September 25, 2018

7 Ways for IFAs to Boost Your Income!

Sadique Neelgund

7 Ways for IFAs to Boost Your Income & Increase it Multifold!

SEBI has announced reductions in MF TERs and upfronts. This has led to negative discussions amongst financial advisors. I hear experts predicting an income loss of around 15 %. And newcomers questioning the viability of being a financial advisor.

I don’t wish to comment on the impact of this. We are yet to see how AMCs pass on these cuts to distributors.

The only thing I can say is… This is the new reality we need to embrace. Let’s figure out a solution.

Through this article, two points I wish to put across are – 

1) Financial Advisors can continue growing under new circumstances and 
2) The MF industry will grow irrespective of our decision to take part in it or not.

As financial advisors, you need to have conviction in the value you are creating. And showcase it to clients. At the same time, it’s your responsibility to convince her to pay for your service either through fees or commissions.

I have shared a few ideas which will help you grow your income by 3-4 times in the medium term even under these challenging times. I have compiled these ideas through my interactions and learnings with other successful financial advisors.

By the way, these ideas are for…

a) People who are ready to get out of comfort zone,
b) Have a positive mindset and
c) Challenge their current productivity levels. 

So if you don’t relate with it, I request you not to read further. But if you are ready to push yourself, let’s walk the journey…

1) Expand Your Product Basket 

Most IFAs deal with MFs & Life insurance. But, is it all what a client needs? Health / General Insurance, Loans, PMS, AIF, Bonds/Deposits, Real Estate, P2P, etc. can be part of your offerings. Instead of finding clients for your products, find the right products for your clients. MFs can remain your core offering based on its inherent merits, but make yourself a one-stop solution for all personal finance needs.

2) Start Charging Fees 

I believe that any family which has an income of ₹ 6 lakhs p.a. & above has the ability to pay at least ₹ 6,000 plus as advisory fees for advisors offering holistic advisory services. Our job is to convert that ‘ability to pay’ into ‘willingness to pay’ with the right value proposition and marketing skills. The journey from ‘ability’ to ‘willingness’ is long and difficult, but absolutely possible.

(I think under current conditions Hybrid Model i.e. fees + commissions is the way forward. It’s high time, RIAs and MFDs make a joint appeal to SEBI to allow hybrid models to exist and allow investor to make a choice whether she wants to pay financial advisor via fees OR commissions OR fees + commissions. Investors should have the right to demand complete transparency under such model and should be educated by regulator/industry.)  

3) Get Super Productive 

Most IFAs, I believe can do 2x to 5x more in same time simply by following time management and productivity enhancement tools, technologies & techniques. Simple methods like planning, focus and delegation can supercharge your productivity levels. And leverage on platforms, softwares and tech apps. When the output increases with same efforts/time, topline increases same resources.

4) Make The World Your Marketplace 

Break the mental barrier that you can get/serve clients only from your city. With today’s technology and communication, we are in a position to serve anyone who is willing to work with us from across India and world. Most of us get referrals from existing clients. Please tell them that you can serve clients anywhere in the world. Use low cost digital marketing to reach out to people beyond your city.

5) Implement 80-20 Principle 

In most practices, 20% of clients contribute to 80% of income. Focus on building up such client-base. Over the years… you should keep moving up the quality of your client-base. I am not saying discard existing or smaller clients… build team to take care of all other clients who do not meet your ARPC (Average Revenue per Client) criteria. Your time is your biggest resource, please put a value to it and respect it.

6) Aim For 100% Wallet Share 

Focus on 100 Good Families. Aim for 100% Wallet Share from each. And strive to earn a percentage of assets either through fees or commissions by delivering value which is greater than your earnings. See the magic unfold with this ONE formula (100*100). Clients may not give 100% of their investible surplus to you right away, but as relationship & trust builds over 3-5 years, they would prefer to do that.

7) Run Along With Industry 

When you run marathons or cross country races, there is popular strategy followed by runners. Simply match the steps of the person with whom you wish to finish.

MF industry is set to grow from 25 lakh crore currently to 95 lakh crore by 2025 as per forecast. That’s 3-4 times growth in 7 years. You just need to match your steps with industry to achieve similar growth of 3-4 times. And if your growth aspiration is higher, put extra efforts to take a little longer steps!

It takes 3-5 Years to setup any small business or practice. Financial Advisory practice is no different. The new comers to the industry will also have go through this grind before making any real income.

Our job is to creatively find solutions to the problems we face. And most of the times, we find solutions out of our comfort zone. You need not follow all 7 ways for growing your income, just a couple of them and you will still be doing very good. Decide which ones!

9 Thoughts to “7 Ways for IFAs to Boost Your Income!”

  1. Uttam Kumar Sen says:

    Need to focus on own strategy with changing scenario. Yes I agree.

  2. Abhishek Shukla says:

    Very well summed up Sadique Sir..Thanks for sharing these valuable inputs..Very Helpful to look the all the aspects of our business.

  3. Soumyajit Roy says:

    Excellent Sadique
    Very true


    Call of the hour is to approach SEBI for accepting Fees+Commission model, but “who and how” is still the biggest uncertainty

  5. ajay bhaskar says:

    very well explained . I have taken a step forward to start my own distribution business

  6. Gouri Shankar Mishra says:

    As you have mentioned earliet in this article that due to the introduction of all trail model & reduction in TER there will be overall 15% less income ? How far it is correct?. It appears to me that there will be substantial loss of income approx. 60% reduction.

  7. Candida Vishal Deshmukh says:

    Very good articles assisting and planning us how to cope and stay in business. Thanks

  8. R.K.Mishra says:

    Thanks, Really Good and helpful.

  9. Rekha Bhutada says:

    It boost our confidence level.You are true.
    Rekha Bhutada ARN 11237

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