Father-son duo from Gorakhpur are striking it big in mutual funds

By Morningstar |  17-04-19 | 

Ashish Kumar Agarwal joined his father’s share broking business full time after his graduation in 2000. To learn the ropes of the business, Ashish started visiting office from his college days. Founded in 1988 by his father Shree Satya Narayan Agarwal, the firm manages close to Rs 150 crore in direct equity, which has been its core focus since inception.

Ashish made some significant changes in transforming the business, particularly in digitalizing and streamlining processes, which paved the way for its stellar growth. Though his firm operates from Gorakphur, Uttar Pradesh, it has clients across India and abroad which is supported by a ten-member team. Their experience in equity markets spanning three decades has helped them earn client goodwill and loyalty.

While their firm has been dealing in direct equity and portfolio management schemes, they had not ventured into mutual fund advisory until five years back. Ashish noticed that some of his clients were investing in mutual funds through other advisers. After studying mutual funds and its potential for both clients and the business, he decided to fill this gap in 2015.

To grow his business, he began to network with peers and started attending industry conferences to learn about mutual fund advisory. “I attended an adviser conference in Mumbai where Gajendra Kothari of Etica Wealth Management was addressing a group of IFAs. He was speaking about how technology can help advisers transform their business. He spoke about how executing transactions through exchange platforms can help advisers scale up their business and expand geographically. Through a show of hand, Gajendra asked how many advisers in the group were executing transactions through platforms like NSE, BSE and MFU. Only me and another IFA among the group were not using any platform. I enrolled with BSE StAR MF the very next day,” recalls Ashish. Since then there has been no looking back.

Going from physical to digital has helped him cut down on paperwork, increase volume and revenues. So far, Ashish has built mutual fund assets worth Rs 56 crore with SIP book of Rs 73 lakh. Convinced about automation and technology’s benefits, Ashish started scouting for a research software which could help him cut down his time on research. He came across Morningstar Advisor Workstation and started using it since December 2018 to enhance his research capabilities. Ashish started using the portfolio X Ray, Hypothetical, common holdings and other features of Advisor Workstation to research on clients existing holdings in direct equity and mutual funds to construct sound portfolios. After finding out the common holdings, he pruned the holdings which had overexposure and added funds to fill the gaps.  “Using Morningstar Advisor Workstation has helped me structure better portfolios for clients. It has enhanced my research capabilities. Also, clients are impressed after seeing the depth of reports. This helps me differentiate from other advisers. AWS is like plant & machinery in a business which helps run my company,” says Ashish.

Ashish had another breakthrough recently by using AWS. He closed a deal worth Rs 6 crore by culling out research reports using AWS. “I got an ultra HNI prospect through referral who wanted to invest his business surplus in credit risk funds. The client was also approached by a bank which offered him two funds. I prepared a presentation using AWS and presented my reasoning for the funds I was recommending. Also, I apprised him that I could offer a host of products from different AMCs unlike the bank which could be biased in promoting the sponsor’s fund. The client was impressed with the depth of the research and invested Rs 6 crore in two credit risk funds,” explains Ashish.  He says that many deals are underway and expect to close them post-election.

Another trend Ashish has observed that many companies and high net worth individuals are wanting to invest in direct plans and are looking for advice. To tap this segment, he is mulling to apply for Registered Investment Adviser License. This could open up a new source of fee revenue for Ashish and help him increase his assets under advisory.

Ashish says his father’s principles have helped him succeed in business. “My father has taught me to never speculate with client money and be transparent in client communication. He says we should study the products well and sell only those products which meets the goals of clients. Lastly, his belief is that we should not take short cuts to get business,” says Ashish. Ashish has recommended many of his prospects to pay off their debt before starting any investments, even if it meant losing business.

Ashish believes that his future growth will be driven by adopting technology and building infrastructure in all aspects of business – back office, operations and research.

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Apr 18 2019 04:34 PM
good/advise approach to begginers
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