About Saurabh Mittal
An avid biker, Saurabh loves riding his bullet anywhere he has to travel.
Cash flow management being his forte, he advises business clients’ on prudently managing their cash flows, books of accounts and business life cycle management. He oversees compliance, investment management and research activities at Circle Wealth Advisors.
Saurabh practices asset allocation with a greater degree of professionalism than most others. As a result his clients reach their goals more smoothly. The idea of goal planning and paving a relatively smoother journey is the essence of investment planning and Saurabh has mastered this concoction of science and art.
A commerce graduate from K.C. College, he is a CFP (Certified Financial Planner) & an Associate of Insurance Institue of India.
Saurabh lives with his wife, 2 sons and loving mother. He can be reached on email@example.com.
In a free wheeling discussion with Saurabh let us unearth some invaluable insights.
1) Kindly tell us about yourself?
17 years ago, founders of Circle Wealth Advisors Pvt. Ltd. began their careers with focus on selling insurance policies. With the rise in acceptance for different financial products, we strategically started charging fees to our clients. The transition was a big milestone and we had to move from a client base of 700 clients to only 17 clients. Due to this move, we graduated from a financial products distribution company to a Wealth Management company in our client’s view.
We are now Personal – Chief Financial Officers in our client’s lives. It’s not just a transactional relationship anymore, it’s deeply personal where the client’s open up about their tiniest details about their life. Our discussions often range from financial plans, returns on investments to which is a better school for children.
2) What is your secret to success?
The secret to our success has always been happy clients. We are obsessive about being client centric. We constantly look for innovative ways to improve our client experience.
Internally the resolve to stick to our belief system and not deviating from our investment process or getting into products, which do not fit client profile, has made a huge difference.
3) How should the IFA handle challenges that he is facing today?
Ideally, an IFA should be very positive for about India’s growth story for many decades to come. This will help him/her to wake up each day with renewed passion and handle whatever obstacles that might come in the way.
It’s always better to look into future and lay brick at a time.
4) What is your investment philosophy?
Our investment philosophy is actually very simple. It’s to Buy Low and Sell High. Although it’s easier said than done. To execute this, we have created a completely quant based Dynamic P/E Asset Allocation Strategy which looks at the equity market and tells us whether the market is expensive or not. The trick is not in creating a strategy but believing in it completely, setting the right client expectations and then ruthlessly sticking to the system.
5) What are the qualities an advisor should have to delight his clients?
An advisor must have a combination of 4 qualities such as Knowledge, Integrity, Execution and Attitude. We believe this is true for any service industry. If you look at how would you choose any service provider for yourself, these qualities matter a lot. Take for example of a car mechanic, you would want that he has the right knowledge to detect the problem, deals with integrity without creating unnecessary requirements. Is great in execution and delivers the car on time, and lastly has the right attitude to empathise with your situation and communicates accordingly. If you find these qualities, probably you would not worry too much about price.
6) What is your view about goal based planning?
Goals are dreams and aspirations of investors that an advisor brings to reality by planning and executing. Goals are the only guiding post for choosing correct investment. In fact by definition investment is delay of consumption, if we are not aware how this money will be consumed, it becomes impossible to decide an investment strategy. The only reason most investors are unable to reach their goals is due to their own inability to stick to their savings – investment discipline. An advisor must manage his / her client’s goals and make the journey very peaceful.
7) How does one manage market volatility?
Volatility can be managed by sticking to the investment strategy. It’s the need to outperform a bull market that creates a deviation from a strong back tested strategy. An advisor must objectively look at the equity market rather than trying to time it.
In our case, Dynamic P/E Asset Allocation strategy has worked good for us. We have been able to cancel out noise of the equity market.
8) What is your view on debt mutual funds?
Debt Mutual Funds is a unique offering for Asset Allocation purposes. However, an advisor should not view it as an alternate to a Bank Fixed Deposit or Recurring Deposit. These are vastly different financial products.
Debt Mutual Funds are interest rate sensitive, so they are volatile too. However, there is tax benefit to it which makes it more lucrative but it shouldn’t be the only reason to keep it in a client’s portfolio.
9) How should one select clients?
Our business of financial advisory is an absolutely relationship based business. We look to build our relationship for decades together. Our target segment is well defined we work with families having an annual income between 50 lakhs and 3 crores.
Hence, an advisor must select clients with whom he/she can work together for a long period of time. There is no rule of thumb for client selection.
10) What should be the mix of HNI and retail client
There is no ideal mix between HNI and Retail client. It depends on an advisor where he/she can offer his service in the best way possible. It’s actually counter productive to deal with all segments of clients. It really pays to have a focused client segment.
11)You are a keen practitioner of asset allocation. Can you share some key insights about asset allocation?
First step is to distinguish between strategic asset allocation and tactical asset allocation. Strategic allocation is derived from the profile of the investor and is completely based on client situation. Strategic allocation may be different for different client and has nothing to do with current market conditions.
Tactical allocation on the other hand is the tool to generate alpha, and has nothing to do with client situation and is completely based on market condition.
It’s very important to follow strategic allocation, where we add the first level of value to our clients. Client already has allocation to different assets; it’s just that the allocation is derived not from a strategy but on an adhoc basis. Challenges of strategic allocation are to derive at the right mix based on the client situation.
Once the allocation is derived it requires hard-core process to stick to the allocation and rebalance as per the need. For tactical allocation first challenge is to create a strategy with proper back testing and second is the execution capabilities.
Having said that the biggest challenge is to have a strong belief system and huge commitment to stick to the strategy.