Resource id #4Resource id #4 Advisor Interview
16 June, 2024 16:55 IST

`We have proportionately higher assets with HDFC MF`

Source: IRIS (03 January 2011)

`We have proportionately higher assets with HDFC MF`
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In an interview with Yogita Khatri of, Shibu Das, Director, Fine Advice says, ``Investors should stick to simple funds that have a proven track record and must be wary of any structured products.``

> Can you please tell us about `Fine Advice`? What services do you offer? How did you step up in advisory business?

I qualified as a Chartered Accountant in 1989 at the age of 22 years and setting out as an entrepreneur was on my mind from day one. Many factors inspired me to start on my own rather than get employed. As a business owner, I`m my own boss. I can`t get fired. Being in business allows me to handle cross functional responsibilities. More importantly, I have the freedom to make the decisions that are crucial to my business success. As an independent financial advisor, I`m actually working in a field that I really enjoy and this is the domain where I believe I can put my passion, skills and knowledge to use, and get personal satisfaction from implementing my ideas and working directly with clients. Added to the above, is the great advantage of having a flexible lifestyle when I`m in my own business. I get to decide my own working hours and where I want to work from. If I want to spend more time on non-work activities or with my family, I don`t have to ask for the time off. Coming from a middle class Bengali background with no previous family member in business, it was indeed a challenge to start out on my own. With no seed capital the early days were quite a challenge. I started the company as a boutique investment banking and corporate advisory services firm. Getting clients to believe in my ability was a major challenge. However hard work and a bit of luck, helped me to successfully execute a few assignments that were offered by some leading corporates in Calcutta on a strictly `success fees` basis. Once these jobs were executed, there was a steady flow of assignments.

> How do you reach out to your clients? How do you win the confidence of your clients?

The business was initially focused on institutions and HNIs as the clients were those where we had offered other corporate advisory services. However as a natural progression the business got spread and today it is a homogeneous mix of all segments.

I believe that a business model evolves over time and unless an entrepreneur is into a very innovative business which is one of its kinds, there is normally no rigid business model.

First generation entrepreneurs who are more in the mould of technocrats hardly have the capital to spend on brand building or marketing. So to start with it is largely word-of-the mouth that counts. Once the business grows to a reasonable size one can think of other modes of marketing. Networking is however very important.

Each client is different from the other. However a majority of the clients seek an advisor with strong credentials in terms of educational qualifications and experience. Clients also want their financial advisor to be trustworthy. Also clients seek a single stop solution for all the financial needs, like investment advisory, tax planning, estate planning etc. In most cases the clients may not think too much before choosing an advisor, but once they start a relationship the client may choose to retain the advisor`s services or dump him based on certain factors. Clients respect honesty, commitment, attitude to get things done and dependability. Clients want their advisors to be proactive rather than reactive.

> How realistic is it to expect Indian investors to pay for financial advice? What has been your experience at Fine Advice?

We have not yet started charging fee for our financial advice and would prefer the market to evolve. Although initially there is resistance, eventually Indian investors would get into the habit of paying a fee for any advice that they see value in.

> What are the parameters that matter you most when selecting funds. What would you recommend investors on equity and debt side?

Investors should stick to simple funds that have a proven track record and must be wary of any structured products.

> As the tax-planning season has began, how would you recommend investors to go for the same? What kind of investment avenues one should look at for this fiscal?

At `Fine Advice`, tax planning is an ongoing affair and our clients are advised to spread out their investments for tax relief over the entire year. Hence we don`t have a tax planning season as such.

> According to you, on a broader perspective, what financial resolutions should people take in the new year 2011?

Every new year investors must just have one resolution… not to forget the merits of asset allocation!

> What is your view on the current market scenario? What are the risks an investor should look out for in 2011?

I think India is in a long term bull phase as far as growth in the economy is concerned. If this is true then the stock markets will capture the economic growth. However one must never forget that asset allocation is the key to financial health.

> How many fund houses do you deal with? In which fund house do you have the maximum AUM (in terms of percentage)? Tell us your favorite all-time MF schemes and fund managers.

We are empanelled with all the fund houses. However we are focused on schemes of established houses like HDFC, Reliance, DSP Blackrock, IDFC, Franklin, Birla, ICICI etc. We have proportionately higher assets with HDFC Mutual Fund.

> What`s the one thing that you would change in the financial services industry, if you had the power to make that happen?

I think the entry barriers in terms of educational backgrounds for carrying out the wealth advisory business should be stricter and all intermediaries should be regulated. To take care of health one visits a qualified doctor. The same should apply when they plan to take care of their wealth.

> Going ahead, what are your plans? How do you plan to expand your business?

In an advisory business, where clients place their trust in you personally, scaling up without losing touch with your old clients is indeed the biggest challenge. The old clients always believe that they need the personal attention they have been used to. It needs great communication skills to subtly convey the message that with experience and the passage of time the individual practice has evolved into an institutionalized advisory mode which in fact works to his favor. In the process we may actually lose a few old clients but that is the price one has to pay for ensuring growth.

For any advisory business the challenge lies in institutionalizing the service. Clients are just comfortable when they are handled by me. Scaling up thus becomes difficult. The process is long and needs to be handled carefully. In pursuit of scale I would not compromise the basic values on which the practice has been built up over the last two decades.

The other big challenge is to attract professionals into the organization. It has been very challenging for me to build up a professional team and today after 20 years I have managed to start attracting qualified professionals to join hands with me in scaling up the business. Our team today has 38 people of which 7 are qualified professionals.

> What three books related to personal finance would you recommend every person read and why?

The one that immediately comes to my mind is a recent book I read, `Too Big to Fail`. Interesting indeed.

> Is there anything else you would like to share with our readers?

Our corporate mission is:

# To help our clients achieve financial peace of mind by providing sensible investment strategies.

# To consistently demonstrate professionalism and excellence in everything we do.

# To win the respect of our principals and trust of our clients.

We have over the years positioned ourselves as a family office to our clients and ensured that every relationship is deepened with every passing day. We position ourselves as a caddie and that`s the origin of our punch line ``YOUR CADDIE FOR LIFE``. A visit to our website, will give a greater insight.

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