Well, the beginning is good. You should have bigger vision and should target atleast 10 crores of AUM and 15-20 lacs SIP book in 2 years time. If you are in a metro city, target should be even bigger.

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Your SIP book is less. The ratio of SIP to AUM must be more than 1%. This means, you should have a minimum SIP book of 15 Lacs per month.

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While it is good to have a large base of clients, it is nearly impossible to service them being an IFA. Typically, one IFA can service not more than 200-300 families. You should refine your client list. Your SIP book is small considering your client size. Ideally, you should do the following :-

• Identify top 200 clients and focus on them
• Hire sales / support staff to manage smaller clients.
• Increase your SIP book.
• You should focus on sales and systems. Leave backend works to staff.

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(1) Meet 10 Clients (new/existing) every week

(2) Hire employees for back end work.

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A new client may need more interactions and meetings in the first few years. After that, you should attempt to meet every client at least once a year from your side and whenever he/she calls for a meeting. Even if there is no expected business, you should still remain in touch with the client through a planned meeting.

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Ideally, a quick review (on phone) once in a quarter is good. You can also do an internal review and send a short email summary of 4-5 lines to the client. A comprehensive review once a year should be done with the client.

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Clients goal planning, mutual fund portfolio, running SIPs, other investments, forthcoming maturities, tax planning, service issues, etc., should be covered in a review.

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Meet two clients (existing or new) everyday. Minimum 40 clients every month. Explain each client about SIPs. Have a good presentation on SIPs (you may considering buying Masterstroke Mutual Fund Sales Presenter). Ask for reference from existing clients who are happy with SIPs. It will take time. Keep doing it. To increase AUM fast, you should consider selling STPs. It will bring you a lot of AUM in debt funds and clients can convert their FDs and post office savings in STPs.

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There is no fixed rule. Do what you think is best for the client. Some clients prefer goal based SIP, some prefer wealth creation. It has to be case to case basis. However, it is seen that when SIPs are linked with goals of clients, it lasts longer. For eg., link each SIP to education goal or marriage expenses goal or retirement planning goal.

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The process of selection of debt fund is –

(1) Select the AMC on the basis of brand and Size and in which you are comfortable

2) Decide you want to invest in liquid fund (upto 12 months) or short term funds (12-18 months) or medium term fund (18-36 months) or longer than that

3) Decide you want to take interest rate risk or invest in lower volatility funds like accrual funds.

Duration funds are more risky (schemes having longer duration investments). If you don’t understand duration funds then you should only sell liquid, short term and accrual funds. To understand more of these funds, you can discuss with your AMCs relationship manager.

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Well, I don’t think there is any regulation on this as of now. As far as the gifts are reasonable and occasional, it should be fine. The intent should be relationship only and quantum of gift must not be so high as to put suspicion in the eyes of regulators. (15th Apr’14)

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There is nothing called the best investment. It’s about what client wants and what is best for her situation. For clients who have fixed monthly cash flows, SIPs can be a better option. For clients who have lump sum funds available, STPs may be more convenient.

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You should suggest equity funds with a minimum time frame of 5 years. Historically, Indian equity markets have delivered positive returns most of the time if investors held their investments for 5 years. However, few times it took longer than 5 years. So, to be on a safer side, you should think long term as 10 years.

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Monthly SIPs are better as it involves lesser number of transactions. Whatever mode you choose, difference in returns may not be more than 1% pa. Also, you cannot be sure that the difference will be positive or negative. If the client is doing more than 1 SIP, then you spread the dates which will take care of further averaging. Some AMCs will show you data that daily or weekly SIPs deliver higher returns. Ignore such data as it could be a case of selective data mining. Keep it simple.

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Give proper disclosures as required. Tell the client that while the difference could be between 0.50-1.00% pa., but they also need to consider all the value additions given by IFAs. Like, good advice (there are over 3,000 funds to choose from), good service, regular updates and regular reviews. Also, the advice and service is not limited only to mutual funds. Whenever they require any advice on other financial products, an IFA helps them in it. (10th Sep’16)

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Reference is the best way to get new clients. Ask for reference in every client meeting. If you are new in the business, create a list of prospects through friends and relatives. Organise investor education and awareness programs. Don’t get disheartened if you are not able to convert all references. If your ratio is one out of two or one out of three prospects, you are going good.

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There is no limit and it depends on your vision. However, as a starting point (0-5 years), you should target atleast 50 crores of AUM if you are in Top 15 cities in India and 25-30 crores if you are in beyond Top 15 cities in India. This is just a reference point and you can do better. SIP book should be minimum 1% of total aum. It means; for 25 crore AUM, you should aim at 25 lacs monthly SIP.

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Yes. If you can organise IAPs, your client base should increase fast. The challenge is to make people come for the program. The best strategy is to do it in a housing society or for members of a club or for employees of a corporate.

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SIP is a process, not product. The beauty of SIP is that it works with all funds. Historically, midcaps and small cap schemes have delivered higher returns but by nature, they are more risky as compared to large cap and multicap funds. Even if clients assume that they will continue for long term, many of them panic during short term volatility. Therefore restrict allocation to midcaps and small caps. Don’t take 100% exposure in them. Add large cap and multicap funds also.

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If you have 200 clients, you should target a minimum of 800 SIPs. This is because if you are able to sell atleast 1 SIP to your last (200th) client, you can expect to get an average of 4 SIPs per client. This is because your 150th client may give you 2 SIPs, 100th client may give 4 SIPs, 50th client may give 5 SIPs and your top client may give you 10 SIPs. The average will become 4 per client (family). This will result in 800 SIPs. Taking an average of Rs.3,000/- per SIP, your monthly SIP book can be 25 Lacs per month.

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