonds those days. In 1997, I opened my own broking firm. It has been a long and memorable journey. It had started with just two staff members. We started dealing in mutual funds and stocks.

In my company I am the one doing the selling and marketing. Other staff is mainly into servicing. When I started off, the main products were fixed deposits, tax free bonds and insurance. We started around the year 2000 with mutual funds but after the market crash, investors shied away from mutual funds. Fixed deposits were the order of the day those days because the interest was around 12% to 14% in those days. In 2001, after the market crash, I started mobilizing debt funds and then equity funds from 2003 onwards for which my clients got very good returns.

From then on, my business has grown purely on referrals from satisfied clients. All my customers as well as agents who I recruited in those days - all came through referrals.

WF: Can you walk us through your current business model - products, AuM, client base, service proposition, team etc?

Sajal Roy: Our focus is into mutual funds. Majority of our revenue comes from mutual funds. Current AUM is as of now 85 crores. Over 80-85% of this AuM is my own clients which is around 500 - 600 investors while the rest is through sub-brokers. We used to have 300 to 400 sub-brokers but they have shifted away from mutual funds after abolition of entry load in August 2009. I have 25-30 agents active now.

I have about 10 people as staff who service clients and do back office operations. We also have a dedicated website which is updated with latest information and we send electronic mailers etc. to corporate clients and HNIs. We send hard copies of documents to retail clients as all might not be computer friendly. We have a mix of clients - right from corporates to SMEs to retail urban investors and even retail rural investors. In terms of folios, we have over 25,000 folios.

I believe that the customer is king and I strive to give prompt service whether it is documentation, redemption of funds or sending across mailers to clients regarding market conditions, latest world news, regional news etc .I ensure that my clients are given good service so that they are happy. I have testimonials from clients with good feedback on my service.

WF : What are these sub-brokers doing now, after moving out of mutual funds?

Sajal Roy : They have shifted to multi-level marketing schemes which are very popular in the eastern part of the country. Some have shifted to insurance. In MLM schemes, they get 10-15% commission. The lure of high commissions is often very high for many of these sub-brokers.

WF: You have a very varied mix of clients - from corporate / SME clients to urban HNIs to rural retail clients. Is this a conscious strategy to have a diversified client mix or did it happen naturally?

Sajal Roy : The client's diversification has happened naturally over the years. The urban client base was from the beginning and I got the rural base from 2006 to 2009. In 2006, I teamed up with a company who were mobilizing insurance through their rural network. I associated with them and started holding meetings and canvassed for rural agents and their client base in different rural areas to diversify their product base to mutual funds.

In 2009, that company formed their own distribution company and got into multi level marketing and my association stopped with them. I have many clients in rural areas but cannot service these areas any longer as I used to, as margins have come down in the business.

WF: SEBI has announced a number of measures to promote retail and rural push for mutual funds. Do you think these steps will help achieve SEBI's goal? What more needs to be done to make mutual funds more relevant to a larger proportion of Indian savers?

Sajal Roy: I have begun reactivating my rural network again. These agents are ok to consider mutual funds. They are in a position to bring in rural investors to investor meets. But the biggest road-block to actually get these agents to push mutual funds is that when MLM schemes are offering 10-15% commission, their focus is getting diverted to these kinds of schemes.

I have anyway begun rural area activities and am preparing my network. When this MLM fad goes away, I would like to be prepared with my network to get rural clients into mutual funds. I sincerely hope that SEBI does something to stop these MLM schemes - they can destroy a lot of investor confidence if they go bust.

Until SEBI effectively stops these kinds of schemes, the rural push that the MF industry is hoping for, will be a slow struggle.

WF: What are your biggest learnings as an advisor over these last 15 years?

Sajal Roy: My 5 biggest learnings in the last 15 years are -

• Admit your mistakes : As an advisor, one should admit when one makes mistakes and this helps in the long term. For e.g. promoting NFOs in the year 2000 was wrong and I admitted to it. We are all human and we make mistakes. We must have the courage to own up our mistakes - that builds a lot more trust long term than trying to cover up for your mistakes.

• Never stop learning : I read a lot - and I learn a lot from my reading. Reading books and journals related to markets and the cycles also helps. One can learn many things by reading market gurus

• Everything is cyclical : Whether we talk about markets or even fund houses performance - everything is cyclical. Chasing funds that have recent strong performance is about as bad as chasing the market after it has put in a robust performance. It is very important for advisors and investors to understand market cycles. It is equally important for us to understand that one fund house or fund manager cannot always be a chart topper. Recent performance should not be the most important criterion for an advisor to choose a fund manager or fund house. Blindly following trends is a huge blunder.

• Asset allocation is most important : A corollary to understanding market cycles is to also understand that you cannot time entry and exit into asset classes with high degree of confidence on a consistent basis. Hence, preaching and practicing asset allocation is the only way forward for any advisor.

• Investor education is the only way forward : Our job as advisors is to help investors understand and plan for their goals and help them in their journey to achieving their financial goals. The more we educate them about their goals, the more closer they get towards long term financial planning. The more we educate them about short term market movements, the more blunders we are all likely to commit. Education is the most important - but the right kind of education is even more vital for us to succeed as advisors and for investors to have a good experience with their investments.

WF: What are your key priorities in your firm now?

Sajal Roy: My biggest priority is to help my clients and prospective clients to understand that we are in a structural bull market, which happens probably only once in a lifetime for an individual. If you look at US, Japan - any market - you will observe that structural bull markets last typically for 15-20 years. The economies may continue growing after that - but returns from assets like equity and property will come in largely during that structural bull market phase of 15-20 years.

Our structural bull market started in 2003 and therefore should probably go on until 2018-2023. We are already 10 years into this structural bull market. Investors must have adequate equity exposure to meaningfully capitalize on this structural bull market, which may probably last another 5-10 years. Investors must use this consolidation phase to invest in equities before the rise resumes. There is no point in jumping into the bandwagon in the last phases of a structural bull market. We are half way through - its time to get invested for investors who are not adequately exposed to equity in their portfolios. I want to try and ensure that I get as many people as possible to see this and take timely action. There is money to be made in equities for investors who get in now.