What is a Business Strategy?

Business Strategy lays down the policies and plans for achieving the objectives of the organization. The objectives entails the mission, vision, and goals of the business, and the strategy is the masterplan of how you are going to achieve these organizational objectives.

Why do you need a Business Strategy?

Just like you do financial planning for your clients, you devise a plan for them to achieve their long term and short term goals, keeping in mind their needs, perspectives, their risk profile, etc. The financial plan serves as a guide to the investor through his investing journey, since it gives a broad view of the trajectory towards his long term goals, and he can understand the impact of various investing decisions on his goal achievement.

What financial planning does for an investor, business strategy planning does for the advisor. Your business strategy is the master plan for your business, it is a step by step action plan for achieving your business objectives. Having a well defined business strategy not just gives you a sense of direction, but it will give clarity of approach to your employees too.

So, the first step, Define your vision and your long term goals. Once you have visualized where you want to see your business 10 years down the line or even further, break down your long term vision into short term targets.

Next Define the strategy which is going to maneuver your business all the way to reach your goals, actualize your vision, while overcoming the challenges that come in between.

Following are the key ingredients of a business strategy.

• Identify the client segment/s you intend to target and how are you going to approach your prospective clients. You can cater to the entire universe of investors also, but targeting a specific lot on the basis of your strengths, interests, like-mindedness; will enable you streamline your business processes and concentrate your efforts in one direction. It may be difficult in the initial stages when the client base is small, but as the business grows, and you have established yourself in the niche, then it becomes relatively simple and more rewarding, since you understand the target segment deep down, people trust your knowledge, and chances of getting referrals also increase.
• How do you want to position your business and build your brand? For a product provider, his brand is imprinted on his product package, it's all around on his advertising campaigns, websites, everywhere. But for a service provider, brand building brings in additional challenges, because he is not offering a tangible product which shows off his brand. So, what impression do you want to create in the client's mind? How are you going to differentiate yourselves from other advisors? How do you want your clients to tell your story? This is your brand strategy, which must be clearly defined and communicated, because this is what each person of your organization will reflect in his eyes, in his words, in his expressions and his gait.
• Identify your take on business expansion. How will you get more leads and referrals, to get more clients on board? Identify the techniques you will use for business development activities, define the broad lines for marketing activities.
• Next, define your client retention strategy, what service practices will you adopt to ensure client satisfaction. Define a mantra for client servicing and satisfaction, this is something which you and your employees are going to look upon and practice everyday.

The above were the key elements that go into making up of a business strategy. However, Business strategy like your client's financial plan is not a one time thing, your goals evolve, specializations may change, your methods may change, so there is a need to constantly adjust your business strategy to the developments. Hence just like you review your clients' financial plans from time to time, you need to regularly look back at your own business strategy. Business strategy gives a direction to business, it is a vast concept, this was just an overview to give you a broad sense of how you can go about developing yours.

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Indian economy is a growing economy - a land of opportunities. We have multiple investment avenues and we have both domestic and global investors tapping the growth opportunities. Indian investors have some typical shared characteristics. Indians have a high savings to total income ratio. These savings are directed towards various investment options. A major percentage of the investors invest in debt asset class through products like PPF and Fixed Deposits. We also give huge importance to gold in our homes and lockers. Many invest in traditional insurance options as well. A small number of investors among them are exploiting the potential of our country by investing in equities. These equity investors invest either by investing directly through a broker's terminal or by investing in an equity mutual fund.

This article concentrates on the former chunk of people who invest in equity stocks directly. Direct equity investors is an alluring segment, because here people believe in the underlying asset 'Equities', these people are not restricted to traditional investments and hence an eye opener is not required. But the difficult part here is pulling these investors out from their comfort zone to exploring a more organized, 'Equity Mutual Fund' option. Most direct equity investors are just skeptical about Mutual Funds, and the reason for their disbelief is inadequate or false information about the product.

The equity investors invest on their own and most of them have a portfolio of their few favourite stocks. These investors buy and sell frequently, based on market movements, their gut feeling and on the advice given on the business news channels. These investors are risk takers, they enjoy the thrill of picking stocks on their own, they do have knowledge of the markets and they are optimistic about their investments. So the major challenge for the advisor is dealing with their psychology, and explaining to them that there is a better way of investing in equities.

So, what do you tell the direct equity investors so that they are convinced to explore the Mutual Fund option.

