Early days
Hemant Rustagi grew up in Gurgaon and completed his post-graduation in commerce from Delhi. He landed his first job at UTI MF which brought him to Mumbai. From launching new funds to designing operational guidelines for branch offices, he acquired a wide range of experience in his different roles at UTI MF.
After growing up in ranks at UTI, Hemant was roped in by private sector MFs to set up their operations. He was among the founding employees at Credit Capital AMC (now Taurus), Jardine Fleming (later JP Morgan) and ING MF (now acquired by Aditya Birla Sun Life MF). During his stint in the MF industry, Hemant was actively involved in AMFI committee’s like registration of MF distributors and research.
Entrepreneurial bug
After spending 16 years on the asset management side, he sensed a huge opportunity in advisory. “I could see that people would start moving from physical to financial assets. I knew that while the shift will take time it will eventually happen,” recalls Hemant.
In 2004, during the onset of bull run, he struck out on his own by setting up Wiseinvest Advisors with a team of four. His vision turned true. Since 2004, the industry’s asset base has grown from Rs 1.45 lakh crore to Rs 21 lakh crore now. Riding this wave, his firm’s MF assets under advisory too has grown to Rs 900 crore. Besides MFs, his firm does not deal in any other product. The AMC awards decked across his office are testimony to his sole focus on MFs. “We believe that MFs provide the best in terms of variety, liquidity, flexibility, professional fund management and tax efficiency. That’s why, it is possible to design a portfolio for a lay investor as well as a sophisticated one with MFs alone,” proclaims his website.
Stumbling blocks
But his journey hasn’t been smooth. Just as his firm was gaining traction, the global financial crisis jolted the markets. Retaining and getting new clients became tough. Then SEBI prescribed the bitter pill – entry load ban. While many IFAs called it quits as they couldn’t withstand its side effects, Hemant didn’t lose focus. His 16 years’ experience in the MF industry taught him that these were just cyclical roadblocks and he would benefit when the tide turns.
His perseverance paid off. Today, he has more than 10,000 clients managed by a staff of 50 across his two offices in Mumbai. Hemant says that it is necessary to face adversities as it helps us evolve and grow stronger. He considers himself lucky to have faced these headwinds early in his entrepreneurial journey.
Recounting his early days, Hemant says that like most advisers, he reached out to his acquaintances and friends, who formed his initial client base. Also, his articles in media helped him establish trust with prospects. Hemant has been extolling the virtues of mutual funds in newspapers since 2004. Marathi daily Loksatta, where he has been a regular contributor, approached him for conducting investor meets in Mumbai. The event held in Dadar drew an audience of 1,400 while the one in Thane was attended by 900 people. These events coupled with his articles helped him acquire many clients. Since Hemant regularly writes for media, he thought of bringing out his own publication. He launched this four-pager print publication called Wealth Wise, which reviews funds, comments on markets and features topical personal finance articles. This newsletter is published in two languages for 11 years now, reaching out to 40,000 people.
The right advice
Hemant attributes his success to his ‘client first’ philosophy. For instance, he claims that he has recommend only five NFOs in his advisory career so far. “I’m not saying that AMCs should not come out with NFOs but they should have a meaningful differentiation. Whenever NFOs came, we allowed them to build track record and then we started advising such funds. We stayed away from funds which were trying to take advantage of market situation.”
Likewise, he stayed away from the closed end fund fad. “There was a time when the media wrote about how NFOs were being peddled for the lure of commissions. Our clients read these articles and they appreciated the fact that such NFOs didn’t feature in their portfolios,” points out Hemant. His firm follows a structured and scientific approach to shortlisting funds for clients. A committee comprising four team members (2 senior RMS, 1 Vice President and him) decide on a quarterly basis which funds should be recommended to clients. The two senior RMs change by rotation every year.
Another misconception spread by advisers those days, according to Hemant, was the concept of NFO NAVs of Rs 10 as cheap. Through his articles, he has been dispelling such fallacies right from his early days. “Slowly, people realized that quality of advice mattered more than anything else,” observes Hemant. Cut to today, Hemant sees that investors have become mature. They have started asking questions to their advisers. He feels this is a good sign. “Earlier, investors relied on their advisers unquestioningly. Now, they are curious. They are asking questions which is keeping advisers and RMs on their toes. This is helping RMs increase their knowledge,” observes Hemant.
Hemant says that convincing conservative clients about the power of equities has been tough. He has made such clients comfortable with equities by gradually moving them up the risk scale from FMPs, hybrid funds to equity funds. Hemant says that equity funds were like seasonal products, clients entered when markets scaled high and exited during downturn. When people burnt their fingers, Hemant asked his clients to invest in equities only if their time horizon was five years or more.
Pillars of success
Quality advice is not the only ingredient for excellence. Hemant has built a strong back office support by developing an in-house CRM which takes care of operations diligently. Along with right advice and customer support, regular client feedback and updating them on important developments has helped his firm become a trusted name among investors. Whenever his RMs meet any prospect/client, they take client feedback post the meeting which captures client concerns and suggestions. Also, his annual client survey helps his firm take into account client feedback and work towards implementing these ideas.
Road ahead
While firm has seen massive growth since the last 13 years, having reached Rs 900 crore MF AUA, Hemant has no fixed AUA target for his firm. This culture reflects across his firm. His RMs too do not have any sales targets. “If we do the right things, there is no reason why we won’t get clients and keep growing. You need to be passionate about what you do. If you are not passionate your clients can perceive it,” believes Hemant.
Going ahead, Hemant says that going digital will help his firm achieve further operational excellence. His office has started routing client transactions through stock exchange platforms. However, he firmly believes that there is no substitute for human advice. “While technology will be an enabler, handling clients emotionally will continue to play a pivotal role in this business,” asserts Hemant.
How he caught our eye: A SEBI RIA, built Rs 900 crore MF AUA in 13 years. Has appeared in 800 personal finance shows on news channels and written more than 700 articles in major print publications.
Favorite book: The Da Vinci Code by Dan Brown.
