Busy MFD vs Smart MFD

Zebras and ostriches often live together to protect each other from predators.

The ostrich can see much better than the zebra, while the zebra can hear or smell danger better than the ostrich.

Definitely a big lesson to learn from their partnership for all MFDs.

We too can and must shift our mindset and move ahead from thinking about competition to Collaboration.

Majority of the MFDs try to wear all hats and ultimately end up doing average in everything.
Its like Jack of All Trades, Master of None.

I have done some talks/seminars on this subject in Bangalore and many MFDs have implemented the ideas shared and grown immensely.
Do read till the end, I am sure some points may surely touch your wavelength, and you can implement to scale up your business.

1. BUILD COMPLETEMENTARY PARTNERSHIPs :  
 Identify couple of MFDs who have strengths different from yours.
For example, you may be good in sales but no in research. Collaborate with an MFD who is good in research. Likewise, be it Service, social media…wherever you are not very good, build a team and partnership.
Define roles clearly with clear cut defined responsibilities.

Start with a simple WhatsApp Group and gradually scale it up with regular meetings offline/online as per your convenience.

2. POOL COSTS AND UPGRADE QUALITY:

Research tools are many and each one is better than the other. You can take 1 research tool and your other MFD friend can take another.
Both of you can then maybe share the login credentials and help each other. Now with lesser cost, you have 2 or maybe even 3 Research Tools.
This helps you improve your quality of research and save lots of money too.

3. JOINT IAPs. 
Investors Awareness Programmes are a must to attract new clients.
Doing in a good star hotel with a good, reputed trainer costs a lot of money.
Collaborating with couple of MFDs can help you share costs at reasonable level and the saved cost can help you get a good quality speaker who can mesmerize the audience.
Moreover a professional speaker can attract quality audience.

4, FOCUS ON SPECIALISATION : 
Each MFD has inherent strength.

Some are good in Retirement, some are good in Alternates and some are good in Direct Equity.
Taking help of your closed group MFD be it related to NRI, taxation, Gift City will take your repuatation as not only a Specialist but as a All round Superstar MFD in the eyes of your investors.

Identify your strengths… focus on that.
Identify your weakness…… collaborate on that subject with another MFD.

4. REFERRAL SYSTEM: 
Yes. Even a referral system amongst yourself is possible and must be explored.
Handling all types of client segments becomes a pain once the business grows.
We all know that every client is not meant for us. Handling every segment can lead to not only poor advise, poor service but also weaken relationships.
You can have a defined referral rules regarding Revenue Sharing (If needed), Transparency.

When it comes to Referral System, always focus on Long Term Trust and don’t get distracted by Short Term Commissions.

5. COMPLIANCE SUPPORT:
The Compliance part can play an havoc if not handled as per regulations.
Every month some new rules keep coming and keepting track of them can be a pain in the neck.
As a Group, you can hire one expert to handle all Audit and compliance work.

The helps in not only helping you get a good quality Professional (as cost is shared) but also you also save lots of time with regard to filings.
The time saved helps in focussing on business and an expert professional can also help you set up a uniform process for everything helping your business look like a large scale professional financial institution.

6. EMOTIONAL SUPPORT AND LONGEVITY:
MFD business looks glamourous on outside but its definitely not easy.
Market Volatility, Client leaving midway, Rejections, Compliance issues….. all of these take a heavy toll not only on the business but also on mental health.
A Good close circle of 3-5 MFDs will help you open up on
a) Handling Tough Clients
b) Business Challenges
c) Handling Market fears

   This helps reduce stress, burnouts and improves clarity.
Moreover a long fruitful partnership a group of MFDs can help in longevity of business as maybe you all can merge and create 1 Big Company, maybe even going for a public issues in future.

Remember what Ratan Tata Sir said
“If you want to walk fast, walk alone.
If you want to walk far… walk with friends”

All the very best,
Have a great new financial year
Srikanth Matrubai
AMFI Registered MFD. ARN-51423 ,Bangalore