• Performance: So, your first point would be performance of Equity Mutual Funds. You have to explain to the client that his investment product and amount remains the same, but routing the investment through Mutual Funds, would yield better returns. Though the underlying asset is the same, yet Mutual Funds have always performed better than the markets. If you look at the past 15 years' performance, the average of diversified equity schemes have given a return of 20.86%, while Sensex's return for the same period remained at 15.20%. (Data as of 31^st Jan 17).
• Professionally Managed: Your second contention would be, Mutual Funds are managed by experts. There is a fund manager and a full fledged research team, and these people have the knowledge and expertise and after long brainstorming sessions, stocks are selected on the basis of the investment objective of the scheme. Further buying and selling and overall management is also in the hands of these professionals. The investor don't have to worry about stock selection, tracking the performance etc., he just has to invest and relax. When an investor goes by the direct option, he might choose the wrong product, he might make wrong decisions based on emotions or wrong information. But when the essence of so many wise brains is going into it, erring is a seldom phenomenon.
• The Cost factor: The next major factor to switch from direct equity investing to equity mutual funds is the cost associated. In Direct investing, every time you hit a purchase or sale button, you have to pay a commission irrespective of you making a profit or not. In Mutual Funds, the expense percentage is very nominal, and there are upper limits fixed to the expenses that can be charged to the scheme.
• Diversification: The next point in your pitch would be Diversification. A mutual fund has a huge corpus, and it is spread across multiple sectors, and classes of stocks. So, if your investor has invested say Rs 1 Lakh in equities, he might have diversified among 5-6 stocks at the max. But by investing in a Mutual Fund, he gets exposure to at least 30-40 stocks of different sectors and classes with the same investment of Rs 1 Lakh. And because of such extensive diversification, risk is minimised to a large extent.
• SIP: Another major reason which investors might find attractive is the SIP option of investing. You shall acquaint the investors with the benefits of SIP investing in terms of both better returns as well as convenience of investing

The direct equity investment segment is a big opportunity for the advisors, as they do not need ice breakers, they are optimistic people and are not risk averse. So, add these people to your client base by targeting the right spots.

Client prospecting is essential whether you are a new bee in business, or a seasoned player. For some, cold calling is the key, while for others they stick to referrals only. Whatever it may be, you need new clients for Sustainability as well as Scalability. You may have a thousand clients, but there goals will mature, they will die, so for growth, for ensuring that your business continuous even after you, you have to put in extra efforts and identify the next set of people who will be taking over. Client prospecting is a never ending activity, and in this passage we are going to share with you some techniques which can be helpful in getting more and more clients on board.

> Set acquisition targets:Although most advisors have client acquisition activity on top of the hit list, but they do not have clear acquisition targets. So, the first step would be to define your near term as well as macro client acquisition goals. Write the goals down and regularly review your progress, target setting will give you a sort of sense of direction. You will know exactly when you need to gear up, put in extra efforts to meet your targets.

> Everyone you know or meet, must know that you offer financial advisory services. Have a few business cards stacked in your wallet always, to hand out to people you meet. This is a very important activity, especially in the initial years of your advisory career, you need to build plenty of contacts.

> Find your Niche: You can start researching from your existing client base, the ones whom you are most comfortable working with as well as the other way round. Identify the common characteristics, it could be age, education, income, profession, goals, etc. These are the people who keep you going, who make you want to get up and work everyday. Create a differentiation strategy for catering to this set of people, since you understand their unique needs and have the most appropriate solution for those needs. And then develop a strategy to garner similar people into your client base. These people can also be your jackpot to referrals. Your core strength, that is the way you connect with this target segment, topped with with your marketing efforts, can help you build a strong client base, a set of future clients whom you'd love working with, and serve them better.

> An inevitable strategy for client prospecting, is constantly upgrading your knowledge. You should be like a powerhouse of information, don't mind giving away a bit of free advice, if it helps the listener, he will come back to you. People seek advisors who have knowledge of the markets, products, who are familiar with the latest updates, happenings in the economy, they want someone who can help them select the right products, who can guide them through difficult market situations. Just think of this guy in your circle, who is associated with let's say a spiritual organization. He is always talking about spirituality, good deeds, helping people in trouble by advising them the right solutions, counseling people, and other people getting attracted towards his conversations for they respect him for his knowledge, they seek solutions to their personal problems within those conversations, some even end up join him. Be that guy, read a lot, gain knowledge and share that wisdom.

