Early days
When you enter Nimish Unadkat’s cabin the first thing you notice is his large computer screen flickering tiny red and blue tabs of stocks on his terminal. This reflects his passion for markets which developed during his teenage days.
During his school days, Nimish spent time reading annual reports of companies after finishing his homework while his friends played cricket. He would ask his uncle, who used to be an avid stock investor, to explain to him annual report jargon.
His love for numbers led him to enroll for a degree in Commerce at Mumbai’s R.A Podar College of Commerce and Economics. Aspiring to become a chartered account, he simultaneously pursued CA along with graduation. He earned his CA degree at the age of 19 and waited for two years to attain the legal age of 21 for Certificate of Practice.
After a few years of articleship he started his practice by joining the same firm as Partner, adding a good number of clients. In 1994, Nimish decided to give up his license due to his growing discontent with the chai paani culture entrenched in government organizations which often delayed his work.
Foray in markets
He started his second innings in equity markets for which he had immense fascination since his school days. Along with two friends, Nimish took a membership with NSE. They built a robust equity broking business until the Ketan Parekh scam surfaced. In the meanwhile they also became depository participant of NSDL. While they managed to retain investors in the aftermath of this scam, the regulatory tightening and increased compliance which followed meant they spent majority of time doing paper work, leaving little time for business development.
Nimish began to introspect and realized that most traders seldom made money due to their short-term calls. This made him research on solutions which would serve the long-term goals of clients. Sharing his rationale behind venturing into MF advisory, Nimish says, “There are two ways to make money in stocks. Either devote your full day into research or be privy to certain inside information about companies. The reality is that most investors buy stocks based on the recommendation of their friends/colleagues without doing any research. I observed that those who traded in markets seldom made money until they had a long-term horizon. I saw potential in mutual funds due to their long-term approach and professional management.”
At 40, he ventured into wealth management. His entry into wealth advisory was smooth as he had a legacy of clients from his earlier businesses. In fact, his clients acted as his mentor in his new initiative.
Clientele
Having the credentials of CA gives him an edge as he looks after his client’s entire goals – taxation to investments, property management and estate planning and management. Catering to a select 20 high net worth families allows his five-member team to offer a comprehensive suite of services. His clients mainly look for capital preservation and enhancement of wealth through mutual funds. Besides looking after his business, he is also a legal adviser to a family office which caters to ultra-high net worth clients.
Fund selection
He applies his number crunching skills in picking the consistent performers. Nimish spends a few hours every day to capture the performance of equity funds over a five-year period, including the performance of one-year returns. Presenting this data to clients helps him show the consistency of returns and the extent of fourth-year’s return contributing to the entire five-year performance. He takes care to apprise investors about the dangers of investing by looking at past returns. Making customised reports for discerning ultra-high net worth clients and differentiated Research through use of technology has been his forte.
To further enhance his customized client reports, he has started using Morningstar Advisor Workstation (AWS) which helps him capture fund’s modified duration, YTM, expense ratio, scheme size, sector exposure, various portfolio ratio data at the click of a button. “AWS helps me construct a better portfolio by doing incisive analysis on sector exposure and the asset quality,” says Nimish. Another AWS feature which he uses extensively is hypothetical. This feature allows him to make what if analysis and also to compare returns of ULIPs, stocks, FDs and MFs over a given period which helps him make a case for mutual funds.
While selecting funds, he draws comfort from the AMC brand and performance track record, sticking mainly to the top fund houses by assets. That doesn’t mean he never recommend funds of emerging fund houses. He has been actively recommending funds of a few mid-sized AMCs which offer differentiated solutions.
Client first
Acting in client interest is his firm’s principle which has kept him away from canvassing NFOs and closed end funds since the very beginning. His revenues are tied to his client wealth as he has moved to an all trail model.
Constant learner
He earned CFP certification to learn the nuances of wealth advisory. While Nimish has given up his CA license, he keeps himself abreast about the latest tax rules by attending knowledge sharing meets with practicing CAs. In fact, he is often consulted by his fellow advisers on tax matters.
He foresees a great demand for estate planning services in India which made him earn Chartered Trust and Estate Planner (CTEP) certification offered by American Academy of Financial Management India.
The way ahead
While Nimish currently caters to a limited clientele he is open to building scale. For this, he is strengthening the firm’s infrastructure by digitizing operations. For instance, his database is now stored on cloud and he is exploring mobile apps which can facilitate swift transactions on the go. Through his cloud based software and App, he helps clients make inventory of all their assets to get a 360 degree perspective to make right asset allocation. In fact, he has been an early adopter of NSE’s MF distribution platform.
His firm today manages assets worth Rs 225 crore in mutual funds.
How he caught our eye: Caters to a select 20 ultra-high net worth families advising Rs 225 crore assets in mutual funds.
Favorite book: The Road Ahead by Bill Gates, Nathan Myhrvold and Peter Rinearson.