SIPs are powerful. You should try to sell as much as possible. As a beginner, try to sell atleast 1 SIP every day, 30 SIPs every month, and 300 SIPs every year. If you sell Rs.30,000/- SIP every month (Rs.1,000/- per Day), you can build an AUM of around Rs.30 crores in 10 years. If you sell Rs.Rs.1,00,000/- SIP every month, you can build an AUM of Rs.100 crores in 10 years. All SIPs won’t run for 10 years. So, for every closed SIP you must sell 1 more SIP to compensate for it.

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The rule is to reduce risk while targeting higher returns. You should focus more on large cap and multicap funds. Typically, I would suggest to sell 60-70% large cap and multicap funds, 20-30% mid cap funds and 5-10% small cap funds. Yes, mid cap and small cap funds could give better returns in long term but they are more volatile in short term. While your client may invest thinking long term but during market down turn they panic, lose confidence and exit. This is bad for client and your business. So, keeping in mind the behavior of the client, you should focus more on large cap and multicap funds.

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Cut down your meetings (other than clients). Hire employees to assist you. Don’t do multitasking. Complete an assignment and then move to another. Prioritize your work.

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If a scheme is continuously under-performing the benchmark index and comparative schemes (year on year) for 3 years, you should consider exiting the scheme. Don’t decide on the basis 1 year returns. Also, don’t decide on the basis of negative returns. When equity markets are down, most schemes would give negative returns. In such case, do peer group comparison.

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SIPs work in all funds. It will also work in a sector fund if clients continue SIPs even in bad times. However, risks are more in sector funds and clients may panic and stop their SIPs in between. Therefore, you may avoid such funds. Focus on large caps, multicap and mid caps. Even if you must give sector funds, keep it limited to 5-10% of the total allocation.

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Yes. Top-up SIP is a very good process. It helps the client increase savings automatically and helps IFA increase SIP book and AUM. Under Top-Up SIP, the client gives standing instructions to increase his/her SIP by a fixed amount/percentage every year.

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Focus on mutual funds. Spend 70% of your time in selling mutual funds. Sell SIPs. Meet 2 clients (existing or new) every day and discuss mutual funds with them. Read 1 hour every day. If you do these things, you will certainly become top IFA.

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Initially, SIP Book target should be 2% of your AUM. So, if your AUM is 5 crores, SIP book should be around 10 Lacs. As your AUM grows, you should at least have 1% of SIP per month of your total AUM. If you follow this, you will become a top IFA. Watch my video here.

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You should do at least 2 client meetings each day, 10 meetings each week, 40 meetings every month and 500 meetings every year. This includes existing clients, new clients and even multiple meetings with same clients. Meeting will be qualified only if you spend 30 minutes or more with the client. Watch my video here.

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There is no fixed rule for this. However, it may be better to ignore sector funds or have very little exposure. While they may offer higher returns if your bet goes right, the risks are far higher. Entering a sector fund is easy. Exiting at the right time is tough. You should focus on Large caps, Multicaps and Midcap funds.

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At any point of time you should focus on just 5-6 AMCs. If you wish to add another AMC, you should consider removing one. It will be easier for you to manage your business by focusing on few AMCs. Due to practical reasons, you may have exposure in 8-10 AMCs at any point of time because, when you stop selling certain AMCs and select another AMCs, all your AUM in the earlier AMC may not be switched to newer ones. Don’t worry about it. Active AMCs in your selling list should not be more than 5-6. That’s enough.

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The following sequential parameters should be used to select AMCs.

(1) Brand of the AMC

(2) Overall AUM managed by the AMC

(3) Consistent performance of the AMC

(4) Relationship with the AMC

(5) Service standard of the AMC.

Don’t just choose on the basis of performance. Performance rotates. Focus on long term consistent performance.

Watch my small video on ‘How to Select AMCs’ here.

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