> You must be Visible: The propaganda on Mutual funds, frequent Ads from AMCs and even AMFI, has led to investor curiosity, investors want to know about Mutual Funds, which schemes are most suitable, people are also looking for a trusted mutual fund distributor who can guide them in scheme selection since there is a whole universe of MF schemes in the market. So, you must make sure that demand meets supply, be available and active, especially on social media platforms, other media platforms like quora, linkedin, local groups, etc. The seekers must be able to find you.

> Take care of the content you are marketing: People are seeking more than just returns, from their financial advisor. Investors look for a person whom he/she can trust, and considering so many instances of mis-selling in the financial services industry, investors look for someone who is honest and ethical and would recommend investments based on his/her needs and not his own commissions. So, your marketing strategy, your website, your visiting card, your business' tag line, all must convey the core values you wish to communicate.

To conclude, there is no one size fits all formula to get new clients on board, create your own approach to client prospecting, based on your strengths, business values, experience and instincts. A combination of the above mixed with some your own unique practices, can you build a perfect client acquisition model.

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For many financial advisors first client meetings can be overwhelming and exciting at the same time. We are faced with many questions as to how best to present ourselves and make a lasting impression on the client. After all, every client meeting is like be a surprise box, awaiting to be opened and who knows what lies inside – a long-lasting fruitful relationship or just a blooper.

Well there is no doubt that every advisor wants to do his/her best for every client meeting, especially the first ones. So in order to help you shine, we are herewith putting forward some tips for success. But before you begin, remember it mostly covers the things like preparation, organising, presentation, etc. which are all very important parts of our profession and hence worth mentioning every bit in detail. All these bits when come together can help make a powerful impact on any prospective client.

1. Client due diligence:

   There are essentially two parts to due-diligence. First, know who the client is and second, know what his problem /need is. If the client is a reference, then we should first inquire about him/her from the reference giver. In case if the client is an influential person /popular personality/ professional /corporate entity, a proper on-line search /network hunt can reveal a lot of details. Also have an habit of noting/recording your initial communication with the client and what he is looking from you. Remember, the impact of quality of due diligence is often disproportionately high to the efforts you may have to put in. The client will feel that you are well connected, professional and much experienced in the field and will be much more open to share and discuss with you.

2. Meeting Location:

   Choosing a right location is an important element and likewise you may also prepare for the meeting. Typically, advisors are often comfortable choosing one's own office but than necessarily should not be the case. Office can be avoided if – it is unlikely to make an impression, office has many distractions, office location is not comfortable to client, etc. In office, given the many distractions, other works, etc., the client may feel that he is not very important for you and you are not giving him full attention. For the first meeting given an option, choose a place which has a peaceful environment, less of distractions and there is no one to disturb you and your client. Meeting a conference room, either in your office or elsewhere, where you gadgets are absent shows you are courteous, focused on the client and committed to the meeting.

3. Pre-meeting preparation

   The preparation is where the half of the efforts is actually accomplished. Perhaps we should all spend much more time in preparation than for the estimated time of meeting itself. Remember that you are going to provide a solution to a problem, fulfill a need and hence you should be prepared with...

• Arranging the meeting: Coordinating and arranging the meeting is also a necessary part of preparation. We can start our correspondence pro-actively with the client and make an impression even before we hold the meeting. Before meeting, you can clarify the agenda, the participants, the expectations, the time available with client and so on. This is one way which you can show your organisation /professional approach in a mild way.

• Practicing the opening: Many advisors often practiced their introductions and opening lines depending on the situation and actually it is not a bad thing to do but we need to be flexible enough to change our lines.

• Packing the resources: Get the visiting cards, sales kit, presentations, case studies, calculators, etc. for the meeting. One can include the NJ Performance Report, Fundz Watch, E-Wealth Account presentation, KYC /MF application forms, etc. in the sales kit.

• Know the sales pitch: If you have an idea as to what solution you will or are required to pitch, then we must be very clear on those solutions. We should get the reports, forms needed thereof. And like the opening pitch, we can also practice our sales pitch and/or make a note of the key points which we need to ask and highlight.

• Last minute revision: Just before the meeting, say about 10 minutes, go through all the important notes /points you have prepared for the meeting including the agenda and the likely flow. Try to remember the full name /designation of the client and the pronunciation.

