Mr. Abhishek Dubey, Head - Strategic Business Development Unit
Becoming a very successful financial products distributor is easier said than done. One has to master many aspects of business and customer service. Given current market conditions and the changing landscape, distributors need to move beyond the routine, traditional practices and adopt high impact activities. One such activity is the portfolio review of customers. Often underrated, we believe incorporating portfolio reviews at the core of your business practice can be a turning point for your business.
At NJ we realise the importance of portfolio views for your business and hence have developed tools that empower you to conduct these activities with great ease. We have eliminated the need for you to prepare reports and insights for a customer and have presented reports which can be directly presented to your customers. Not only do you save enormous time and efforts, but you also get actionable insights that can be easily translated into recommendations at your end. We have recently also launched the tool for evaluating even the Non-NJ Mutual Fund portfolio of customers, which we will talk about in brief in this article.
Access: You can access the “Portfolio Review Utility” under Client Services from your Partner Desk.
There are two types of reports available here:
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NJ Portfolio: This is the primary tool for evaluating the entire portfolio of your existing customers spread across multiple products which are as recorded and available in the NJ Client Desk. Any portfolio outside NJ is not covered in this tool.
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Non-NJ Portfolio: This is the primary tool for evaluating the entire “mutual funds” portfolio of your customer or any prospect/lead spread across all distributors, including NJ. Any holding beyond mutual funds is not covered in this tool.
We will now briefly highlight the key advantages which Portfolio Review activity can help you do...
EXISTING CUSTOMERS:
As a distributor you have one very clear objective – manage the customer's portfolio with you as per his needs /financial objectives. The other objective, often not given due credit, is to have a clear picture of the customer's entire portfolio and accordingly advice the customer.
Risks of not doing regular Portfolio Reviews:
Before we talk about the benefits, let us first briefly identify the risks of not doing regular portfolio reviews with existing customers.
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the portfolio losing track of the financial objectives /expectations of the customer
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portfolio slipping on performance and quality
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loss of opportunity to deepen relationship (cross-sell /up-sell /wallet share)
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losing control of customers as they act as per their own wishes
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eroding of the assets base over time
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threat from other distributors /competition, either already servicing customer or futuristic
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the customer loses value in your association
Benefits and Possible Outcomes:
The following are the benefits one can have in brief when you do portfolio reviews with your existing customers...
With NJ Portfolio Review:
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Get the right information and actionable insights of the customers at one place in ready format
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Easy to do regular update to the portfolio to match customer's objectives/situation
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Maintaining a good relationship with customers and occupying their mind-share
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Controlling customer's investment behaviour and actions
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Finding opportunities to deepen the relationship, cross-sell and up-sell and increase your share of the wallet
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Opportunity to project the real value of your association and also the professional image of your organisation
With Non-NJ Portfolio Review (only MF):
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Finding if the customer also has MF portfolio outside NJ /your association. You will realise the true depth of your relationship!
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Valuable customer insights – total portfolio size and performance, asset allocation, distributor spread, etc
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Opportunity to share valuable insights to customers which they would not have earlier received
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Unearthing portfolio /old investments which the customer may have been forgotten
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Opportunity to consolidate MF portfolio under you, either immediately or gradually
POTENTIAL CUSTOMERS:
Customer acquisition is what keeps your business growing. Given a choice, every distributor would desire to acquire customers who already have a ready portfolio of investments with them. It is simply good for business. But these clients are not easy to net and one should have a very strong value proposition to make the customer interested in associating with you. Cold calls without anything on hand is not enough to make an impression. Non-NJ Portfolio Review can be an amazing tool to make that lasting first impression.
Benefits and Possible Outcomes:
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Proper clarity and understanding of the customer portfolio, investment behaviour, associations
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Meaningful, rich and content-driven, focussed discussion
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Present valuable insights like portfolio performance, asset allocation, distributor spread, etc which the customer may have never experienced
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Finding old investments which the customer may have been forgotten
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Opportunity to present a clear-cut road map /recommendations
Clearly, meeting with any prospect with proper preparation, ready insights and an investment roadmap will surprise/delight the prospect. The experience of other Partners who have shared such insights has been great. Often customers are even surprised to even know their consolidated portfolio returns! Needless to say, the exercise will help you create a very distinct, professional, no-nonsense impression on the prospect. Chances are, you will surely land up a second meeting!