4. Arrive and start on time:

   Let us resolve and make it a habit to arrive for meeting and starting meetings on time. In many countries, people are so professional that even if you are couple of minutes late, the meeting is called off, no matter your reason for same. Even if you have arrived on time and the client is late to start, you should softly highlight that you were on time for the meeting. Again, this showcases your preparedness, professionalism and priority for the client. If for any reason, we will be late, even for few minutes, make it a point to inform the client about same. And if for any emergency, the meeting has to be postponed /cancelled, do inform earliest possible and apologise for the same. Most clients will give you a second opportunity. Remember that it is not only about your time, the client also set apart a specific time in their busy agenda to meet with you.

5. Making the first impression:

   The first impression is often made in the initial 10 seconds of meeting someone. And this impression then has to be overcome /changed with the remaining time that you have. Hence, it is most important the your first impressions count. There are a few things you need to do that will help you make this first impression very effective...

• Having a genuine greeting, proper handshake, confident body language and direct eye contact will showcase you as a confident person

• Maintaining a professional appearance (with proper formals - casuals on weekends may do, proper grooming, less of colours/jwellery /accessories, etc.) and demeanor sends a signals that you are serious, respectful to the client and focused on your job.

• Keep it genuine, simple and straight forward and do not try to do anything flamboyant or dramatic to make the first impression. There is no need for big words, phrases or colloquial terms to make an impression in the opening lines /introduction.

6. Progressing on right track:

   There are many important things that needs to be kept in mind while you are in meeting with the client.

• Turn off the distractions (mobile on silent, messenger /email off on laptop, etc.)

• Stick to the agenda and the client problems on hand

• Do not do into too much of details and technical stuff; all these can be managed later

• Appreciate the time constraints of the client and try to cover your important points and flow within the time

• Let the client speak without interrupting him/her but try to be in control

• Ask for any water /tea /refreshments that the client may need

• Listen very attentively and look for openings, needs, problems, etc.

• Ask the right questions which you need to

• Avoid repeating points already made

• Do not spend too much time on gossips or areas that are not your concern

• Keep making notes of the discussions and observations

7. Managing client's expectations:

   One most important part is about managing client expectations during the meeting. This is not easy but the following key points should be kept in mind for effectively handling these expectations.

   • Clarify what exact role you can play for the client and what you will not do/cover

   • Present proper solutions with possible outcomes, both positive and negative

   • Clarify things not in your control and which you may need to study further

   • Identify potential issues and problems that may arise

   Remember that the client may not truly expect a 100% easy solution to all this problems. And hence it is important that you remain genuine and to the point, not over or underestimating anything. The client will respect your opinion and will be also honest with you. Going forward, managing expectations, form a big role for all financial advisors and hence it is important that you start the relationship on the right note.

8. The closing of the meeting:

   Once the primary discussions are covered and there is not much time left, it is most important that you properly approach the closing of the meeting by doing the following things...

• Revising the decisions made and tasks identified during meeting along with deadlines for both you and the client

• Asking for any further clarifications needed and any points left to be discussed by the client

• Set the date and agenda for the next meeting, as felt required

• Thank the client for his/her time and the opportunity for meeting

• Even if the meeting may not seem to be be successful, always let the client know that you are available anytime if he/she needs.

• Accompany the client out of the conference hall /office /building. Ask if any arrangement is to be made for travel.

• Leave with a firm handshake and smile again and make them feel that their case is in right hands

9. Meeting Follow-up

   Post meeting activities are not to be ignored. Here are a few things that should be done after your meeting is over...

• Write an email or letter to the client summarising the minutes of the meeting with dates for tasks/decisions. Include the major points /cases for discussion and the main subjects/areas covered.

• Follow-up on the tasks and decisions for execution

• Keep the client up-to-date regarding any progress or issues you find along the way

10. Be Confident and Trust Yourself

    The most important thing you need to remember, not only for your first successful meeting with a client, but for any stage in your professional career and personal life, is to trust yourself. Confidence is something you need to practice; with practice you will get better.

    Remember, no matter who and where you are, you and only you are responsible for your future. It is your choice to prepare and practice even the small things in life. Slowly and steadily, these things will come naturally for you and you will grow /mature as a experienced professional. Till then, try to think of all these things as small challenges and remember to laugh out loud and say, “That was fun! Let’s do it again!

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