Incorporating Portfolio Reviews in your Practice:
If you have a large existing customer base, you should start by dividing customers into different categories/segments like Diamond /Platinum /Gold /Silver /Aluminium, etc. This can be done on basis of portfolio size or your assessment of the customer's future potential. These categories can be every easily saved as 'Tags' in the NJ CRM system for easy reference /usage. Once these are decided, decide a fixed frequency of Portfolio Reviews – ranging from say six months to a maximum year for every customer. This has to be religiously followed in the system. NJ CRM modules will make it very easy for you to record and track the client level meetings.
Henceforth, before every review (or even client meeting), make it compulsory to have a Portfolio Review report ready. Study the report and chalk out clear cut recommendations /action plan. You may even incorporate these points in the report print-out as well.
Non-NJ Portfolio: It may be possible for your existing customers having a portfolio outside of NJ. At least for your big customers, try and get the CAS for the Non-NJ Portfolio Review utility which should not be very difficult. If you find any MF portfolio outside of NJ, please also get the Non-NJ Portfolio Review report for discussions along with insights and recommendations with the customer. Even for potential customers, we would like you to request the report in advance for the meeting. This should be much easier than asking the customer to directly share the entire portfolio details with you, which rarely happens.
During the meeting, we strongly recommend to 'not push' the customer to consolidate the portfolio same with you or share any unwarranted comments /negative reviews with other distributors he may be having relationship with. It would be best to only share insights and recommendations on the portfolio and let the customer decide the rest.
Best practices:
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Ensure you have the right data set and share the disclaimers to be on the safer side. Communicate that it is only limited to email ids shared and limited to mutual fund product.
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Take a proper printout of the report and put it in a proper folder to be left with the customer. A colour print out is preferred. Combine this with any organisation brochure you may have. Avoid product focussed marketing materials at this meeting.
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Note down the meeting minutes and identify clear cut actionable during the meeting. You may store these as Tasks in NJ CRM.
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Set up a follow-up meeting, if required, to review the progress and take discussions further, especially for prospective customers.
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Avoid using the utility to generate the report live in the presence of the customer. He should believe that you have spent considerable time and efforts in preparing the reports /insights.
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Find the name of the other distributors (using ARN Code on AMFI Website – Distributor Corner – Locate an MF Distributor) before the meeting.
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Be confident of the recommendations
Using Portfolio Reviews:
I will be not getting into the details/operational elements of how to use both tools. We already have had detailed and very helpful Digitalk sessions on the same which we strongly recommend that you should refer to.
Partner Desk – E-Saathi – Webinar – Digitalks – NJ Tools
Just to refresh, here are the key points for the right usage of the Non-NJ Portfolio Review...
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Use CAMS/ Karvy links to download the CAS.
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Get the “Detailed” Report with the start date as 1st January 1991.
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Ensure you have the right 'email ID' as only matching investments will be shared. Data mapped to old /multiple email IDs will need to be generated separately.
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An additional field of PAN can be used to limit the report to a single investor only.
Reading the Reports:
This is a big topic and deserves a separate, detailed article. However, for the sake of brevity, here are the key points you can highlight
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Overall Portfolio Returns
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Number of Schemes
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Quartile Ranking of Schemes (for quality)
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Concentration Risk – AMC /Scheme exposure
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Asset Allocation
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Investment Behaviour/pattern
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Distributor + direct plans spread /exposure
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Recommendations /Action Plan
Conclusion:
Successful distributors know that a strong customer base is the most valuable strategic asset they have and that every opportunity to meet a new customer is to be treated as a one-time challenge, to be exploited with proper preparation. The portfolio review activity seamlessly fits the bill for both of these activities. It is a very effective strategy to sustain and grow your business while deepening your relationships with clients. It lies at the heart of a customer-focused organisation. Needless to say, distributors focussed on having this approach to managing assets and customers, are more successful.